{"id":5058,"date":"2015-12-06T11:05:38","date_gmt":"2015-12-06T15:05:38","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=5058"},"modified":"2015-12-06T11:05:38","modified_gmt":"2015-12-06T15:05:38","slug":"smart-ways-to-give-to-charity","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=5058","title":{"rendered":"Smart Ways to Give to Charity"},"content":{"rendered":"
\"next-ave\"<\/a>\u00a0\u2018Tis the season of \u201cThe Ask.\u201d<\/header>\n
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There\u2019s nothing subtle about the appeals landing daily in our inboxes and mailboxes: \u201cPlease send your generous contribution today.\u201d \u201cEvery gift counts.\u201d \u201cWe\u2019re counting on you to renew your support.\u201d \u201cYou make a difference in the lives of\u2026.\u201d<\/em><\/p>\n

They make me, and probably you, feel rather needed and valued. If you don\u2019t feel the tug \u2014 and, let\u2019s be honest, the pressure to send a monetary\u00a0donation in the next few weeks \u2014 you really are a tough cookie.<\/p>\n

Here are five ways I suggest to give wisely this year:<\/p>\n

1. Change your mindset about giving.<\/strong> No matter how much you\u2019ll donate, think of yourself as a philanthropist<\/a>, which connotes someone who takes a longer-term view and commitment. I do.<\/p>\n

MORE:\u00a0<\/span>Boomers In Retirement: The Greatest Giving Generation?<\/span><\/a><\/p>\n

While I\u2019m certainly no Melinda Gates<\/a>, I\u2019ve reframed my role in giving, using her as my inspiration. Before I send my contribution, I visualize my role as a philanthropist, reminding myself that my gift is important.<\/p>\n

When you approach charitable giving as an investment in solving a problem, your goals start to shift. You\u2019re no longer just shooting off a check for a one-time crisis or out of a sense of obligation. Instead, you\u2019re working to make an impact on the causes that matter to you. Which brings me to my suggestion No. 2\u2026<\/p>\n

2. Create a giving plan.<\/strong> In my case, I set an annual charitable-contribution budget and designate a percentage of my income (roughly 10 percent) split among my five chosen charities, including ones that have directly touched my life. You could do something like that, too.<\/p>\n

For example, one of my best friends just died from brain cancer, so I\u2019m donating to the Henry Jackson Foundation for the Advancement of Military Medicine <\/a>in her memory. It\u2019ll help further brain cancer research by the neuro-oncologist who treated her.<\/p>\n

Perhaps you\u2019ll want to help a group making a difference in your community, like a battered women\u2019s or homeless shelter. I regularly give to The House of Ruth<\/a>, which serves abused and homeless women in Washington, D.C., and to So Others Might Eat<\/a>, which provides meals and shelter for the 7,298 homeless men and women in our nation\u2019s capital.<\/p>\n

To guide your giving, start by jotting down your charity mission statement: typically one to three sentences that put the purpose of your giving into words with goals for the next five years or so.<\/p>\n

Click here to read this article on Forbes<\/a><\/strong><\/p>\n

\u201cA mission statement is very personal, but it really identifies what\u2019s important to you and helps you prioritize your giving,\u201d says Amy Danforth, president of\u00a0Fidelity Charitable<\/a>, an independent public charity that has helped donors support more than 210,000 nonprofits with over $20 billion in grants.<\/p>\n

Most people don\u2019t have one. A recent Fidelity Charitable study<\/a> of 1,042 of its donors found that only 22 percent (27 percent of women and 19 percent of men) had a charity mission statement.<\/p>\n

One big benefit of a written plan is that it helps discipline you to say \u201cno.\u201d That said, leave some wiggle room for discretionary giving, because you may want to assist a new cause. I always set aside a small amount (around 15 percent of my total giving budget) for donations in memory of a person, friend or family member\u2019s pet who has passed away or to respond to a situation that really moves me.<\/p>\n

Next, create an action plan and determine your charities, how much you plan to donate to each and how often you want to fund them \u2014 maybe once a year or a monthly recurring grant, says Danforth.<\/p>\n

To kickstart your giving strategy, you might visit Fidelity\u2019s helpful Smarter Giving guide<\/a>.<\/p>\n

3. Do your due diligence. <\/strong>Scrutinize any charities you\u2019re considering to be certain they\u2019re valid and using funds prudently. As a rule you\u2019ll want to select nonprofits that keep their administrative and fundraising expenses below 25 percent of their overall budget.<\/p>\n

At GuideStar.org<\/a>, you can read the IRS 990 forms and other financial filings of 1.8 million nonprofits. CharityNavigator.org<\/a> and The Better Business Bureau\u2019s\u00a0Give.org<\/a>, rank charities based on their finances, governance and more. AtMyphilanthropedia.org<\/a>, a division of Guidestar, more than 3,000 experts have reviewed 783 \u201ctop nonprofits\u201d across 36 causes.<\/p>\n

For a man (or woman) on the street perspective of local charities, go to\u00a0Greatnonprofits.org<\/a>, where you can read community-sourced reviews from donors and volunteers in your area.<\/p>\n

Two other worthwhile charity evaluation sites: GiveWell.org<\/a> (which focuses on how much good charity programs do per dollar spent) and\u00a0GivingWhatWeCan.org <\/a>(inspired partly by \u201ceffective altruism\u201d ethicist Peter Singer).<\/p>\n

4. Consider a donor-advised fund. <\/strong>Here, you create a charitable account \u2014 usually at least $5,000 to $25,000 \u2014 through a financial services firm, like a mutual fund or brokerage. You get an immediate tax deduction for your donation (whether you\u2019re giving away cash, securities or other assets) and then allot grants of that money at a later date to a public charity under an umbrella name, like the Johnson Family Fund. (And you can typically make donations for as little as $50 to a charity you select, depending on the firm.)<\/p>\n

Don\u2019t ignore setting up a donor-advised fund<\/a> because you\u2019re not a billionaire or anything close. The median account at Fidelity Charitable, one of the big players, is $16,000; over 60 percent of its accounts are less than $25,000.<\/p>\n

Some people like to donate to these funds their long-held, perhaps inherited, stocks that have appreciated in value greatly over the years. That\u2019s because a donor-advised fund lets you deduct the stocks\u2019 fair market value, says Sandra Kingsley, a portfolio manager with FBB Capital Partners<\/a>, a fee-only wealth management firm in Bethesda, Md.<\/p>\n

\u201cIf you\u2019ll be donating securities that have appreciated in value, you won\u2019t owe the capital gains taxes that would be due if you sold the stock and donated the proceeds, and your deduction will be larger this way, too,\u201d Kingsley notes.<\/p>\n

With donor-advised funds, people can save up while they\u2019re still working what they plan to gift in their retirement when they may not have as much money on hand, says Eileen Heisman, chief executive of the National Philanthropic Trust and a lecturer on philanthropy at the University of Pennsylvania. \u201cIt\u2019s kind of like a squirrel \u2014 the fund is where they put all their stuff away to get ready for the winter.\u201d<\/p>\n

The big players in the donor-advised fund arena aside from Fidelity Charitable are Vanguard Charitable <\/a>and Schwab Charitable<\/a>. These companies handle most of the administration and management, typically charging annual administrative fees of 0.6 percent or less (some donor-advised funds charge 1 percent or more).<\/p>\n

For Steve Sternheimer, 73, a retired government international affairs specialist, and his wife, Sue, 73, a former high school teacher, the centerpiece of their philanthropy is the donor-advised fund they opened three years ago.<\/p>\n

\u201cIt helps us manage our giving,\u201d says Steve. \u201cWhen I retired in 2008, I didn\u2019t have a formal giving plan in place and was giving on an ad hoc basis. The fund organizes it for us. I can go online to my [Fidelity Charitable] account and quickly see how much I am giving locally, as well as nationally and internationally. And I can space my giving according to wealth appreciation, depreciation and the vagaries of the stock market.\u201d<\/p>\n

5. Consider setting up a family foundation.<\/strong> I wrote about this idea a few years back in The New York Times<\/a>.\u00a0 A family foundation<\/a> offers philanthropists who want more control over their giving a way to give besides writing a check to an established charity. As with donor-advised funds, you don\u2019t have to be a tycoon to create one; three out of five family foundations hold assets <\/a>of less than $1 million, according to The Council on Foundations<\/a>.<\/p>\n

\u201cCharitable giving is about a lot more than money, it\u2019s from the heart. It\u2019s finding a way to have an impact with skills and finances and engaging others to get involved,\u201d says David Tolmie, 60, a senior partner with The Edgewater Funds, a private equity firm based in Chicago.<\/p>\n

Tolmie, a longtime benefactor and nonprofit volunteer, co-founded the Faraja Fund Foundation<\/a> in 2001 along with his father and mother, now 87 and 85, his two brothers, their wives and their children. Their donations have built the Faraja Primary School for children with physical disabilities in Tanzania, Africa.<\/p>\n

\u201cStarting a school in Africa was an extraordinary effort,\u201d says Tolmie, chairman of the fund. \u201cI advise people who want to give back at this age to pick an achievable goal, so you don\u2019t get frustrated and give up on it. Start small and build momentum, rather than dream so big you never really get anywhere.\u201d<\/p>\n

\u00a9 Twin Cities Public Television – 2015. All rights reserved.<\/a><\/p>\n

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