Saying Thanks

Let me start by saying Thank You to all of my readers, clients, and business partners for our relationship. Like many people, it is a sentiment that I believe and feel but don't say enough.

As the holiday season approaches, people often have several different things to think about.  Some are focused on Thanksgiving dinner, others on finding the best deal in certain stores, and others on how they can help their favorite charity one last time for the calendar year.

I often advise people that charitable giving is part of the estate planning process, and can follow a similar thought process.  It comes down to two main concepts:  control and taxes.

Control

Ask yourself some questions initially to determine what you are really trying to accomplish.

• Is there a specific organization you're trying to help?  If not, take a look at sites like GlobalGiving or Donors Choose to identify potential recipients.
• Are you trying to help in a specific way, or just provide general assistance?
• What are you comfortable doing?
• What does the organization need?
• Do your interests match what they're asking for?
• What values do you want to teach your heirs?  What legacy do you want to leave?

Introspection, along with a conversation with someone from the organization, can help clarify what the best fit is, what you want to donate (time, talent, treasure), and how the gift should be structured.  For example, let's say your favorite 501c3 organization has a particular project that piques your interest.  Do you want to volunteer for the organization, participate on a board, or provide funds to be used only for that project (and not for salaries, overhead, etc.)?

Taxes

While most are aware that charitable contributions are potentially deductible, many don't realize that the amount you can deduct may depend on the amount, type of gift, and type of organization.  Be sure to have your financial team on one accord here, as your accountant, financial advisor, and attorney(s) - (estate planning, business, etc.) could all have duties to fulfill depending on the strategy you pursue, especially if one of your goals is to reduce the size of your taxable estate.

• Does the 501c3 organization have a foundation?  Look it up on Guidestar.org or a similar site.
• If so, is the foundation, public or private, operating or non-operating?  This is critical to determining how much of a deduction you can take (up to 20%, 30%, or 50% of AGI).
• How well is the organization managed?  Review Charity Navigator or similar sites.
• Do you want to make a donation now a choose an organization later?

The right solution depends on your particular situation such as: donating cash or property; establishing a donor-advised fund; creating a charitable trust; or creating a private foundation.  Each has different potential benefits, drawbacks, and costs associated.

One thing is clear:  it's best for you to make the decision while you can instead of it being made for you.  If you want more information, visit "Our Website" above to contact us and discuss your situation more in depth.  

One Size Does Not Fit All...and That's OK

Image courtesy of zole4/Freedigitalphotos.net

Have you noticed all of the advertisements that essentially say, "We know the answer... the one way you should invest"?  It's a good line for selling something, but could be questionable if you dig deeper.

Given the multitude of perspectives and investor preferences that exist, how can one approach fit everyone?  The answer is simple.  IT CAN'T.

If one approach were deemed to be correct, then logically, it still couldn't work in a marketplace.  For example, if you assume all investors want to be correct, and the correct action were to buy something, there would be no one to buy it from.  If the correct action were to sell something, there would be no one to sell it to.

Solutions are not absolute.  They are relative to your situation.  In my opinion, your success rests in having a plan that helps you understand what tactics you may need to take while being flexible and nimble enough to change as needed. In the beginning of Sun Tzu's The Art of War, he explains that one must understand:

• Your Belief System - what you want to accomplish and how you want to do it;
• The Environment  - what uncontrollable factors may help or hinder you;
• The Situation - where you are now and what it will take to get you to your goal;
• Leadership - confidence in your/the decision maker's abilities;
• Management - the proper use of resources at the appropriate time.

The solutions you choose may change over time due to uncontrollable, changing conditions.  No one solution will fit everything, but you can increase your odds of success by utilizing them properly.