Philanthropy:

Maybe you want to start a foundation to help end poverty, have a passion for the arts and want to fund a scholarship program, or you simply give to make a difference in your community. Whatever your reason – who you donate to and why can be a very personal and sometimes sentimental decision. However, being thoughtful and intentional about why you give is just as important as finding the right way to give.

Philanthropy basics

Learning about your experiences with money helps us give you personalized and holistic guidance. When we help you make financial decisions, we’ll ask questions until you find clarity of purpose. Your responses then become the framework for helping us guide you in confidently making these important decisions. This is true for all financial decisions, including charitable donations.

Our dialogue begins with obtaining the answers to questions such as these to hone in on what’s most important to you when giving.

• What type of giving brings you the most joy?
• Are you having the charitable impact you expected or initially hoped for?
• What has been your process around giving decisions?
• Would you like your philanthropic work to continue after you’re gone?

When we know your philanthropic goals, we can help determine the type of organizations and donations to consider and the appropriate vehicle to direct your gifts.

Below are three common ways to give to charitable organizations:

• Direct gifts – Often, charitable donations come in the form of direct gifts, cash or checks. Sometimes these direct gifts can be transferring stock, mutual funds or other publicly traded securities or non-cash gifts like a collection of art.
• Endowment-like vehicles – Another type of charitable giving is through donor advised funds (DAF) and private foundations. DAFs are accounts set up at a public charity that allow you to make contributions directly to the charity that are immediately tax deductible (e.g., Salvation Army). In comparison, private foundations are tax-exempt organizations (5013c), that do not qualify as a public charity, which can be set up as individual, family or corporate foundations (e.g., Rockefeller Foundation, Coca-Cola Foundation). With a foundation, you control how funds are invested and distributed.
• Split interest vehicles – The last common type of donations are charitable gift annuities (CGA) and charitable trusts. These vehicles are used to support charities but can also provide income to you. A CGA is a contract between you and the charity whereby you transfer your assets to the charity in return for the charity’s agreement to make fixed lifetime payments to you as the beneficiary. Charitable trusts allow you to receive income to support your living expenses; upon your death, the remaining funds will transfer to a qualified public charity.

Setting up the proper vehicle will not only help you in reaching your philanthropic goals but may also benefit your broader financial situation (e.g., tax deductions).

Strategic philanthropy

A philanthropic mission is the combination of the reasons, motivations and purpose of why you are giving. There are several ways to be strategic about your philanthropic mission. Part of the process is to clearly define what the benefits of philanthropy are, and which benefits are important to you.

In our work with individuals and families, we’ve identified four key steps in helping define a philanthropic mission and strategy. We take our clients through these steps, each one building upon that last, to help them articulate their philanthropic mission and the strategy to achieve their vision. You can utilize these steps whether you’re just starting the journey, changing direction or even preparing for a new leadership role.

1. Identify your philanthropy goals and purpose.
2. Determine your philanthropic mission.
3. Decide how to fulfill your philanthropic mission.
4. Articulate the impact you are aiming for.