Financial advisors can do much more than just help you grow your portfolio. A charity financial advisor can help you improve your charitable giving. Philanthropy seems simple, but a charity financial advisor has a wealth of knowledge that will help you take your giving to the next level. Here’s how.
There are several complex rules, regulations and tax codes that govern charitable giving. These can vary by state, but a charity financial advisor can help you understand the ins and outs of your situation and help you to make choices that will maximize your philanthropy.
Defining Your Goals
What are your priorities in giving? How do you want your giving to change over time? What do you want your philanthropic legacy to be? Maybe you don’t know where to start. A charity financial advisor will help you define your goals and plan to achieve them.
Having a strategy for your long-term charitable giving will help you understand your goals in a unique way. Furthermore, your charity financial advisor will help you develop and implement a plan that helps you achieve these goals.
Incorporating Giving into Financial Planning
Charity financial advisors can help you incorporate your giving into your overall financial planning. For example, do you want to continue giving during retirement? Do you want to include philanthropy in your estate planning, business exit planning, or legacy planning?
These are all important things to consider. Your advisor can help you understand the big picture and plan for your desired outcome.
Furthermore, a charity financial advisor will be well connected to the charitable community. This means they will be able to direct you to effective organizations that align with your interests. Additionally, they will have connections with like-minded donors who can broaden your community network.
Donating Highly Appreciated Stocks
There are several ways a charity financial advisor can help you. One such option is by helping you to donate highly appreciated stocks. Donating stock directly to a charity is one of the most tax-efficient ways of giving. Here are four of the top reasons to make a gift of your highly appreciated stock.
- You can give more. If your stock has appreciated for more than a year, you are actually giving 20% more than if you sold the stock and made a cash donation. Why? This option avoids capital gains taxes.
- You may be able to reduce future capital gains. Do you have stocks you love and want to hang onto? Appreciated stock sets you up for substantial gains when you sell. Donating some of your appreciated shares and then buying new shares resets your cost basis at the current, higher price. This can reduce future capital gains tax exposure.
- Review and balance your portfolio. Even with great management, your portfolio can get out of balance. If a review shows that you need to rebalance your portfolio, donating stock can do that. Your advisor can help you decide which assets will work best for this.
- Donate without a hassle. Many people who want to donate stock avoid it because they believe it will be a hassle. However, there are easy ways to do this. Your charity financial advisor can walk you through the best way to donate your highly appreciated stock.
Charitable Remainder Trust
For certain individuals, a charitable remainder trust gives an immediate contribution to charity, reduces taxable income by dispersing income to the beneficiaries of the trust for a specified time and then donates the remainder of the trust to a designated charity.
This allows the trustor to make contributions, be eligible for a partial tax deduction and donate remaining assets in an irrevocable trust. However, the trust has to be large enough to provide income for you or the beneficiary while retaining enough value to benefit the charity. Speak with one of our financial advisors to see if you would be a good candidate for this strategy and to learn more details.
Discussing Strategies with a Charity Financial Advisor
Whatever your goals for your philanthropic legacy, a charity financial advisor has the special experience and education to make a big difference in how you donate. If you would like to learn more about donating highly appreciate stock or how a charity financial advisor can help you take your giving to the next level, contact Argent Bridge Advisors.