The Sweetness of Charitable Giving

Donating to charity is always a nice thing to do. After all, you’ve worked hard to get to where you are, and it feels good to be in a position where you’re able to give a little something back. Before you write that check or hand over that stack of bills, however, you need to speak with your financial advisor.

Financial advisors are knowledgeable about the smart ways to give financially, while still protecting yourself and your investments and while benefitting in the process. Just a sampling of the things your financial advisor can explain to you include:

1. The Importance of Giving the Right Way: Donating by credit card and cash, while common, are the least tax-efficient giving options!
2. How to Avoid Capital Gains Taxes: Capital gains taxes can typically be avoided when publicly traded securities are donated after they have been held for a year.
3. Asset Identification: Your advisor can help you to find unneeded assets that make great donations…and that net you something in the process.
4. Smart Company Stock Donation: A knowledgeable financial advisor can also help you with donating privately held company stock when you sell your business, enabling you to give back and avoid capital gains taxes in the process.
5. Set Up a Giving Plan: If “giving back” is truly important to you, your advisor can set you up on a livable plan so that you can give both now and in retirement.
6. Manage Giving Amounts: Your advisor can look at your finances and determine if you’re giving too much, if you could be giving more, and/or help you find your “ideal donation” amount.
7. Easier Donating: Financial professionals can also explain different options for simpler giving, such as donor-advised funds.
8. Determining Charity Legitimacy: Finally, financial advisors can help you to make sure the charity you’re giving to is legitimate and worthwhile; sadly, there are a lot of scams out there.

As you can see, giving is a little more complex than it might seem, but with the right financial advisor, you can make giving a wonderful, positive experience that will benefit both you and the organizations or persons you donate to. So, before you donate anything, sit down and have a conversation with your advisor!