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When Considering a Charitable Gift, Ask Yourself These Four Questions

Posted June 2021

Being able to make charitable gifts is a wonderful privilege. Deciding how much to give, which charities to support, what asset(s) to give, and when to give requires focus and a plan. As you contemplate your donations this year, answer these four questions.

1. How much should I give?

Some people typically donate the same amount each year to specific charities. You may respond to special asks, as many of us did in 2020 during the heart of the pandemic. The amount of each donation may ultimately be based on the total you have available to give away in a given year.

Some wish to establish an endowed fund and thus make a larger gift, ensuring their family name continues in perpetuity. Others commit today to a multi-year gift, pledging an amount larger than they can give in one year but ensuring a greater impact.

2. Which charities should I support?

Deciding which charities to support is a personal decision. Spouses often confer with each other and share common charitable interests. Many give to their alma maters, to religious organizations, to health care organizations, to support social causes, the arts and culture, environmental causes, animal organizations, and community development. Some mostly support local charities, while others support national and international organizations. Some spread gifts among a large number of organizations, while others focus their giving on three or four charities—hoping to have a larger impact at fewer organizations.

3. What asset(s) should I give?

The default gift is often cash—which could be a check, a credit card, or a text. A gift of cash is simple, easy, and quick. However, gifts of appreciated assets—such as stock—offer additional tax benefits. The biggest benefit is the avoidance of having to pay tax on the gain. Savvy donors consult with their advisors to minimize taxes and maximize the impact of their giving.

4. When should I give?

While the highest percentage of gifts are made in the final quarter of the year—often in December—individuals make gifts throughout the year, whenever it is most convenient for them. Filing tax returns can serve as a reminder of the tax benefits of giving, but most of us make gifts to support the charity’s mission or when asked to give an annual or special donation. Honorary gifts and memorial gifts are popular and can be made at any time.

We would be glad to discuss with you the giving strategies that best fit your charitable, financial, and personal goals.

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