How Your Financial Plan Can Make a Difference: Creating a Legacy for Charlotte’s Future
Planned philanthropic giving is smart financial planning
For many of us, supporting local charity groups and volunteering our time is second nature. It’s something we do for our kids’ school fundraisers, the charity fun-runs we participate in on weekends, and the fundraising events we support and attend. What if you could take that passion of caring for your local community and make it a strategic part of your long-term financial plan?
Planned philanthropic giving is not only a positive way to contribute to your community, it’s smart financial planning. In 2015, seventy-one percent of charitable giving was made by individuals, not corporations. This equates to a whopping $264.58 billion donated by individuals¹. These numbers show that charitable giving can have a huge impact on your local community for generations to come, as well as increase your financial stability by triggering tax breaks — and you don’t have to be a millionaire to get started.
1. Why charitable giving matters
Charitable giving impacts both your personal finances as well as your sense of community involvement. It’s important for three main reasons:
· It’s an impactful way to help others. The greater we make that a priority, the healthier our communities become, and hence we all benefit from a stronger place to live, work, and raise our families.
· It can reduce your current tax burden. By reporting donations you make throughout the year, you can reduce your taxable income (up to certain limits).2
· Depending on your personal economic situation, it may be an effective way to manage estate tax issues.
2. How to use financial planning to achieve charitable giving
While you can start making charitable donations or volunteering at your local Salvation Army today, working with a qualified financial professional to create an integrated long-term financial plan will allow you to make ongoing donations, and strategically invest your assets where you can have the most impact.
People often believe they need a certain level of wealth before they can even approach a financial professional for help or establish a charitable giving plan. Clients often say, “I’d like to have this house” or “these savings” or “I’d really like to help, but there aren’t any funds leftover at the end of the month.” In reality, if you have a steady income, you can start working with a qualified advisor today and build charitable giving into your financial plan; it’s never too late to start! Working with the right financial coaching, I believe, is really important for building a charitable giving plan because it helps identify your priorities and keeps you on track to achieve them.
Once you’ve established that charitable giving is a priority for you, there are three main ways to give: time, talent or treasure. The easiest way is to give “treasure” directly in the form of cash by budgeting for charitable giving, but there are several gifting strategies that allow for long term giving and creative estate planning.
3. Steps to Investigate
Once you have identified the charitable organizations you want to work with, there are a gamut of options you can implement, including (but not limited to):
· Making a non-profit the beneficiary of your 401K or IRA. Proper planning and preparation can allow individuals to earmark other assets that may have more favorable tax treatment for inheritance by their heirs.
· Gifting securities, property or business interests.
· Using specialty planning options such as Donor Advised Funds, Pooled Income Funds, Charitable Remainder Trusts, and more — all of which can be implemented with the help of the right professionals.
4. Local Charlotte opportunities
In addition to working with a professional advisor, there are also many wonderful organizations in Charlotte that create opportunities for volunteering and philanthropic planning. Among them are:
· Share Charlotte, an organization dedicated to connecting community members with ways to donate and volunteer.
· The Women’s Impact Fund, an organization that works to maximize women’s leadership in philanthropy and focuses combined donations to increase the impact of gifts as well as allow members to help direct which grant recipients benefit each year.
· Foundation for the Carolinas (FFTC), an organization that maximizes philanthropic planning for personal and corporate giving across the region.
*Please note. Consolidated Planning is not affiliated with any of these organizations and it is important to ensure you vet any charities before you start working with them. In addition to personal background checks, there are several online resources that may help screen a charity including; Charity Navigator (charitynavigator.org), GuideStar (guidestar.com), American Institute of Philanthropy (a/k/a Charity Watch) (charitywatch.org).
Building a financial plan that includes charitable giving is a positive way to leave your legacy and contribute to the wellbeing of the community. Not only are you rewarded by a feeling of satisfaction that you’ve helped others, but you’re also accomplishing your life goals at the same time.
¹ Charity Navigator, Giving Statistics, http://www.charitynavigator.org/index.cfm/bay/content.view/cpid/42, 2016
2Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
About Nicole Pilo
Nicole Pilo is a financial specialist at Consolidated Planning who brings her knowledge and experience to the financial services industry in order to help others achieve optimal financial balance, while pursuing their goals and dreams. “Financial planning, to me, is so important because it helps you protect yourself and your family against any of the unexpected twists and turns that life hands you, while empowering you to move forward and achieve your goals. It is my privilege to help my clients achieve their definition of success.”
Nicole spends her spare time with her husband, Mike, and their three children, participates in community service activities, serves on the board of the Women’s National Book Association, the board of her local chapter of Duke University Alumni, and enjoys kickboxing. She is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), and a Financial Representative of Guardian.