Thee reasons To Consider Charitable Giving In Your Wealth Plan

Three reasons to consider charitable giving in your wealth plan

As wealth accumulates, many of us are considering charitable giving, outside of our will, when formulating a wealth plan.   We all have causes that are near and dear to us and as we become more financially secure, the desire to support these causes financially becomes stronger within us. 

Rather than just whipping out your chequebook, it’s good to create a charitable giving plan.  In this post we offer a few reasons why philanthropy can be a rewarding way to give back to the community while making good sense for your financial plan.

Supporting a Cause you care about:

First and foremost, our desire to contribute comes from an overwhelming desire to make a difference.  We are passionate about so many things, and donating to a cause that holds special meaning to us is a way to personally make that difference.   

In some cases, though, we may not have a specific charity or organization we want to contribute to, but still have the means and desire to contribute.  Who do we turn to?   One place to look is to discuss your wishes with a trusted advisor who has the experience and expertise to help guide you.  For us, planning for philanthropy means matching our client’s values to a charity’s mission.  First, we identify which charities our clients might find interesting and rewarding. There may be several that resonate with them, and after discussions with the client, we narrow it down to two or three. That’s when the research comes in.   The research involves making sure that the organization is a reputable non-profit with a proven track record of achieving goals that you feel are necessary to make them worthy of your consideration. 

Even if you don’t call on your advisor, this strategy is a smart way to determine where you ultimately choose to direct your donation.  Remember, there is no amount that is too great or too small.  You work hard for your money and it is important that your charitable giving respects the work you put into earning it to begin with. 

Reaping the tax benefits:

There are many ways to donate that are beneficial from a tax point of view, and this forms part of the planning process. Donating securities that have appreciated in value, for example, can be an effective way to get some tax relief on the capital gain.

A point to keep in mind if you are making a contribution of this type is if the organization has the capacity to be a recipient of this kind of donation.  Some charities definitely have more ability to accept sophisticated instruments as donations than others who are more grass roots in nature.   It’s important to keep the organization’s needs and resources in mind and to ensure that charity you wish to support will benefit from an in-kind donation of a security or similar investment. 

Regardless of the type of financial donation that you make, there is likely a measurable tax deduction for you, so in addition to the enormous benefit to your chosen charity, there is a benefit to you as well. 

Establishing a Private Giving Foundation:

Another option that people often don’t think about is to create a Private Giving Foundation. This is a vehicle created for donating to a number of charities over a longer time frame.

Setting up a Private Giving Foundation requires just $10,000 capital to start, and can often involve the whole family. It is not uncommon for clients set up a Private Giving Foundation and have their kids and even grandkids sit on the foundation’s board, helping to make the donating decisions. It’s a wonderful way to involve the younger generation and give them the philanthropic experience together with learning new skills. 

Private Giving Foundations are more complex in nature due to the logistics in creating them, however if you are considering a larger sum to donate, they may better suit your needs to meet your charitable giving goals in a way that also provides you with a tax benefit as well. 

Every dollar makes a difference:

If you are considering making a charitable donation of any form or amount, thank you!  In Canada alone, there are over 86,000 registered charitable organizations providing incredibly important services to our communities.  It is because of the selfless generosity of people like you that these groups are able to do the important work that they do, and without you, none would be able to survive.   At Sea Glass Wealth Advisory Group, our passion for our communities is why we are committed to helping our clients establish a charitable giving strategy that is right for them.  Investing isn’t just about growing your wealth, for many it is about using their wealth in a way that brings fulfillment and joy not only to themselves, but more so to those who benefit from it the most.    

If you would like to learn more about how you can make a difference, we would love to meet with you to help guide you along the way. 

We are looking forward to the opportunity to meet you!  For more information, please feel free to reach out.

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