When everybody wants a donation

Planning your charitable giving for this season, and the years to come By Carol M. Harris Special to PRIME This is the time of year when we think about upcoming holidays, the end of another calendar year, and how lucky we are to be living an abundant life filled with family, friends, and happy occasions. It is also when we question how we can best make a positive impact on society with our charitable donations. Our mailboxes are inundated with pleas for help the homeless, the disabled, the poor, the illiterate, the unfortunate. Just how can you decide and what can you do? Sorting the pleas First of all, set aside only those organizations and institutions whose mission you believe in and want to support. Do not feel obligated to respond to, or even read, mail from an organization in which you have no interest throw it away! Now, before you open the solicitations you want to read, take a piece of paper and write down exactly how much money you have to donate at this time. Okay, now go ahead and read the mail. Which ones bring tears to your eyes, tug at your heart strings, or make you proud to be associated with them? Which ones are the "I definitely want to support" ones? Now you have to prioritize which one is the wisest use of your investment or donation? Put that at the top of your list. Then, choose the next one. Do this until you have gone through all the organizations to which you will make gifts. Whew! Giving a few dollars more Alright, so you still feel like you want to do more. That's wonderful! You don't have to contribute big dollars to be a philanthropist. All you have to be is a caring individual. If you don't need to give away huge sums of money for tax purposes right now, you may want to consider what is called a "planned gift". This simply means planning the type and timing of your gift in order to either increase the size of your gifts or continue your philanthropic support beyond your lifetime. While the most common form of gifting is by check (referred to as cash) you may also want to consider a gift of appreciated securities which allows for a charitable tax deduction for the full market value of the stock, up to 30 percent of one's adjusted gross income. The remainder may be deducted over as many as five additional years. Another point to consider is that capital gains taxes are avoided on the appreciated portion of stock gifts. A fully-paid insurance policy, which you no longer need, is another option. This can give you a deduction roughly equivalent to the cash surrender value of the policy. A donor may also purchase a policy and designate the organization as owner and beneficiary, making annual premium payments, in the form of annual gifts, tax deductible. Upon the demise of the donor, the organization receives the full face value of the policy plus any accumulations. Another option is for the donor to purchase a single-premium policy that would result in a deduction equal to the full premium. Outright gifts of real estate can provide exceptional benefits to the donor. A residence, vacation home, or other land owned for a long time, may have appreciated to such a degree that its sale would result in onerous capital gains taxes. Giving that property to charity could generate a sizable tax deduction and strengthen the organization as well. Personal property, such as works of art, jewelry, antiques, or rare books, which have appreciated in value over the years, can make an appropriate gift too. If the property is of direct and immediate use to the organization in fulfilling its mission, its full market value may be deducted. If it is not directly related to the mission, the cost basis in the property is deductible. Creating a legacy All these methods are ways in which you and I can provide a legacy of support for our favorite charities but only you can make the ultimate decision on how best you should disperse your assets to family, friends and charitable organizations. It could be a bequest, a life insurance policy, residuals of a retirement plan, a charitable remainder trust, or any number of wealth replacement plans. Creating gifts through your estate plan can accomplish any number of things: establish a perpetual family legacy for philanthropic purposes, avoid certain taxes on large retirement plans, increase your income, provide for dependents with special needs, avoid taxes on retained earnings, reduce income taxes, avoid the forced sale of a family business, and/or leave a larger estate to those you love. It is very important however, that you talk to a tax advisor or attorney, especially if you want to create some of the more complicated plans such as a charitable remainder trust, a unitrust, an annuity trust, etc. These are major decisions but ones which can leave you feeling really good about yourself because the legacy you leave behind will speak on your behalf for generations to come. So, rest easy this joyous and caring time of the year. Make your year-end donations based on your values, interests and personal circumstances and consider looking into a planned gift to continue your giving impact beyond your lifetime. Carol M. Harris is a professional and ethical fund raising and development consultant to area non-profit organizations with over 20 years of experience in annual giving, planned giving, special events, capital campaigns, and major gifts. She has been running her own business for almost a year and is currently working with Springfield Home for the Elderly, Inc. which is the parent organization for the Mason-Wright Retirement Community in Springfield. She can be reached by calling CMH Consulting at (413) 788-4386.