The holiday season is here. For many Americans, that means it’s time to give to charity. A recent study found that 63 percent of all Americans donate to charity in the final two weeks of the year. Most of those donations go to churches, poverty-related organizations and children’s charities.1

There are a variety of ways to donate to charity. You might give gently used items such as clothes, furniture or toys. You might choose to donate your time. And of course, you can always give cash.

You also may be looking for ways to make a more lasting impact. You may have significant assets or insurance that you’d like to donate to charity over a long period of time. Before you start to gift assets, however, you may want to develop a strategy. That way you can be sure your donations are used in a way that aligns with your wishes, and you can meet all your objectives.

A financial professional can help you develop your gifting plan. Below are a few questions to get you started so you can identify the best tools and methods for supporting your favorite cause:


What do you want to accomplish with your donations?


Any plan or strategy should start with your goals. A charitable giving plan is no different. You may know what cause you want to support and possibly even which specific organization, but think more specifically about the use of your gift. What kind of impact do you want to have?

Research potential charities and see how efficient they are with their resources. A number of websites and organizations show how much each charity spends on overhead, salaries and administrative costs. You also may be able to speak directly with the charity and even direct how you want your gifts to be used.

Also consider the timing of your gift. Do you want to gift assets while you’re alive so you can see how they’re put to use? Or would you like to leave the donation as a legacy after you pass away? If the latter is the case, you may have more options available, such as using life insurance or a trust to facilitate your donation.


Are there any tax benefits you may realize from your gifts?


Your motivation for giving to charity is probably that you want to help others. However, there are also tax benefits related to charitable donations, so you can help yourself at the same time. The types of tax benefits available depend on your specific donation.

For example, you may be able to deduct your donations on your tax return, up to a certain cap. You also may be able to reduce gains taxes on certain assets by donating to charity or using a charitable remainder trust. A tax or financial professional can help you determine which types of donations would provide the greatest tax benefit.


What assets are available to give?


The simplest way to donate to charity is often to write a check. However, that’s not your only option. You could also donate assets that you already own. As mentioned, if you have assets that have appreciated significantly in value, you might consider donating them to charity through the use of a trust. The trust can sell the assets and avoid gains taxes, then pass the funds on to the charity upon your death.

You could also donate a life insurance policy to charity. If you have a policy that you no longer need, consider making a charity the new owner and beneficiary. You get a tax deduction for your paid premiums, and the charity gets the death benefit after you pass away.


Ready to develop your charitable strategy? Let’s talk about it. Contact us today at Jim Lee Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.




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