A Guide to Purposeful Philanthropy
by Lily Graves, CFP®, CSRIC™, Advisor & Shareholder at TCI Wealth Advisors
We’ve entered the season of giving, a time when many of us are planning gifts to surprise and show appreciation for loved ones. This is also a time when people often consider charitable contributions, embracing the spirit of the season and exploring end-of-year tax benefits. At TCI Wealth Advisors, we encourage individuals to consider ways charitable giving can align with the organizations and missions most meaningful to them.
Thoughtful Giving
Whether contributions are made today or through an estate plan, starting early can help ensure gifts are intentional and consistent with personal goals. Having clarity around how donations may be used can provide added confidence and fulfillment.
Choosing Charities
A common question is how to identify the right nonprofit. Beginning with personal interests is a helpful step. Consider the issues that resonate most with you and the needs in your community. Keep in mind the missions of nonprofits may evolve over time, so reviewing your giving plan periodically is worthwhile.
Researching Organizations
Once you have a good sense of where your passions lie, take time to research nonprofits that align with your goals. Donors may want to consider:
- Who the nonprofit serves
- How funds are allocated between programs and operations
- Evaluations from resources such as Charity Navigator or GuideStar
- The organization’s history, reputation, and transparency
Community foundations can also provide helpful perspective when exploring local giving opportunities. For example, in Southern Arizona, the Community Foundation for Southern Arizona helps connect donors with nonprofits in the region, offering insight into local missions and needs.
Structuring Giving
Some donors prefer to think about their giving in “buckets”. Are you prioritizing local or global causes? Do you want to be involved in specific capital campaigns? It is also worth remembering that all nonprofits have administrative expenses necessary to operate effectively. Understanding how resources are used is an important part of informed giving— undesignated gifts can be a considerable benefit to a nonprofit so they can decide where to best use those resources.
Planning Tools
Philanthropy can be incorporated into an overall financial plan. Options such as Donor-Advised Funds (DAFs) and Qualified Charitable Distributions (QCDs) may offer tax benefits in certain circumstances. For example, DAFs provide flexibility to recommend grants over time, while QCDs allow individuals age 70½ or older to direct funds from an IRA to qualified charities. Tax considerations vary, so consult with a qualified tax professional before making decisions.
Purposeful Impact
Philanthropy can reflect personal values, contribute to meaningful causes, and bring a sense of fulfillment
With thoughtful planning and informed choices, charitable giving can become a lasting part of an overall financial strategy.