Philanthropy is a part of our culture. Last year, it surged past the $400 billion mark for the first time. According to the Giving USA Foundation, a 5.2 percent year-over-year increase resulted in charitable organizations receiving about $410 billion.
While the increase is impressive, there is a disconcerting trend: Fewer Americans are donating to charity – between 2000 and 2014, the percentage fell from about two-thirds to little more than half. Could modeling charitable giving for loved ones in the next generation stem this tide? How do you leave a bequest?
Tips for leaving a bequest
Looking at the total amount of giving in 2017, bequests accounted for about 9 percent, or more than $35 billion. Charitable dollars went to a variety of sectors such as religious, educational and human services and health nonprofit organizations. Giving to foundations and the arts experienced the greatest growth.
How do you incorporate a charitable giving strategy into your estate plan? It can take balancing. Talking over your desires with loved ones after updating a will or adding a trust is also a good idea.
With so many nonprofits providing valuable services to residents of the greater Denver metro and mountain communities, how do you decide what to support? Review past donations and start to think about what is most important to you and your family.
If music is important, you may choose to support an organization that provides instruments for lower-income students and organizes trips to the symphony. Animal rights might be a passion and a gift to a no-kill shelter could help it to continue offering needed services. Donations to a foundation or starting a foundation are other ways to focus on several important initiatives – for example, eradicating polio, malaria and other infectious diseases.
What assets to give?
Cash donations are always appreciated, but many charities accept gifts of securities, real estate or artwork. A painting purchased years ago when an artist was unknown may have appreciated significantly. Giving it to a hospital foundation program that provides services to needy pregnant women has a double benefit. The program receives needed funds and you might receive tax savings.
How to leave your gift?
You may list charitable gifts in your will. Depending on the size and complexity of your estate, you may also use a charitable remainder trust or a private foundation to minimize potential estate taxes.
Work with an experienced estate planning attorney to develop a strategy that best meets your needs. Then don’t forget to communicate it to loved ones so there are no surprises.