Beyond Taxes: Reflecting on Your Charitable Giving at Year-End

Charitable giving decisions are best made following thoughtful reflection. Yet inertia and tax deadlines can conspire to push the fulfillment of those good intentions to the end of the year, when they must compete with so much else for your attention.

Is there a better way?

Consider the strategy of Kent and Susan Garlinghouse of Topeka, Kansas. For many years they have contributed appreciated securities at year-end to a donor advised fund at their local community foundation. Having met the tax deadline with the contribution, they can then put off the more challenging and rewarding part of the giving process - choosing recipients to recommend for grants and deciding how much each might receive - until later.

The fund allows donors to recommend grants throughout the year for charitable purposes. "That way, you can fit your donations into a program you've proactively decided upon rather than scurrying around trying to find a charity," says Kent Garlinghouse.

The Garlinghouses sit down in April, and again in November, to work out the details of their advised giving program. "A lot of thought goes into it," says Susan. Their planning, she says, "conveys to the groups we give to that we're going to be there each year. It forces us to focus. And it helps us to have a good feeling about the gifts we are able to give."

Shaping a giving program

A thoughtful giving program also can serve as a way to share your values with the rest of your family. When Chris Getman of New Haven, Conn., established a donor advised fund with his local community foundation he appointed his three grown daughters as advisors to the fund. "I receive the tax benefits, and my kids enjoy the pleasure and responsibilities of giving," says Getman. His daughters, two of whom live in Wisconsin and the other in Atlanta, confer and select recipient organizations once a year. “The kids feel really good about the decisions they make together," says Getman.

In shaping your own giving program, spend some time thinking about what you want to accomplish. "Do you want to make an immediate impact with your gift, to feed someone today? Or do you want to look toward the future?" asks Susan Garlinghouse, who says she and Kent are "delayed gratification givers" who take a long-term view.

You may have both short and long-term goals. The following are a few of the things you might consider as you establish or refresh you giving plan in the New Year:
• Do you want to make one-time gifts or provide ongoing support to organizations?
• What degree of recognition and visibility would you prefer?
• Do you wish to focus on a single issue or several?
• Would you like to effect change on a local, regional or national level?
• How much family involvement do you desire?

Reflecting on your past history of giving and volunteerism—and which experiences gave you the most satisfaction—can help you answer these questions. You might also wish to think about what you consider “the most significant problems that face society, and where you want to make a difference," says Kent.

How your community foundation can help

While the Garlinghouses focus their giving on groups with which they have had a personal association or feel a strong sense of connection, they know the community foundation is there to support them for needs beyond recipient selection.

You may find that you would benefit from assistance in choosing organizations to fund. Your local community foundation can help in a number of ways, from offering research on potential grant recipients to taking you on a site visit. If you care strongly about a particular cause, your community foundation can help you determine which organizations, locally or nationally, are the most involved or offer high impact programs. Once you've made a decision, your community foundation can provide follow-up analysis to assess the impact of your grant. And if you want to give, but prefer to leave the details to others, you can ask your community foundation to allocate your contributions according to your priorities or its own.

As the Garlinghouse and Getman families have shown, charitable giving need not be a tax-driven process. By establishing donor advised funds at their community foundations they have been able to eliminate the pressure imposed by tax deadlines. And community foundations can offer expert assistance and consultation in constructing a meaningful, effective giving program.

That allows you and your family to focus on what is most important. "Giving is not so much an obligation as it is an opportunity," says Susan Garlinghouse. "It's an opportunity to be part of something bigger than yourself. That’s very important to me."

Caroline Heine

Posted at 1:00 AM, Nov 04, 2008 in Accountability | Intergenerational | Tax Issues | Permalink | Comment