Developing an effective philanthropic strategy that aligns with your values.
As an investor and philanthropist, you are in good company. According to Giving USA 2020: The Annual Report on Philanthropy for the Year 2019, people and organizations gave close to $450 billion to charity in 2019. In addition, there is a growing number of opportunities to align your charitable giving to your personal goals and values. According to the Internal Revenue Service Data Book, there were close to 1.365 million religious, charitable, and similar organizations in the U.S. for fiscal year 2019 compared to 516,000 in 1991.
The growth in this area ties to an increasing desire among donors to be more strategic in aligning charitable giving to personal goals and values. Forming an Intentional Giving Plan—rather than solely responding to charitable requests—may allow you to have a greater impact on the organizations doing the work that matters most to you. Here are five steps.
1. Engage your team early
But how do you start the process toward intentional giving? Start by working with your financial team to understand prior giving motivations.
“Many people respond to requests for donations without thinking about whether the gifts they make are really aligned with the causes they care most about,” says Beth Renner, National Director of Wells Fargo Philanthropic Services. “At Wells Fargo Private Bank, your relationship team can help you look at your giving history to see how it aligns with your personal values—and help you see where you might make changes so that your giving goes to causes you really care about.”
2. Know your overall intentions
In addition to weighing your giving against your values, you also want to consider other goals. Your charity of choice will obviously benefit from your gift, but what personal objectives do you want your gift to meet? Are you looking for a tax benefit? Do you want recognition or anonymity? Are you interested in creating a legacy? This information will help drive the decisions in the next steps in your plan.
“Your wealth team can help you make sure that your Intentional Giving Plan fits within your overall wealth management plan,” says Renner. “They also can share details about options that can help you meet those goals.”
3. Dig into the details—and visit, if needed
You’ll want to take a hard look at the plans and performance for organizations that stand to benefit from your giving. Are the organizations sustainable, well-run, and making a high impact in their areas of interest? This is another area where your relationship manager can help. Phyllis Silverstein, Senior Regional Fiduciary Manager for Wells Fargo Philanthropic Services, notes that, in some cases, she’ll accompany her client and his or her family to perform site visits, which lets them see the charity in action. “We go a mile deep to make that difference,” Silverstein says.
4. Explore all your giving options
Sometimes an immediate, outright gift makes the most sense, but before you write a check, consider exploring your options help your giving have the most impact.
“At Wells Fargo Philanthropic Services, we look for ways to help amplify the impact of your dollars toward meeting the goals we’ve outlined together,” says Silverstein. “Your relationship team can provide the perspective you need to select the options geared to your objectives.”
Among the tactics to consider for your Intentional Giving Plan:
- A donor advised fund. Make a donation to a donor advised fund, and you may receive an immediate tax benefit—you also get to decide when funds are distributed to your charity of choice.
- A charitable remainder trust. This option lets the donor retain an income stream for the time specified in the trust, with the remainder of the donated assets going tax-free to your charity of choice.
- A charitable lead trust. This option allows a trust to make contributions to a charity over the length of time specified in the trust, with the remainder of the donated assets going to another beneficiary.
5. Revisit your plan
Your priorities in life change over time, and your Intentional Giving Plan should adjust to stay in line with your goals and values. This can be as simple as an annual review with your relationship team to make sure your plan is on track—that you’re hitting your objectives and staying in line with your wealth management plan—and to make sure you’re up-to-date on information about the charities you support. “I view it as an ongoing process,” Renner says, “as everyone’s philanthropic journey is constantly evolving.”
Wells Fargo & Company and its affiliates do not provide legal or tax advice. Please consult your legal and/or tax advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.