Smart Ways To Give To Charity
Many of us find charitable giving a meaningful way to make a positive impact. It is also an important component of financial planning. Below are various smart ways to give to charity. Before giving to any charity, we advise you to confirm a charity’s tax-exempt status at the IRS’s website.
Just Pick an Easy Way to Give to Charity and Go. Think About Taxes Later.
The vast majority of my clients say they want to give more to charities and causes they care about, and, importantly, be more structured and formal in their giving.
Alas, many of them have not actually started giving more or created a structure around charitable giving. And this has been bothering me for a while, as charitable giving is important to me (because we live with such unbelievable abundance, who are we not to share with those who don’t?), and I have clearly failed in enabling my clients to do it better.
What to do During Money Time
A while back, I wrote about handling money as a couple. (It's worth a read even if you're single -- many of the concepts carry over, with a little tweaking!) In that article, I talk about something called "weekly money time", where you create space to work towards your financial goals. However, I spent precious little time talking about what that actually means. What does "working towards your financial goals" even look like?
Maybe You’re Better off Giving Your Money to Causes You Care About, and Not Focusing on Tax-deductibility
When I started my firm in 2016, our household income went to $0.
Being the financial planner I am, my mind went immediately from “we have no income” to “oooh, what kind of tax strategies can I take advantage of this year?” One of the decisions we made was around charitable contributions.
I realized that I wasn’t going to get much tax benefit for donating to charity no matter what I did. My income was just too low. Deductions weren’t worth much of anything to me.
How (and Why) to Give Your Money Away
"Wait, what? Why are you telling me to give away my money? You're a financial advisor -- isn't it your job to help me keep my money?"
No, it's not. It's my job to maximize not just your return on investment, but your return on life. And giving your money away is a core part of that.
Let me explain, and then I'll get into some thoughts on how to optimize your giving. (I'm an engineer, after all.)
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