Being a kind and generous person in today’s global society can sometimes prove to be a challenge. It seems every day we’re being asked to donate to organizations that support heart-wrenching causes, ranging from helping abused animals to sick children to wounded veterans and victims of natural disasters.
It’s natural to want to help all those in need, but financially, that just may not be possible for your family. So how do you decide where to focus your support?
“Philanthropy begins in the heart of people who give of their time, their talent, and/or their treasure,” says Jeff Boyd, PNC Wealth Management’s senior vice president and wealth director in Sarasota, Fla.
Turning a passion into a family legacy is at the heart of good financial planning. No matter how large or small a donation is, giving a little can go a long way toward helping others.
With a little planning, you and your family can make a difference in the world, starting with your own neighborhood. Many families become passionate about a cause or a charitable organization by sharing values through organized philanthropy, while others may have learned about it by donating time at their local church or soup kitchen.
“Individuals should discover how their own values shape and define the causes they are passionate about and support,” says Anne Hennessy, senior resident for strategic philanthropy for the PNC Center for Financial Insight®. “Many families talk about donating time and money differently, so deciding where to focus your charitable donations can be a challenge.
For example, millennials and younger generations may be more research-oriented, seeking measurable impacts for their time and money. Also, younger generations tend to want direct involvement in the organizations they support, while Baby Boomers are more likely to donate to large institutions," says Hennessy.
To help open the lines of communication, families may want to ask each other a few questions:
After having that conversation, these three steps can help you and your family focus your philanthropic efforts:
It can be very helpful to directly interact with organizations you and family members are interested in to form relationships. This can help you learn how your gifts of time, talent and money may be optimized.
Even after taking precautions to ensure that hard-earned money and time are being put to good use, two common concerns can remain.
“People often avoid giving away too much money for fear of running out during their lifetimes,” says Boyd. “Planning can go a long way to ease that fear and allow people to see how their generosity benefits the institutions that they care about.
Parents also may be concerned that their children will not agree with their decision to donate money instead of leaving a larger inheritance. On the other hand, children may be concerned that their parents would like them to save what they have, instead of donating it. Like most fears, perception is not always reality. Communicating with family members about their intentions is always the best idea. Philanthropy can and often should be a multi-generational effort,” he added.
Now that the holidays are here, it’s a good time to start thinking about how you and your family can give back – if you haven’t already. Remember, once you make a donation, maintain a record for tax purposes.
Also, remember that “tax deductible” means you may be able to deduct your donations on your federal income tax return, while “tax exempt” means the organization is exempt from paying taxes.
From the perspective of a main street bank, when we support local causes, we’re helping to cultivate a thriving business and arts community by emphasizing the importance of educational success, developing healthy neighborhoods, and building a strong workforce.
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