Thoughts on Giving

As Thanksgiving approaches, the world stands with a heavy heart contemplating the recent tragedy in Paris and the ongoing violence throughout the Middle East. As Charles de Gaulle said when reflecting on the tremendous sacrifices made during World War II, “It is not tolerable, it is not possible, that from so much death, so much sacrifice and ruin, so much heroism, a greater and better humanity shall not emerge.” It is our hope that our humanity will not be defined by the hate and violence of such misfortune, but instead by our response.

For many, Thanksgiving marks the beginning of a season of generosity that flourishes through year-end. With that in mind, and in response to the tragedies noted above, we wanted to offer some ideas on ways to give back and how to maximize your charitable intentions.

Charity Begins Online

GoodShop - is an easy to use shopping site that lets you shop at your favorite online stores while allocating a small portion of your spending to the charity or school of your choice. There is a great selection of stores and the process is easy. Just select your charity, click through to the retailer’s site and shop. GoodShop takes care of the donation. Not every charity participates, but if you have holiday shopping to do online, this is a great way to put your efforts to good work. It’s a win-win for everyone.

Amazon - offers a similar service through Amazon Smile. By logging into Amazon through the Smile portal and specifying the charity of your choice, you can proceed with your Amazon shopping and the charity will receive 0.5% of the value of items purchased.

Charitable IRA Distributions

In previous years, the law has allowed IRA owners over age 70 1/2 to donate up to $100,000 directly from their IRA to qualified charities. This strategy has strong tax benefits for those who meet the age requirements, are charitably inclined, and don't need the distribution themselves. While the law expired in 2014, Congress has been known to renew these provisions very late in the year (and even retroactively in January).

If you would be inclined to make such a gift, you can proceed as if the law is in place and have a portion of your RMD sent directly to the charity of your choice. Then, if Congress passes the law, you will get the ideal tax treatment the law allows. If not, you will still get to claim the charitable deduction based on the amount donated.

Make Giving Easy

Donor advised funds - make giving to charity as easy as online banking. Once an account is funded; log in, select the charity, specify the amount, click submit, and you’re finished before your coffee gets cold. Donor advised funds exist in a variety of forms – local community foundations (Memphis has three: Community Foundation of Greater Memphis, Hope Christian Community Foundation, and Jewish Foundation of Memphis), or funds offered through Fidelity, Charles Schwab, Vanguard and others.

The video below does a good job of describing the benefits of using a donor advised fund for family giving.

donor advised

Donation of Appreciated Securities

At the intersection of investments, taxes and charitable giving, lies an exciting opportunity – exiting for us at least. If you have taxable investments with embedded gains you can give them directly to charity, which has significant tax advantages. Not only do you receive the charitable deduction for the donation, but you eliminate the capital gains tax liability associated with the investment. If you were planning to make the gift in cash, you can use the cash instead to repurchase the investment. The net result – you’ve made your gift, received your charitable deduction, and have the same investment portfolio but with a new, stepped-up cost basis.

Using a donor advised fund as a conduit for the donation of appreciated assets can provide even more flexibility. If you’d like to know more, please give us a call.

Wishing you and your family a peaceful and wonderful Thanksgiving!

Posted by Jay Healy at 2:31 PM
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