Strategic Philanthropy - Balasa Dinverno Foltz LLC

Strategic Philanthropy
“Charitable giving is what most of us do – reactively responding to requests for gifts. Philanthropy is more strategic in nature –
proactively planning where our dollars are going and the impact they are having” – Steve Condon, Truepoint Wealth Counsel, LLC
Philanthropy Begins at Home – Nurturing Family Values That Foster a Generous Next Generation
Start Early – Initial lessons can be simple such as having kids set aside part of their allowance and
delivering the donation personally each year.
Lead by Example – Exemplify the joy of giving and explain to children how money can be a tool to create
better lives for others. Studies have shown that talking about philanthropy with your children makes them
12.5% more likely to donate time or money to charity. 
Giving Is Not All About Money – For many charities donating your time and talents are of equal or greater
value than a monetary gift. 
Establish a Giving Mission Statement for Your Family – For example “The mission of the Jones Family is
to support women and families through programs that promote independence, empowerment and domestic
violence education.”
Openness – Discussion with family members around giving can help the next generation take ownership of
your giving strategy and avoid surprises and bitterness.
Top 5 Things to Consider When Choosing a Charity
Understand the Charity’s Mission Statement – Ensure their mission aligns with your family values and
supports causes you are passionate about.
Verify the Charity is a 501(c)(3) Nonprofit Organization – This means that the donations the group
receives are used for charitable purposes and that your gifts to the organization are tax-deductible.
Ask Questions and Look for Accountability and Transparency – Ask: How will my gift be spent?
How many people did you help last year? In what specific ways?
Check the Charity’s Spending Ratio – When you donate you want your money to make a difference. In
general, efficient organizations spend at least 65% of their budgets on programs and services with less
than one-third going to administrative and fund raising expenses.
Consider Location – Do you prefer a local charity, nationwide or an international organization? Giving
locally can improve your community while providing opportunities to donate your time and talent in
addition to your treasure.
Helpful Resources to Research Charities:
GuideStar –
Charity Navigator –
Better Business Bureau Wish Giving Alliance –
Strategic Philanthropy
Tax Efficient Giving
Donate Appreciated Securities
‒ Provides the donor with a current year tax deduction while avoiding capital gains tax.
‒ The charity receives the full value of the gift.
‒ Example: You want to gift $10,000 to charity. You can gift cash or 20 shares of Google currently trading at
$500/share which you purchased for $200/share:
Value Charity Receives
Income Tax Savings
(30% Rate)
Capital Gains Tax
(20% Rate)
Gift Cash
Gift Google Shares
Donor Advised Fund
‒ A charitable giving vehicle administered by a public charity created for the purpose of managing charitable
donations for a family or individual.
‒ Allows a donor to contribute cash or securities and receive an immediate tax deduction.
‒ After a contribution is made the donor can direct where they want the funds to go.
‒ Used by families to allow multiple generations to be involved in giving without setting up an expensive
family foundation which tends to be high cost and provide minimal privacy.
Donate Your IRA Required Minimum Distribution (RMD)
Note: Currently waiting for Congress to extend law to 2015.
‒ If you are over 70½, you may make a tax-free transfer of up to $100,000 from your IRA to a charity.
‒ The transfer counts as your RMD but is not taxed to you as income nor counted as a deduction.
‒ Avoiding counting the transfer as income prevents consequences such as making more of your Social
Security benefits subject to taxes, higher Medicare premiums and having your itemized deductions and
personal exemptions reduced.
IRA Beneficiary to Charity
‒ Leaving an IRA to charity allows you or your heirs to avoid paying income tax on the IRA contributions and
earnings while also reducing your taxable estate. The charity benefits from the entire gift.
Additional Complex Strategies Exist
‒ Charitable Remainder Trusts And Family Foundations
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Future performance of any investment or wealth management
strategy, including those recommended by Balasa Dinverno Foltz LLC (BDF), may not be profitable, suitable for you, prove successful or equal historical indices. Historical indices do
not reflect the deduction of transaction, custodial or investment management fees, which would diminish results. Any historical index performance figures are for comparison purposes
only and client account holdings will not directly correspond to any such data. BDF’s current written disclosure statement discussing advisory services and fees is available for review at or upon request. BDF does not provide legal, tax, insurance, social security or accounting advice. Clients of BDF should obtain their own independent tax,
insurance, and legal advice based on their particular circumstances. The information herein is provided solely to educate on a variety of topics, including wealth planning, tax
considerations, insurance, estate, gift and philanthropic planning. © 2015 Balasa Dinverno Foltz LLC