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Helping Clients Help Charities

Indiana University found that a whopping 98.4% of high-net-worth households give to charity. This matches our experience in working with investors such as yourselves. We find that charitable giving is a very high priority for our clients – maybe second only to financial security for them and their families. While giving certainly comes with its fair share of feel-good, we also see that many clients have anxiety related to charitable giving. Here are the top concerns that our clients report:

  • They can’t figure out how to prioritize it in relation to other goals – how can they be good people but still be happy?

  • Many struggle with their giving in relation to Christian teaching on tithing – could giving 10% put their family at risk?

  • Often they are concerned about how their beloved charity will spend the funds – will their hard earned dollars be put to good use?

  • Sometimes they are solicited for an amount that makes them uncomfortable – can they afford it or should they afford it?

Here at Lily, we see charitable giving as a core element of our financial services. Between Kevin’s background in fundraising and nonprofit management and his expertise in planned giving, and Dan’s specialty in managing charitable endowment funds, Lily gives clients a special edge in charitable planning. With many of our clients seeking educated guidance in their charitable giving, we wanted to take the time to let everyone know what their options are.

Gift Planning

Planned giving is more than just leaving a bequest. There are many types of planned and structured gifts that can benefit a donor and a charity while the donor is still alive. What donors usually do not know, is they can give a gift to a charity – the same amount – 10 or more ways. Some of these ways are best for the charity, some are best for the donor, and some are a wash. For example, donors required to take a minimum distribution from their IRA can make a gift directly from their IRA rather than writing a check, thus reducing the RMD sum. In the end, the charity gets the same amount and to donor gives the same amount. However… the donors AGI will be decreased, lowering his/her income tax liability! This could mean significant tax savings, better social security benefits, and decreased Medicare premiums! (The same result but the donor significantly benefits from giving one way over another.) If you are giving consistently or know of a large gift coming up (capital campaign or the like), we encourage you to chat with us. It will be worth your time to ensure that you give in the most efficient way possible.

Nonprofit Research

Donors who are concerned with how their charitable gifts are being spent are welcome to talk to us about their concerns. With extensive experience in nonprofit management, we can help you figure out exactly what questions to ask, which financial reports to review, and how to grade your beloved charity’s stewardship of their funds. In addition, there are several ways to restrict the use of funds, which we would be happy to help with.

Giving as Part of Financial Planning

It’s important for you and use to understand how your giving fits into your overall financial plan. We find that many donors have charitable giving as part of their trust and estate plans. This is awesome – but our clients don’t always know that they can enjoy the benefits of their giving now. As a few examples… Let’s say you are selling a business to fund a large portion of your retirement. You could use something like a Charitable Remainder Unit Trust (CRUT) to reduce your tax liability the year you sell your business and still receive income for the rest of your life – both of which help your goals – while at the same time benefiting a nonprofit you love.

As another example, let’s say you know you will be leaving 10% of your estate to charity when you pass. By allowing a professional to help you plan, we could take a look at the current set-up of your estate and make recommendation regrading ways to consider doing this in a fun and exciting way. With a Real Estate Investment Trust (REIT), a donor can give away a vacation home to a charity (worth 10% of their estate) before they pass away, allowing the nonprofit to hold it on their asset sheet, but the donor and his/her family can have full use of the house for a certain period or until the death of an owner. The donor can reap benefits of making the donation (since it’s irrevocable) while they are still alive.

These are just a few of the many amazing ways we have and continue to help clients with their charitable giving. Please reach out to us and let us know if you have any questions, concerns, or if you want us to take a deeper dive into your charitable strategies. We are please to be able to help you in doing good. It would be our pleasure to serve you. This is just one of the many value-adds that we give our Lily Wealth Management clients.

“Nothing else in all life is such a maker of joy and cheer as the privilege of doing good.”

- James Russell Miller


As always... We do not serve to replace your tax professional or accountant. We always advise that you speak with them before making any decisions. We would be happy to collaborate with them to help you meet your financial goals.

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