Planned giving allows you to combine your charitable goals and values with your personal financial strategies. Working with a professional to include philanthropy in your financial objectives can help you develop an approach to giving that’s right for your family and your personal values.

We developed this special report to help you understand how philanthropic planning can help you create a stronger legacy and increase the impact of your giving.

Planned giving benefits both donors and the charitable organizations they choose to support. Today’s world is complex and many important issues require informed solutions to address. Planning your giving allows you to educate yourself about causes and issues and develop relationships to ensure that your gifts make the greatest impact on the problem you’re trying to address. 

 

Charities can plan more efficiently and fulfill their missions more effectively when they can be secure in their funding sources.

Charity Navigator, an independent charity evaluator that rates nonprofits based on financial transparency and accountability, has found that most highly successful charities spend as little as possible on fundraising and marketing activities. By establishing a long-term relationship with a charity, you can help reduce the amount of time, money, and energy required to raise funds and help them get back to supporting the cause. Establishing a relationship with a charity can also help you influence their mission and motivate them to achieve goals in order to receive more funding.

Philanthropic planning can work effectively as part of an overall financial strategy because it allows you, the donor, to set goals for your giving. When donors only give in response to solicitations from charities, they allow others to determine how and when money is given. If you were to review your past gifts, what pattern would emerge? Has your gifting been intentional and driven by your passions and values? Or has it been largely motivated by external solicitations from friends, family, and charities?

Planning your charitable activities also helps you ensure that your money is being used as you intended and that your gifts make the most impact. The planning process also helps you take a proactive approach to charitable work by allowing you to do the due diligence needed to understand a cause or problem, and identify the major organizations committed to making a difference. By developing an informed understanding of the issues, you can take control of your financial relationship with organizations and become strategic partner as well as a financial contributor.

Including charitable giving as part of your overall financial objectives can also potentially reduce your tax burden. While most people give to charity for non-financial reasons, it’s important not to ignore the potential tax benefits. By thinking proactively, it may be possible to identify tax-efficient strategies that are able to increase the amount of money you make available for your philanthropic goals.

A personal or family mission statement can help you define your family’s core values and clarify your philanthropic goals. Attached to this report is a worksheet that will help you and your family explore your personal values and connect them to the charitable causes that are close to your heart. We recommend that you complete the worksheet together and bring it when you meet with your financial professional.

Philanthropy doesn’t have to be all about money. Many retirees make valuable contributions of time to support the causes they love. The benefits of volunteering can be manifold: increased wellbeing, new relationships, community engagement, and the joy of knowing that you have made a difference in the world.

Many Americans are becoming savvier about their giving and want to know that their donations are making a difference. One of the ways in which organizations are judged is by their financial efficiency. According to Charity Navigator, highly ranked nonprofits spend an average of 65% or more of their annual budget on program expenses (actually delivering on their mission), less than 15% on administrative expenses, and less than 10% on fundraising expenses. While individual organizations may certainly deviate from these norms for very good reasons, make sure you understand how every dollar you donate is being used. As a donor, you should encourage transparency in organizations by asking them to make their financial statements publicly available.