Tag: Thanksgiving

If gratitude drove your relationships, your calendar, and your bank account, what might happen? Gratitude flips the script in our lives.

Thanksgiving is a great time to ask this question, since the holiday focuses on gratitude and many people seek to give in meaningful ways, sharing their blessings with others. On top of giving thanks, it’s a good time to evaluate what causes to financially donate to. This impulse is often initiated by the many charities and non-profits who seek to gain support for the amazing work their organizations do, because not only is giving on people’s mind during the holidays, but tax-deductible donations are due by the end of the year.

How can you use this time of gratitude, increased awareness of needs, and tax benefits, to thoughtfully give and make a greater impact? The following principles can offer wisdom for intentional giving:

Let values be your guide

As you approach this Thanksgiving season, reflect on what you care about most deeply for your giving. What are the most important values for you and your family? What types of organizations align with those values? Whether it’s supporting education, healthcare, the arts, community engagement, or faith-based organizations, identifying your passions will make your giving more intentional and rewarding. Consider doing this together with your family or close friends:

• Hold a family conversation at a specified time – around the dinner table or during a holiday gathering to hear which causes resonate with each member.
• In addition to giving financially, is there an activity you could invite your family or neighbors to volunteer for over the holidays?

There are so many worthy causes and organizations that make an impact, so answering these questions will help narrow your focus and increase your engagement.

The beauty of saying “No”

A friend recently shared how they dreaded “giving season” because they received so many requests from organizations they donated to over the years. For people who are generous with their money and time, this can be a burden because we all have limits. Identifying your most important values helps to address this issue by first deciding what’s important.

When you’ve defined your values and priorities, you can more easily identify the causes you should say no to, not because it’s not a good cause, but because it’s not an area that fits at this time. Saying no to opportunities, while difficult, is an important step in the process of making wise decisions.

Another benefit to saying “no,” is one that I’ve experienced first-hand. Previously, as the Vice President of Advancement for a global non-profit, I worked closely with board members and donors who had significant opportunities to give charitably. We invested time and resources in building relationships with these individuals and couples to help them understand our mission and purpose, and also to learn what was important to them.

In that relationship, if someone knew that they probably weren’t going to partner with us because their values were aligned elsewhere, the most beneficial thing they could do is to tell us “No.” That answer enabled us to use our limited resources more wisely, and took a burden off them, because it wasn’t their highest value.

Free to say “yes”

Now comes the fun part, because by identifying your values and what doesn’t fit, you have more margin, mentally, financially and timewise to choose:

• Who to give to: What organizations match your values and passions? Who is effective and responsible in their stewardship of resources?
• How to engage with those organizations: Are there ways to contribute beyond finances? How would you want to use your skills and passions to benefit the organization and the community they serve?
• What level of giving is best for you and the organization: Is it time to stretch yourself? Is there a special need that compels you to give more?

Financial Savvy in giving

Now, “how” will you give? There are many avenues you can use to donate, and as you consider all the options, there may be some that are a better fit depending on the source of the funds you will use to donate. You should also consider if there are more tax-advantaged ways to donate. If there are opportunities that the government allows you to use, paying less taxes on those gifts allows you to have more resources to give if you so choose.

Some options to consider:

• Direct Donations: this is ideal for smaller, straightforward donations. Direct cash gifts are simple, tax-deductible, and can provide immediate support to charities.
• Donor-Advised Funds (DAFs): this is popular option for high net-worth individuals and households. DAFs allow you to contribute appreciated assets now (like stocks, ETF’s or mutual funds), avoid paying capital gains that would have been owed if the assets were sold, and make grants to charities over time from your DAF. With a DAF, you receive an immediate tax deduction for your contribution, but you can take your time deciding which organizations to support.

Strategies for using a DAF include donating assets on an annual basis or batching several years’ worth of donations in one calendar year to increase the benefit of itemizing your deductions in a given year.

• Qualified Charitable Distributions (QCDs): If you are over 70½, QCDs allow you to donate directly from your IRA to a qualified charity. Since the QCD is transferred from your IRA to the charity, you don’t have to pay taxes on those funds. In addition, if you are of the age where you have to make a required minimum distribution (RMD), your QCDs count toward your total RMD for that year.

There are several other strategies you can use to give more efficiently, depending on your circumstances. If you have questions on this aspect, discuss this with your advisor, or if you don’t currently have one, we’d be glad to schedule a consultation meeting with you to discuss these possibilities.

Regardless of how you decide to give this Thanksgiving and holiday season, investing a little time on the front-end can have a much greater impact for years to come, for those in need, the charities that serve, and for you, your family and friends.

To learn more about CapSouth Wealth Management, visit our website at CapSouthWM.com.  To learn more about how we help, click here.

Article by: Clay Cook, Associate Advisor

Investment advisory services are offered through CapSouth Partners, Inc, dba CapSouth Wealth Management, an independent registered Investment Advisory firm. CapSouth does not guarantee the accuracy or completeness of the information. CapSouth does not offer tax, accounting, or legal advice. Consult your tax or legal advisors for all issues that may have tax or legal consequences. This information has been prepared solely for informational purposes, is general in nature and is not intended as specific advice