Charitable Giving

Charitable Giving and Estate Planning

Including charitable giving strategies within your estate plan can be an effective way for you and your family to enjoy an income stream during your lives, earn tax savings, and maintain a significant degree of control over assets.

Donor-advised funds are one of many options. A donor-advised fund is a tax-advantaged charitable giving vehicle that offers maximum flexibility to take tax deductions and recommend grants to charitable organizations. By definition, donor-advised funds are public charities under Section 501(c)(3) of the Internal Revenue Code, and contributions to such funds are tax deductible.

Donor-advised funds are particularly family-friendly, as parents and children can consolidate their giving activities through a single fund account. In addition, children can be named as successors to a fund, ensuring the continuation of a family’s giving legacy.

Another significant advantage of a donor-advised fund is its capacity to accept any one of a variety of assets as a charitable contribution. Checks/wire transfers, commercial paper, mutual fund shares, securities, bonds, and restricted stocks all are acceptable assets. In addition, the account has the potential to grow over time, increasing the donor’s giving power.

By |2019-08-14T14:00:17-07:00August 1st, 2012|Charitable Giving, Estate Planning|

Gifting: a win-win proposition

Did you know that there’s a wealth-transfer technique you can use to reduce your taxable estate and keep more of your assets for your heirs? You can make annual gifts of up to $13,000 ($26,000 per married couple) to as many people as you wish without incurring federal gift taxes.

An example: A married couple with three children could reduce their estate by $78,000 each year if $26,000 were given to each of their children.

Gifting can be used in a number of unique ways. You can use annual gifts to help build a college fund for a child, grandchild, relative or even a friend — by contributing to a 529 plan account, a Coverdell Education Savings Account, or a UGMA/UGTA account. In fact, 529 plans have special rules that allow you to make five years’ worth of contributions in one year without incurring any gift taxes — that’s $65,000 for individuals and $130,000 for married couples.

Gifts can also be used to build wealth for future generations, as well as help a child, relative or friend fund a down payment on a home, buy a car or start a business. Your financial advisor can help you determine how annual gifts might fit into your overall financial plan.

Portions of this article were provided through the Financial Planning Association, the membership organization for the financial planning community (through McGraw-Hill Financial Communications), and is brought to you by Perspective Financial Services, a local member of FPA.

Decide Where Your Arizona Tax Dollars are Spent


While no one likes paying taxes, it can be more palatable when you can designate where the money goes. Arizona offers a number of dollar-for-dollar credits you can take on your income-tax return. In other words, you get to decide where your Arizona tax dollars are spent.

It doesn’t matter if you owe money or get a refund; but you must have Arizona taxes to offset the credits. If you’re married and think your tax bill to Arizona will be $2,200 for the year, for example, here’s a way to designate how all of it will be spent.

  1. Public schools. You can donate up to $400 ($200 for singles) to any public or charter school in Arizona for after-school activities. These must be received by the end of the year.
  2. Private school tuition organizations. Give up to $1,000 ($500 single) to a tuition organization that awards scholarships for children in Arizona private schools. Donations can be made up to April 15 of the next year.
  3. Working poor. Donate up to $400 ($200 single) to any Arizona-registered charity that helps the poor (organization must be approved by the Department of Revenue). You must also itemize your deductions on your Arizona form to claim this credit and the charity must receive your money by December 31.
  4. Military family relief. You can contribute $400 ($200 single) to benefit Arizona service members and their families. The assistance goes to those who are deployed or to the families of those injured or killed. The credit is capped at $1 million annually so it’s important to get this money in as early as possible. Any money received after $1 million is reached (usually sometime in December) is returned.
Your Arizona Tax Dollars

Written by Andrew Mark, CPA for Perspective Financial Services

Click here for the most up-to-date information on the Arizona Department of Revenue website. As with all tax advice you should seek confirmation from your own advisor that this will work for you.


By |2019-10-15T12:13:23-07:00November 9th, 2011|Charitable Giving, Taxes|

Develop a Plan for Charitable Giving

The earthquake that hit Haiti last week prompted a flurry of charitable donations that vastly exceeded the amount raised for previous international catastrophes, according to The Chronicle of Philanthropy. Within a week, more than $150 million had been contributed to major U.S. relief groups.

It’s a shining testament to the generosity of Americans to give so much, especially in light of the financial strain many have endured themselves during the recent economic downturn and sluggish recovery. Historically, Americans give generously, in good times and in bad. A survey by Johns Hopkins Comparative Nonprofit Sector Project reported that three out of every four Americans give to charity, including families with household incomes of less than $10,000. Collectively, Americans give more than $210 billion to charitable organizations each year, according to the American Association of Fundraising Counsel.

Although many families and individuals give generously, however, the vast majority doesn’t give in a planned way. Most employ a charitable-giving strategy often referred to as checkbook philanthropy. This really isn’t a strategy, but rather the unplanned giving of small amounts to a variety of charities, commonly in cash and often in reaction to disasters such as the Haiti earthquake.

Yet, those who plan their charitable giving enjoy many tangible benefits, in addition to the satisfaction of assisting the charity of their choice.

Develop a Plan for Charitable Giving

Planned giving is an organized approach that evaluates your personal values, selects charitable organizations and gift-giving vehicles that best reflect those values, and maximizes the financial and tax benefits of the gifts.

Our reasons for giving to charity are as individual as we are: Many contribute out of a desire to give something back to communities or organizations that have helped them in the past, such as an alma mater, a youth organization or a hospice. Some give because of personally held values, principles or religious convictions, or to create a legacy that will last long into the future. Still others hope to provide life-saving support to others when disaster strikes.

According to the authors of Giving: Philanthropy for Everyone (published by Denver-based Quantum Press), making planned charitable gifts during your lifetime can increase the value of your estate to pass to your heirs, can convert non-income-producing assets into an income stream for you, and can delay capital gains taxes on the sale of highly appreciated property. It can also help you achieve specific education, business and family goals.

Before you can develop a charitable giving plan, you must first understand the extent of your financial resources. This is realized through a detailed analysis of your current situation, as well as development of a retirement plan. The easiest way to accomplish this is to schedule some time with a fee-only financial advisor who will help you review your net worth and cash flow statements to determine the resources available to you.

Winston Churchill so eloquently said that we make a living by what we get, and we make a life by what we give. By creating a thoughtful charitable giving plan, we can all enjoy the benefits of making both a fine living and a rewarding life.

By |2019-08-14T14:00:30-07:00January 19th, 2010|Charitable Giving|

Who Gives? Young Millionaires Lead in Philanthropy

A recent survey showed that Generation X millionaires (those ages 28 to 42) are the most generous among their peers. Of course, high-net-worth individuals are not the only ones who contribute to charities. Many Americans give generously, and the amount they give has increased dramatically in recent years.

Regardless of their net worth or their motivations to give, the vast majority of people do not give in a planned way. Planned giving, on the other hand, is an organized approach that evaluates one’s personal values, selects charitable organizations and gift-giving vehicles that best reflect those values, and maximizes the financial and tax benefits of the gifts.

Read Mike McCann’s article, “Who Gives? Young Millionaires Lead in Philanthropy,” in Round-up, the official magazine of the Maricopa County Medical Society. Read More

By |2019-08-14T14:00:35-07:00November 20th, 2008|Charitable Giving|