Four Ways to Take Care of a Charity - And Yourself!

There’s nothing that says you can’t do good in the world and do well for yourself. You may even be able to reduce your taxes, secure and income for yourself or your beneficiaries, and help a charity or -  several charities -  of your choosing. Although there are many ways to accomplish your philanthropic and financial goals, today we will focus on four smart strategies.

The first strategy is that of a Donor Advised Fund or DAF. A DAF has several advantages, including:

  • There is generally a low initial minimum to open an account (usually $5,000-$10,000)
  • There are generally low ongoing maintenance and administrative expenses
  • There are no annual distribution requirements
  • There are no annual tax filing requirements
  • Gifts can be made publicly or anonymously
  • There are higher charitable deduction limits relative to private foundations – which we will cover in just a moment!

But, there are also some disadvantages. Specifically:

  • Some donor advised funds do not allow the donor to name successors
  • These funds do not allow compensation for board members or staff
  • Donor advised funds don’t allow for establishing scholarship programs

The second strategy is a private foundation. The advantages of a private foundation are:

  • The donor retains complete control of the foundation
  • The donor can engage family members to emphasize core family values and/or legacy
  • The donor can pay reasonable compensation to board members and/or staff
  • The foundation can be perpetual by naming successors or a board

And so the private foundation option allows for a little more flexibility in terms of charitable giving, and by giving you and your family more input and control. But there are also some disadvantages, as well as some added costs. For example:

  • There’s going to be a higher initial funding amount. There’s really no official minimum, but we generally recommend funding with at least $2MM-$3MM
  • There are also higher initial start-up costs, potentially as much as $10,000
  • Unlike a DAF, there is an annual distribution requirement of 5%
  • There are also annual reporting requirements – an IRS form called the 990 – and these documents are publically available, so anyone can see how you are spending the money
  • There is a lower charitable deduction for gifted assets, when compared to a DAF

The final two options come in the form of a Charitable Lead Trust, or Charitable Remainder Trust. A Charitable Lead Trust is intended to reduce your (or any beneficiaries') taxable income by first donating a portion of the trust's income to a charity or several charities. After a period of time specified by the trust, the remainder of the trust would be transferred to you, a family member, or other beneficiary. A Charitable Remainder Trust is similar, but in reverse: a tax-exempt irrevocable trust is intended to reduce your taxable income by first dispersing income to you or the beneficiaries of your trust for a specified period of time and then donating the remainder of the trust to a designated charity or charities.

So, as you can see, there are many ways to take care of yourself, your family, and your beneficiaries that can also help you support a charity of your choosing. We’re currently offering a no-obligation charitable giving analysis for any of our readers, and we’re happy to discuss how to get the most out of your charitable giving, and how to possibly reduce taxes and create additional income for you and your family. You can schedule your complimentary analysis by calling us at 216.520.1711, emailing us at Quarterback@Lineweaver.net, or clicking here.

/ Print
Posted by Lineweaver Financial Group in Charity, Donor Advised Fund, Private Foundation Charitable Lead Trust, Charitable Remainder Trust, Tax Planning

Comments


Be the first to comment
Name*
E-mail*
Website
Comment*
0 Pending Comments
 Keep me updated of follow-up comments!
Most Recent

By Lineweaver Financial Group
November 09, 2017 Category • Introducing, Kids, Grand Kids, Investing, Lineweaver

Introducing Kids (and Grandkids!) to Investing Setting the stage As your kids learn more about managing their money, introduce the concept of investing. Its a great way to reinforce the ideas of goal setting, saving, and budgeting. It can help put them on a long-term path to financial independence. Keep it simple When kids are in elementary or middle school, its a good idea to teach kids to put money away in three buckets: save, spend and share. As they get a little older, say into high school, you can get a little more sophisticated in how you approach investing. Start by explaining that investing is a means of using your money to try to create more money. This usually starts to make more sense for kids when they start to work and they can finally realize how hard they have to work to pay for something, especially after Uncle Sam takes his fair share. Make it real You can start your investing conversation by having a family meeting. You should explain that your intention is to

By Lineweaver Financial Group
November 03, 2017 Category • Tax, Tax Cuts And Job Act, Tax Law

We know that many people are curious about the tax bill announced in the House of Representatives yesterday, H.R.1: The Tax Cut and Jobs Act. Weve put together a balanced review of the bill, and wanted to share it in a timely way. The proposed bill: Condenses individual tax rates to Zero, 12%, 25%, 35%, and 39.6%. Increases the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. Establishes a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses. Preserves the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support. Preserves the Earned Income Tax Credit to provide tax relief for low-income individuals and families. Streamlines

By Lineweaver Financial Group
October 26, 2017 Category • Market Commentary, Market Review, Third Quarter, 2017

Click below to join President and Founder Jim Lineweaver for his 3rd quarter market commentary. If you have questions about your portfolio, were here to help. You can contact us at 216.520.1711, email us atQuarterback@Lineweaver.net, or simply click here.

Categories
Newsletter (25)Retirement Planning (14)Retirement (10)Financial Planning (10)Tax (7)Letter From The President (7)Market Commentary (7)Lineweaver (7)Education Programs (6)Economic Commentary (6)General (5)Tax Planning (4)Q3 (3)Social Security (3)2017 (3)Healthwatch (3)LFG (3)Brexit Update (2)2016 (2)Diversification (2)Market (2)High Income (2)Market Review (2)Bonds (2)Tax Scams (2)IRA (2)Social Security Benefits (2)Financial Strategies (2)Interest Rates (2)Kids (1)Self Employed (1)Grand Kids (1)Retiring (1)Introducing (1)Tax Law (1) (1)Legacy (1)Tax Cuts And Job Act (1)Retire (1)Winter 2017 (1)Market Update (1)2016 Market (1)Client Spotlight (1)Q1 2017 Newsletter (1)Business Owners (1)Investing (1)Retire Early (1)Real Estate (1)Policy (1)1st Quarter (1)Trump (1)FInance (1)Charity (1)Private Foundation Charitable Lead Trust (1)Donor Advised Fund (1)Growing Your Wealth (1)Bonds Ladder (1)Stocks (1)401(k) (1)Rising Interest Rates (1)Charitable Remainder Trust (1)Annuity (1)Annuities (1)Dividend (1)Life Insurance (1)Annuity Alternatives (1)REITs (1)Third Quarter (1)Service Day (1)Estate Planning (1)Women And Money (1)Harvest For Hunger (1)Gifting (1)2017 Q4 (1)Mark Sipos (1)Equifax (1)Charitable Contributions (1)Social Security Planning (1)Retirement Tips (1)Statements (1)Roth (1)Mutual Funds (1)Expense (1)Financial Advisor (1)Financial Advice (1)Costs (1)Insurance (1)Risk Management (1)Candidates (1)Election (1)Identity Theft (1)Politics (1)Fall 2016 (1)Stockpile (1)Holiday Planning (1)Financial Health (1)Fraud (1)Taxes (1)Finance (1)Financial (1)Protection (1)Coordination (1)North Korea (1)Lineweaver Wealth Advisors (1)Conflict (1)Holiday Gifts (1) + Show More