Maximize Your Impact With a Charitable Trust

For people who want to maximize the impact of their charitable giving, a charitable trust may be a good option. But there are some things to keep in mind.

A trust is a separate legal entity that pays taxes and manages assets like any other legally recognized entity. It can provide a variety of financial benefits for you and your beneficiaries.

Be Deliberate About Where You Give

Many people want their donations and efforts to impact their giving back significantly. This is why it’s essential to deliberate about choosing the charities you support.

While there are many ways to donate time and money, charitable trusts and foundations are two of the most effective tools for managing long-term philanthropic goals. These legal entities can hold and manage assets, pay taxes, and require management like any other entity. A charitable trust can help you achieve your philanthropic goals while providing income for yourself or your beneficiaries during your lifetime or after death.

Trusts and foundations can offer several benefits, including privacy, tax-related advantages, and flexibility. However, it’s essential to choose the proper structure for your philanthropic goals and work with an experienced advisor.

We encourage you to contact us if you’re ready to maximize your impact with a charitable trust. A free tool matches you with vetted financial advisors in your area who can discuss your unique situation and recommend how to proceed. Get started now. Our service is free; you can interview advisor matches at your own pace. There’s no better way to find a qualified financial professional to help you reach your goals.

Make a Multi-Year Commitment

Suppose you’re interested in giving away a significant percentage of your assets while retaining income for yourself or designated beneficiaries over the years. In that case, consider a charitable trust. These can provide several tax benefits for donors.

A foundation can also be an effective vehicle for philanthropy. It’s essential to choose the proper structure for your goals and situation. If you need help determining which option is best for you, it’s a good idea to consult a financial advisor. A free tool matches you with vetted advisors who serve your area. You can interview your advisor game at no cost to decide if they fit you.

A foundation may have the flexibility to borrow assets for philanthropy purposes, such as program-related investments (PRIs). However, borrowed amounts repaid in the same year do not count as qualifying distributions for that year. This can create a cash flow issue for the foundation if the part is used for grantmaking. Because of this, pledging is recommended instead of an outright gift. Promises allow you to spread your facility and can still be counted toward MIT’s reunion giving campaign dollars. In addition, it provides more flexibility to accommodate your needs and goals. It can also help you to avoid costly taxes and fees.

Connect With the Organization’s Leadership

Most companies are eager to publicize their philanthropic efforts to demonstrate their corporate responsibility and care. But the more a company’s charitable investments align with its unique business strategy—enhancing competitive context, such as improving skills, technology, and infrastructure or increasing demand within a specialized market segment where it is most vital—the more disproportionately it will benefit from those efforts. Unfortunately, most corporations do not understand how to approach such strategic philanthropy. Foundations can be more helpful in this area but lack corporations’ internal resources and expertise. Thankfully, a growing number of companies are seeking to fill this gap.

Donate Often

There are a lot of great organizations that need your help. The key is to find ones that are a good fit for your business and have the resources to make a real impact. Also, keep up with how your donations may affect your taxes.

In addition to donating money, you can also consider volunteering your time. It’s a way to get involved in your community and allows you to meet people who share your values. For instance, if you are interested in helping animals, you can join a vegan activist group like the Humane League to push for higher animal welfare standards in the food industry. Or you can support a wildlife sanctuary or plant-based meat company to reduce the impact of global animal agriculture.

Lastly, beware of scammers who try to steal your information when you donate online. Always donate directly to a charity’s website or contact information rather than clicking on a link in an email or phone call. And if you give your credit card number to an unsolicited group or fundraising company, ask how they will use it and how much of the donation they will retain for their costs and overhead. Also, be wary of charities that solicit funds through robocalls, which must have the charity’s name on the caller ID and offer a number to call if you wish to opt out of future calls.

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