Giving From Your Heart & Head

The season of gratefulness and generosity is upon us.  Do you want to do your financial gift-giving with an intention for optimal impact?  Motivations around giving are very personal.  Your financial generosity combined with relational resolve makes change POSSIBLE.

P – Passion for a cause or concern

O – Opportunity to change lives

S – Simplicity “I have enough and giving helps simplify my life”

S – Satisfaction “It gives me great joy to give of my resources”

I – Impact “I want to make a big difference”

B – Beliefs “I want to live in alignment with my religious or spiritual beliefs”

L – Love – “I love my family and want to express it financially”

E – Equity “I want to share what I have with the world”

To optimize your giving outcomes, you want to search your heart and scrutinize your thoughts.  Sad to say, financial giving can do more harm than good.  Whether you give to family members, or to non-profit organizations, take time to do some homework.  There are a variety of options to choose from.

Here are four questions to ask yourself before you decide how much and what kind of financial gift to give loved ones.

What type of life opportunities or difficulties do you want to address?

Is a family member going to school or starting a business venture that you want to invest in?  Are there health complications that you can assist with?  Discern between a financial lifeline or umbilical cord.  Caution abounds if you answer this one with “I want my kids to have it easier than I did”; or “they have become accustomed to a standard of living, so they need my support.”

What will truly be helpful and not hurtful or enabling?

You want to foster a mindset of empowerment, a “hand up” to the gift recipient.  In the words of Warren Buffet “give them enough so they can do anything, but not enough so they can do nothing”.

Too many times, financial gifts create an “entitlement” mindset.  This is dangerous territory as self-worth is confused with net-worth and future expectations become entrenched. A financial gift can be seen as “found money”, and treated differently (more readily spent thoughtlessly) than money that was earned through personal efforts.

How do you love family members equally, yet treat them uniquely given their circumstances? 

You may have one family member who has chosen a financially lucrative field; whereas another equally diligent and hardworking member chose a less profitable career.  Would different financial gifts be appropriate? How do you communicate your decisions?

How will you communicate, but not dictate what your hopes are for them in receiving or participating in this gift? 

Financial gifts are profound opportunities to create the ties that bind families together.  Unwittingly though, they can also tear families apart.  How will you feel or react if a gift is not used in the way you wanted?  Are you OK letting them experience failure and the ensuing learning experience?  A tough question – Is this gift about them, or about you?

This time of year, I open my e-mail and post box to a pile of local and international appeals for end of year contributions. I watched a documentary several years ago “Poverty, Inc.” and it got me thinking about charitable giving and social justice philanthropy in new ways.  I really want to make sure my dollars are helping, not hurting.  The Latin root of charity is “caritas” – love for all.  Charity is intrinsically, foundationally relational not monetary. You can’t truly be charitable simply by writing a check.

Here are 3 questions to ask when deciding which community charities to give to.

  1. Is there a way to get personally involved with this organization above and beyond a financial contribution?
  2. Is the organization’s leadership rooted in the community and developing fruitful relationships?
  3. Are you willing to make a long-term commitment to this organization?

There is deep joy found in being generous.  At Wealth By Design, it is our honor and privilege to walk alongside you to discern your intentions, then optimize the financial tools you use to facilitate your giving plan. A few ideas and strategies we facilitate in giving to family members – appreciated stock if they are in a lower tax bracket. Using tools like 529 plans have unique opportunities and benefits. With the organizations you care about – Donor Advised Funds, Charitable Remainder or Lead Trusts, Beneficiary designations, Qualified Charitable Distributions, donating appreciated stock holdings or complex gift-giving are all powerful tools above and beyond writing a check.  There are a variety of options including taxation benefits, tax-efficient income streams, and family legacy planning components that will leverage your giving for maximum impact.

With financial giving, the stakes are high.  Emotional implications and tax ramifications are just a couple of the factors to be considered.  It will mean more to you and to the receiver if you take the time and get input from your trusted advisors to make the most out of your heartfelt, deliberate gift this holiday season.  Call us to unwrap the joy of generosity!

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