If you are a business owner who values giving back to charitable organizations, creating a business generosity plan is the path forward. Donating to charities may be meaningful to individuals who wish to establish a lasting family legacy of philanthropy. It also builds community support for businesses by collaborating with philanthropic organizations and provides additional benefits such as cost-effectiveness, tax deductions, and supplemental income.
To ensure your cash, securities, and assets are efficiently distributed to the philanthropic organizations you value the most according to your estate and/or legacy plan, it’s crucial to work with a professional resource. Consult an expert who will assess your finances and personal and professional goals, and your business exit, estate, and legacy plans as needed.
How to Start Developing a Generosity Plan
- Start a discussion with your family about your philanthropic values and interests: find out what giving back means for you, your business, and your family and what contributions you think will make a difference for the causes that interest you.
- Select charities that align with your business values. You can create a survey and have your employees vote to help you select a charity or charities they value.
- We will explore your generosity plan options based on your stipulations, preferences, exit strategy, and financial position and financial goals:
- Donor-advised funds (DAF) are low-to-no-cost charitable investments where you will donate cash, stocks, and other assets for a tax deduction. A DAF can start immediately.
- Private foundations take more time and money to start because of legal fees and requiring advisors to handle tax work. You’ll be required to file informational returns that are available to the public, making privacy limited.
- A bequest or estate plan gift involves designating cash, securities, or other assets in your estate plan to an organization of your choosing. You may also list an organization as a beneficiary.
- A charitable remainder trust (CRT) is an irrevocable trust with a partial tax deduction that generates income for beneficiaries to contribute to retirement, estate planning, and tax management. At the designated time or passing of the last beneficiary, the remaining assets go to the charities of your choice.
- Impact investing creates significant social and environmental change while also creating financial returns: this involves donating to nonprofits that combine charitable funds with investment capital to support initiatives not financially viable.
