Women & Wealth: Charitable Giving

Charitable giving continues to grow as an active component of people’s lives and finances, especially for women. With the rise of female leaders in North America, we are seeing an increase in recognized female philanthropy. Having a strategy in place is important to make the most of your charitable giving and financial planning.

According to Michelle Long, Senior Lead Financial Planner, women tend to be very intentional with who, what and when to give, creating an identity surrounding their philanthropic goals. Although there are many ways to be actively engaged with charities, Michelle has found that many of her clients have a goal of giving financially in the most efficient way possible.

Oftentimes, when we think about donations, we think about writing a check or giving cash. In her recent interview on WGN Radio, Michelle offers another option to consider when giving financially. Donating appreciated stock allows you to give in a tax-efficient way, since you will avoid paying capital gains tax. This can be a great option to meet your philanthropic goals and maintain efficiency with your finances.

In addition to thinking about what assets you can donate, it’s important to plan how you donate those assets. Michelle talks about using a specific charitable vehicle called a donor-advised fund (DAF). This is an account you can set up through a third party, with the sole purpose of managing charitable donations on your behalf. As the donor, you can recommend how to invest the assets and where to donate them, as long as you choose a charity that is recognized as a U.S. charitable organization.

One of the main benefits of setting up a DAF is the donor can claim a tax deduction in the year the assets are contributed, rather than the year the assets go to charity. Michelle explains this tax deduction with the following example:

• If you normally donate $10,000 a year to a charity, you could contribute $50,000 into the DAF, and potentially take the deduction for the $50,000 this year, while still stretching out the donation to the charity over five years.

Whatever your philanthropic goals may be, it’s important to understand what your options are. This will help make the most of your charitable giving, for your cause and your financial plan.

To contact Michelle Long at Associated Bank, call 312-544-4343 or email her at Michelle.Long@AssociatedBank.com.