Giving: Different ways to show you care

Ways to give

As the holidays quickly approach, gift-giving comes to the forefront of our minds.  For many, it’s a time to reflect on our good fortune and to thank all the people and organizations who’ve helped improve our lives; our communities.  But, how we give is as varied as to whom we give.  As is, I’ve tried to gather (below) a more comprehensive list of ways we can give.   

Your money    

Donor Advised Funds (DAF)

Donor Advised Funds (DAF) have become increasingly popular with the passage of the Tax Cuts and Jobs Act of 2017, which almost doubled standard deductions for single filers (from $6,500 to $12,000) and joint filers (from $12,000 to $24,000).  Now, for many people, it’s less attractive to itemize tax deductions versus taking the standard deductions.  Under this new tax reality, a DAF offers you the ability to deduct contributions now and the flexibility to donate assets  to whomever, whenever and however you want later, including anonymously and in memoriam.  Additionally, you can put various assets into a DAF: cash, stocks, real estate, art work, private business interests, and certain private company stock (restricted, controlled or lock up).  Moreover, DAF assets grow tax –free.    

Technically, a DAF is available to anyone.  However, it’s most financially appropriate if:  a)  you’ve had a banner (income) year via earnings, stock options, inheritance, etc, and are looking for ways to limit your income tax while bettering the world b) you can contribute an amount (usually a lump sum) that’s higher than your standard deductions.  

DAF assets are managed by your chosen administrators (e.g., Vanguard, Fidelity).  Consequently, there are  drawbacks:

·       You lose a certain degree of control over the management and distribution of assets as well as the intended recipients.  For example, you can only donate to 501(c)(3) organizations.  However, keep in mind that many large administrators offer a wide enough selection of investments, distribution methods, and qualified charities that you still have a good deal of opportunities to provide input/guidance with respect to your contributions.  

·       There’s an administrative fee on top of investment fees.  (Administrative Fees for Donor Advised Funds) 

Qualified Charitable Distribution (QCD)

While a QCD doesn’t have the flexibility of a DAF, it can be a great way to contribute for those of you who have the “right” profile:  have a traditional (or rollover) IRA; must take Required Minimum Distribution (RMD) as a result of being over 70 ½ years old; doesn’t need the money; want to contribute assets directly to charities; want a tax break for contributions. 

Here are the key benefits of a QCD:

·       It enables you to satisfy your RMD.  

·       It enables you to give to charity pre-tax dollars, which is a greater amount than post-tax dollars.

·       It allows you to avoid paying additional income tax on distributions as they (distributions) are not recognized as income.

Here are the key drawbacks to a QCD:

·       It can only be done with/through a traditional or rollover IRA.

·       Contributions (or distributions) are not tax deductible as this would give donors a double tax benefit: one for not having to declare distributions as income and the other for deducting distribution as charitable contributions.

·       Distributions can only be made to public charities (or 501(c)(3) organizations) and house of worship.

Your time

We live in a world that seems to value time and, at the same time, devalue time. We seemingly value time through the hours that we devote to our work.  However, we seem to devalue time by how we spend it in our off hours.  Interestingly, one could argue the inverse of this, and it could still be true.  However, since none of us truly knows how much time we have left in this lifetime regardless of where we are in our lives, time (in essence) is always a precious, ongoing gift.  Unfortunately, many of us don’t fully comprehend the value of time until later in life when it becomes more apparent that we are running out of time; it’s a finite resource just like money and health.  Rather than wait until we have less time (or supposedly more time, depending how you look at it), it may be better to wake up to the reality that time is a gift and one of our greatest tasks is to figure out how and on whom best to spend it.   How and on whom you spend your time shapes who you become.  Choose wisely!           

Your presence 

As with time, I think many of us have a tendency to discount the value of being present.  I began to fully grasp the importance of being present when my nieces came into the world, one 6 years ago and the other 3 years ago.  Children, like animals, have a natural tendency to live in the present.  As my nieces grew into toddlers, I made more efforts to play with them.  (They were less “physically fragile” now.)   While doing so, however, I started to notice my tendency to mentally “drift,” because it was exhausting trying to be completely engaged with them all the time.  Being more grounded in the present moment, my nieces often would pick up on when I’m not fully “there.”  So, they’d make efforts to reengage me by asking me to do this or that for whatever game we were playing.    

Through poor conditioning, I’ve lost my natural tendency to be present and so now have to retrain myself.  I see this as an ongoing challenge.  However, the more I try to practice being present, the more I’ve come to realize that only when I’m “here” can I truly hear others.  This, in turn, helps make them feel heard, seen and hopefully valued.  Moreover, only by being present can I make the most of my time.     

 

As you reflect on what, whom and when to give this holiday season, I hope you remember one of the universal truths around giving: When you give, you also get.  So, choose mindfully, wisely and with an open heart.  However, regardless of how you give,  I thank you for sharing your light. 

 

Resources:

·       Administrative Fees for Donor Advised Funds

·       Five Questions to Ask When Choosing a Donor Advised Fund

·       RMD Calculator

·       Best Charities

·       Dhamma Kungja (Vipassana Meditation)