Plan Performance Direct

THE Wealthier + Wiser Blog

Helping you better understand your money so you can reach your goals

The importance of charitable giving and how to do it right

The holiday season is a time of giving, so today I want to share a quick message about the importance of charitable giving and how to do it right. Joining me is Heather Allen from Halo Animal Rescue to talk about her charity and how it works. 

We’re big fans of giving to charity, but there’s also an income tax deduction you can take advantage of if you do so—the kind of deduction you get up front in year one. If you donate property or something that has a big capital gain to it, you don’t have to pay capital gains tax. If you have an estate tax or an alternative minimum tax, donating to charity can reduce these also. 

Charities thrive off of small donations, and according to the year-over-year data, charity donations increased by a little over 1% in 2019. This is good news, but that increase only pertains to large donations. Smaller donations, such as those under $250 or from $250 to $1,000, decreased by about 4%. This is why it’s important to support local organizations and charities; they help make our communities the best place they can possibly be.

Don’t miss: Staying proactive with your finances

Tax laws have changed, and now everyone has a bigger standard income tax deduction. You used to be able to deduct from small donations, but not anymore. This is why you should consider what we call “bunching,” which means giving several years’ worth of contributions up front. For example, if you were going to give $250 per year over four years, give $1,000 now instead. 

One of the ways you can do this is by using a donor-advised fund, which is an investment account you can use to contribute different kinds of stocks, bonds, or real assets (real estate, art, jewelry, etc.) to charitable institutions and receive your deduction. If the account grows over time, you can invest more and donate more. If you use a bank like Schwab, they have thousands of charities you can choose from.

It’s important to support local organizations and charities; they help make our communities the best place they can possibly be.


Speaking of that, Halo Animal Rescue was started 25 years ago by Heather’s mother, and they’ve helped over 70,000 animals in their time. Their average cost to care for one animal is about $628, and their average adoption fee is $200, so there’s a big gap that needs to be filled, and your donations make all the difference. 

To show our support for Halo Animal Rescue, we’ll double any contribution you send to them (with a limit of $1,000) for the next week. If you make a contribution, all you have to do is let them know that you saw this video, and we’ll double it. Additionally, we’ll make a donation each time a pet is adopted between now and the end of the year, and we’ll pay half of the adoption fee. 

If you have any more questions about this initiative, your specific tax situation, or whether a donor-advised fund is right for you, give us a call and we’d be happy to help you.

Are you looking for an Arizona wealth management firm to provide personalized investment management? If so, contact the wealth advisors at Henry+Horne Wealth Management.

 

Michael Carlin, AIF®