By Debbie Wilkerson
While it seems like just yesterday we were cheering on the Royals as they embarked on an epic battle for the World Series crown, December has arrived. This month marks the peak of giving season, when many of us take some extra time to consider how we’ll give back.
For some of us, that “extra time” can be hard to come by, between holiday celebrations, visits with extended family and wrapping up business for the year. Additionally, heart-wrenching stories of need fill the air, and with so many worthy charities in need of donations, deciding where to make your year-end gifts can be overwhelming. For both individuals and businesses looking for an easy, efficient solution, charitable giving accounts—also known as donor-advised funds—can help with more strategic giving and at the same time offer maximum tax benefits.
Charitable Giving Accounts Make Giving Easy
Because charitable giving accounts are administered by public charities, gifts of cash, stock or other assets (such as real estate or closely held business interests) into these accounts are tax deductible. There is no distribution requirement, so donors can take their time researching where and when to give their charitable dollars. A donor can also leave a legacy of generosity by naming younger generations who can advise the fund after his or her lifetime.
The money in the account is invested, allowing the charitable dollars to grow tax-free over time. Some charitable giving accounts, including those at the Greater Kansas City Community Foundation, may be invested through financial advisers, who can invest in line with a donor’s risk tolerance and charitable giving goals.
Use Your Advisers as Resources for Your Giving
If you haven’t already discussed your charitable goals with your financial adviser, estate-planning attorney or accountant, you might be surprised to learn about the wealth of resources each can offer. Your financial adviser can invest your hard-earned dollars in line with your plans to make a large donation to your alma mater or favorite charity in the future. Your estate-planning attorney can suggest ways to leave a charitable legacy, so gifts to your church or synagogue may continue beyond your lifetime. And, your accountant can help you time your giving in a more tax-efficient manner.
There are many ways to give. Talk to your advisers about the different options, including outright gifts directly to charities, donor-advised funds and private foundations to see which one is right for you.
December is a busy month for all of us, but the holiday season is the perfect time to work with your advisers to reflect on past and present philanthropic goals, and, at least we’ve had a month to rest up after the Royals postseason!
Case Study: Royal Giving
Speaking of the Royals, I’d be remiss not to offer a short tribute to one of Kansas City’s most unique and historic gifts, Ewing Marion Kauffman’s charitable donation of the team to the Greater Kansas City Community Foundation. Just before his passing in 1994, with no potential buyer at hand, Mr. Kauffman feared the team would be purchased by someone who might be interested in moving the Royals to a larger market.
In order to ensure the team remained in Kansas City, Mr. Kauffman, with the help of many of his trusted advisers, donated the Royals to the Community Foundation. Fulfilling Mr. Kauffman’s outside-the-box charitable goals took an unprecedented effort from brilliant legal and charitable minds and our generous local business community. But thanks to his thoughtful approach to giving, local charities in Kansas City benefited for many years, and we can still cheer on the Royals in his namesake stadium today.
While it’s unlikely any of us will need to make a charitable donation of a major-league sports franchise, after 20 years, Mr. Kauffman’s bold generosity continues to serve as an example of the power of charitable giving, and we can all be inspired to make the most of our charitable donations, whether we’re in the midst of celebrating the holidays,
a pennant or opening day.
Debbie Wilkerson is president & CEO of the Greater Kansas City Community Foundation