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Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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Charitable Giving: It's Better to Give and Receive

Charitable giving allows investors to support worthy causes, while saving on taxes. Learn how to give and receive?

| BY Adriana Reyneri

Charitable giving in the final weeks of the year can be a win-win for charities and investors. Year-end gifts enable most charities to stay in the black and they can also help investors seeking tax breaks.

 Charities receive on average 41 percent of their annual contributions during the holiday season, but the share is as high as 100 percent, according to a recent survey of 101 charities and 565 donors by Charity Navigator, which ranks charitable organizations.

 “Year-end is a time when we think about giving, and that includes giving back to the community by donating to our favorite charities,” said Rande Spiegelman, vice president for financial planning at the Schwab Center for Financial Research. “While it may be better to give than to receive, with proper planning it’s possible to do both at the same time as you share your good fortune with others.”

 Philanthropy plays role in the financial strategies of most wealthy investors, according to Millionaire Corner research. In a December survey, 98 percent of investors with $5 million to $25 million reported giving to charity. The average total was just over $13,200 a year with more than two-thirds of the ultra wealth giving $5,000 or more in 2010.

 The majority of participants in this year’s Charity Navigator study said they expect levels of giving to match those of last year, while about one-fourth expect giving to be greater and less than 20 percent expect it to be lower. The economic downturn was the reason most cited by participants who expect giving to decline. Donors appear most likely to give to charities such as homeless shelters and food banks (62 percent), and least likely to give to charities supporting the Arts, Culture or Humanities (27 percent).

 The trend is both seasonal and cyclical, said Charity Navigator. The religious overtones of the holiday season promote giving to human service charities, said the organization in a prepared statement. Strengthening that inclination is the recession, which has redirected donors toward nonprofits helping the needy and away from cultural groups.

 Investors motivated to give to charity can maximize the tax benefits of giving by researching IRS rules for charitable deductions or consulting a tax professional. Tax treatment of gifts is complicated and, among other things, varies by the type of donation made. Cash donations are generally fully deductible, said Schwab’s Spiegelman, though donors need to keep records verifying the gift. A cancelled check or receipt from a qualified charity is usually sufficient.

 Non-cash donations, such as used clothing, jewelry or cards, may not be fully deductible, and the IRS typically requires an appraisal for in-kind donations valued at more than $5,000. The full fair value of donated stocks, bonds and mutual funds held for more than one year can usually be deducted, though the tax implications of donating long-term investments are different for investments showing gains and losses.

 Investors wishing to get a tax break for their charitable giving must donate to an IRS-qualified organization and must itemize their donations using form 1040A. Investors may not deduct charitable donations to civic groups, such as the local chamber of commerce and most foreign organizations, though certain Canadian, Israeli and Mexican charities are qualified, according to IRS rules. Payments to an individual are never deductible; lobbying groups are not qualified charities; and membership dues, tuition and homeowner association fees do not count as charitable contributions.