Ten Ways Your Clients Can Continue to Be Charitable in Challenging Economic Times:
Even during these tough economic times, many of your clients will still want to make charitable contributions before the end of the year. But they may want some advice about how to do it in ways that acknowledge the challenges they—and the community—face.
Here are ten tips you can use when counseling your clients on charitable giving:
- Focus on immediate needs. With reduced funding from public as well as private sources, many nonprofits that provide basic services—such as food, shelter, and healthcare—are experiencing large increases in demand for their services. So this might be a time to focus contributions, even if they’re less than in previous years, on organizations that support those most affected by the economic downturn.
- Give more strategically. This is also a time think about being more strategic—for example, focusing on groups that serve the most people, are the most efficient, etc. It could also mean giving larger gifts to fewer organizations in order to make a bigger impact, or not making end-of-year contributions to organizations with large reserves or endowments, since they may not need contributions now as much as others with tight budgets and increased demands.
- Give different assets. In place of securities, which people often give at year-end, your clients might consider giving unneeded life insurance policies or an interest in a privately held company.
- Take advantage of the IRA Rollover. The President recently signed into law a two-year extension of the IRA charitable rollover. This enables people 70 1/2 or older to transfer up to $100,000 annually from an IRA directly to a charity without counting those assets as income.
- Turn holiday gifts into charitable donations. We encourage people to think about making donations to charities instead of giving holiday gifts. The donations can be made in the name of the person who would have received a traditional gift.
- Take the long view. For clients who are giving less—or not at all—this year, use this time to have a discussion with them about revising their long-term philanthropic strategy and setting five-year goals.
- Think about leaving a legacy. Estate planning discussions will continue throughout the economic crisis. Many people will want to plan bequests. This can be an opportunity to educate clients about specific tax-advantaged strategies such as charitable remainder trusts and to generally address the legacy they’d like to leave in terms of charitable giving.
- Assess financial realities and charitable motivations. While the overall stock market and mutual-fund indexes are down, some companies are still making money. Look at who's doing well among your clients and help them make strategic charitable decisions. And whether or not someone feels they can “afford” to be charitable this year, some may want to practice what’s called "countercyclical philanthropy"—giving more when the needs are greatest.
- Think about other ways to give. Instead of, or in addition to, financial contributions, encourage your clients to consider other ways to help those in need. They could volunteer (there are lots of special opportunities around the holidays, and volunteer centers in every community); and many congregations and community organizations are aware of people with economic challenges, so if your client has a job to offer or can provide temporary housing, those are great ways to help. Think of it as sharing "time and talents" in addition to "treasures."
- Ask for help. Finally, the Community Foundation of Orange and Sullivanis always available to consult with you and/or your clients to offer advice on how to make charitable contributions that meet both charitable and financial goals. In good times and bad, we’re here to help people be as effective as possible in their charitable giving, and to make a difference in the community.
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Read more:
Ten Ways Your Clients Can Continue to be Charitable in Challenging Economic Times
CFOS Professional Advisors Council
Investment Strategies and Performance
Fees at CFOS
Ways to Give Now
Comparing Philanthropic Options
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