We’ve always been a generous society; even more so this time of year. Consider the power of a planned giving program before you start writing checks to your favorite causes.
- Americans have always been an extraordinarily generous people, especially at year-end–we gave $223 billion to charitable causes last year.
- One out of three successful Americans has a planned giving program.
- Planned giving programs take many forms with charitable remainder trusts, foundations and donor advised funds among the most popular.
Tomorrow is Thanksgiving and it made me think about gratitude and how Americans have always been a very grateful, giving and charitable people. Alexis de Tocqueville, a Frenchman who came to the United States back in 1831, observed in his book, Democracy in America that “Americans of ages, conditions, and dispositions constantly unite to hold fetes, found seminaries, build inns, construct churches and distribute books.” He wrote further that he frequently admired the skill with which “the inhabitants of the United States manage to set a common aim to the efforts of a great number of men and to persuade them to pursue it voluntarily.”
As far back as 1917 the U.S. tax code added a provision for having a deduction for individual contributions to charities. Then in 1918, the state tax deduction was established for charities.
We’ve always had a culture of giving both monetarily and in terms of our time. We not only gave $223 billion to charitable causes individually in 2012, but countless hours of support. Just look at what happened after 9/11, Hurricane Katrina or last year’s super-super storm Sandy. Americans came out in droves, to help out those affected by these tragedies. As Alexis de Tocqueville said, “It’s uniquely American.”
So at this time of year, when you’re typically writing checks for your favorite charities, keep in mind that one out of three successful Americans has a planned-giving program in place.
Planned giving programs
As some of you may know, planned-giving programs come in many forms, but are typically structured as charitable remainder trusts, foundations or donor-advised funds. And, they can be very helpful for making philanthropy a consistent part of your life throughout the entire year.
Now, if considering a planned giving program or other way to utilize the tax code for your charitable purposes, you should go and talk to your counsel. You want to make sure you’re abiding by state and federal income tax laws. You’re also dealing with cash flow and balance sheet issues and it’s irrevocable most of the time.
Charitable giving is a fairly complex area of the law, so it’s very important that you seek counsel before writing well-intended checks to your favorite causes. Feel free to call us if you have an interest in that particular area.
I just wanted to wish all of you a wonderful Thanksgiving and a great beginning to the Holiday Season. So until next time, enjoy. Gary.
If you have a few minutes over the Holidays, my book Changing the Conversation, has more on the topic of wealth and giving.
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