By Maurice Stouse
Financial Advisor and Branch Manager
Now that we have crossed mid-year, it’s a good time to not only assess things about our “giving,’ but also to start the year-end planning process as well. The United States (and its citizens) are among the most charitable, giving nations in the world. And even though tax laws have made some changes to charitable giving, investors and savers alike are not only thinking about “how” and “what” they are giving, but also how they might be able to be smarter givers. The question is, how do you do it?
Giving is motivated by the three Ts: Time, Talent and Treasure. This article is focused on the giving of treasure. Raymond James produced a “white paper” last year on charitable giving. It explores several ideas and has suggestions on how to give more smartly of your Treasure.
It all starts with a review of today’s givers, the “who.” If you looked at some numbers, you will find that a giver is typically a mature American (88%) and 72% of all givers are classified as baby boomers. Next, what are their causes? The study says the top four are: 31% to religious institutions; 14% for education; 12% to human services and 11% to foundations. And lastly, where do the givers typically come from? The leaders are Utah, D.C., Mississippi and Tennessee.
So, how and why are people giving? According to the paper, people want to make a difference, to create a legacy and to act upon a sense of moral duty. There are incentives as well: Potentially lower taxes, managing their wealth and guidance on estate planning. Giving can be as straightforward as a cash or check donation. This can be cumbersome, however, if you have several nonprofits that you want to support.
An idea growing in popularity and utilization is the Donor Advised Fund or DAF. Raymond James calls it “the new face of giving’ and it is the fastest growing charitable vehicle in America. DAFs are public charities and qualify under IRS section 501(c)3. The way that they work is that they take in contributions from the giver by way of cash (or check), but also securities (stocks and bonds for example). Depending on someone’s situation, a tax deduction might even apply. The DAF in turn takes the contributions and invests them into mutual funds for growth or income or preservation of capital.
Note the wording of “donor advised.” That means that the donor can directly ask the DAF to periodically, or when they would like to, send contributions on to another charity. That charity could be educational (a college, university or any educational nonprofit), religious (church), human services or foundations (educational, athletic as example). In the meantime, any amounts not gifted out can be left to grow and accumulate over time, for many years.
In the end, giving is simpler, one contribution, to one charity that can then be dispersed as you request or advise. Many firms allow you to do this online or even delegate it to your advisor, at your direction. You can title or name the account as well. These accounts also allow you to name successor donor advisors or a final recipient charity of the value of the account at your death. Many people appreciate having this available for making donations to their schools, churches, hospitals and various local or national/international causes.
If you would like to learn more, feel free to request a copy of the Raymond James white paper: Giving Wisely by emailing me: Maurice.stouse@raymondjames.com.
Maurice Stouse is a Financial Advisor and the branch manager of the First Florida Wealth Group and Raymond James and he resides in Grayton Beach. He has been in financial services for over 32 years. His main office is located at First Florida Bank, 2000 98 Palms Blvd, Destin, FL 32451. Branch offices in Niceville, Mary Esther, Miramar Beach, Freeport and Panama City. Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals. Email: Maurice.stouse@raymondjames.com.
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. First Florida Wealth Group and First Florida Bank are not registered broker/dealers and are independent of Raymond James Financial Services.
Views expressed are the current opinion of the author and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results.
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