TRY CHARITABLE STRATEGIES OF THE WEALTHY
By Wayne B. Zussman
Warren Buffett, along with Bill and Melinda Gates, have challenged the nation’s billionaires to give away at least half their net worth. To date, the Gates have given $14.5 billion to fund vaccines. Along with Warren Buffett, who says he will donate 99 percent of his wealth, at least 40 more billionaires have heeded the call, including New York City Mayor Michael Bloomberg, Oprah Whitney, eBay founder Pierre Omidyar and moviemaker George Lucas. Recently the world’s youngest billionaire, Facebook founder Mark Zuckerberg, announced that he was pledging $100 million to the Newark public school system.
It’s definitely inspiring, however, not many of us can part with half our wealth. But if you think and act like a billionaire, you can make a bigger philanthropic impact than you ever thought possible. Right now charities can really use your assistance. Donations to the nation’s largest nonprofits plunged 11 percent last year, the biggest falloff in at least two decades, according to the Chronicle of Philanthropy. To make more of an impact, try these seven strategies of the ultra-wealthy.
Billionaires are businesslike about giving, so they:
- Write bigger checks to fewer charities. Making a bigger gift can make a substantial difference to some nonprofits.
- Plan your giving for the year and take time to research charities. At the beginning of the year, settle on how much you want to give and work that into your budget.
- Round up like-minded friends and pool your charitable resources. This has become easier, thanks to social networks.
- Receive by giving. When you donate into a gift annuity you can take a deduction for a portion of your gift as well as receive income for the nonprofit you donated to.
- Give away highly appreciated assets. For example, a stock you bought for $10,000 two decades ago is worth $40,000 today. Give it to charity, and not only can you avoid paying a 15 percent tax on your long-term capital gains of $30,000 (about $4,500), but you can also deduct the full $40,000 on your taxes. Real estate and land enjoy similar tax treatment.
- Give your time to your favorite cause. Do not underestimate the value of your time and your skills.
- Open a charitable gift fund to spread your giving over time. The very wealthy love the prestige of foundations, and the tax benefits do not hurt either. Foundation benefactors receive large upfront tax deductions, plus the ability to keep making charitable gifts for years to come. You can get many of the same benefits with a charitable gift fund.
Wayne, a certified financial planner, can be reached at Triton Wealth Management at 410 210-2110 or visit the website at www.TritonWM.com