Originally published in the WFCF Newsletter, Vol. 2, No. 1, February 2006
Charitable giving can benefit both the recipient and the donor. Besides helping worthwhile organizations and needy individuals, charitable giving can also provide positive income and estate/inheritance tax benefits to the donor. Charitable giving may take many forms—outright gifts of money or property; gifts to a trust in which the donor or another family member retains an interest in the donated property for life or a shorter term; gift annuities; and, designation of a qualified charity as beneficiary of retirement accounts, deferred annuity contracts or life insurance policies. Often, charitable giving is recommended as part of a comprehensive estate planning strategy when the donor desires to provide “social capital” for worthwhile causes in lieu of entrusting the federal and/or state government with tax dollars. In other words, many individuals have more confidence in a charitable organization—as opposed to the federal or state government—to accomplish worthwhile goals and objectives. If you are interested in starting a charitable giving program or learning more about the benefits of such giving, you should consult a qualified tax advisor.