The holidays are a time for giving, and donating to charitable causes is one way to make gifts that “keep on giving” throughout the year.
The main financial benefit of making charitable gifts is the potential to increase taxable deductions. However that’s not the reason most people give.
“Most people give because they want to help in some meaningful way,” says Will Stone, CFP® with McMullin, Stone & Associates of Fayetteville.
“When people desire to make an impact on an organization that’s important to them, we can help them figure out how to do it in a way that potentially makes the money go further, while also keeping their long-term financial plan on track.”
As an example, Stone recalls a client who wanted to make a special gift to their church as part of the church’s capital campaign for a new building.
“They made a gift of stock with a large gain, which otherwise would have triggered capital gains taxes for them had they sold the stock and given cash,” Stone says. “This method of giving allowed the client to give a larger amount, and of course the church received more to use for their campaign.”
Stone explains that the amount one is able to give is a percentage of income and not a set number, and that percent depends on the type of charity.
“It’s important to work with a tax advisor when considering this type of giving. Generally speaking, if it’s a public charity an individual can give up to 50 percent of their annual income, which includes most churches and nonprofit organizations.”
AVPride, The Real Life Center and Fayette Care Clinic are examples of local 501c3 organizations that are public charities, Stone explains.
Gifts to private foundations and charities are normally capped at 30 percent of annual income.
Stone says that a Donor Advised Fund is one arrangement some financial services companies have set up in which a client establishes a fund in their name or perhaps in memory of someone, and then is able to recommend charitable donations to a variety of organizations from the fund’s assets.
“These funds give people a way to give money anonymously if they wish and are often used when clients have a large income event in one year, such as the sale of a business. They can make a large gift to the fund, which qualifies as a charitable deduction in that year, and then advise on where those funds are given for years to come,” he explains.
McMullin, Stone & Associates provides access to Donor Advised Funds through its relationship with Raymond James Trust, N.A. Clients are able to make gifts of their cash and investments directly from their Raymond James accounts or by transferring them from other accounts.
Stone and his team can also help clients make donations of stock to charities, as long as the receiving organization has an account that can receive marketable securities. And if a nonprofit does not have an investment account to receive marketable securities, he’s been able to help them set one up, too.
“There are so many generous people in our community, and we’ve been able to help clients figure out what they can contribute without sacrificing their long-term retirement goals,” Stone explains. “I think that’s one of the biggest services we offer, helping people who really want to use their resources to benefit causes that are meaningful to them and helping them figure out how they can do that during their lifetime in ways that are beyond what they thought they could do.”
Stone says, “I’ve seen some of the greatest enjoyment in people being able to give to their family or church or other special organization while they were still alive.”
To find out more about charitable giving through McMullin, Stone & Associates, call 770-471-6674 or email firstname.lastname@example.org. 101 Devant Street, Ste 903 Fayetteville GA 30214.
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. McMullin Stone & Associates is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc. Raymond James Trust, N.A., is a subsidiary of Raymond James Financial, Inc. Raymond James is not affiliated with nor endorses the organizations mentioned. You should discuss any tax or legal matters with the appropriate professional. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S.