A Legacy of Generosity

When I was in my 20s my father sold his business and retired.

His commitment was to give a portion of the proceeds to charity. But he also wanted that money to have a long-term impact…on worthy local causes and also on his family.

So, following some good advice, he and my mother created a family foundation. 

At the time, the family foundation was the best vehicle for accomplishing his goals. It allowed him to donate a large amount to charity, get a current tax deduction for the gift, yet not have to disburse the gift immediately.

Even better, the family foundation could take the donated funds, invest them, and give away the earnings in perpetuity. 

I won’t say how much my father originally donated (that’s how he would want it). But I will say the foundation’s impact over the last 35 years has been amazing—beyond my parents’ wildest dreams.

For every $1 my father originally used to fund the foundation, $3 has been given away to charity! At the same time, the base amount in the foundation has tripled in value! That means the foundation is set to give away much more money over the next 35 years.

Since the beginning, my four siblings and I have been part of an annual family meeting to discuss how to distribute the funds available for giving. This has given us a good reason to gather as adult children and has inclined us to be more charitable and civic-minded. 

Today a great charitable vehicle to consider is a donor-advised fund (DAF). Generally, a DAF enjoys all the tax benefits my father’s family foundation enjoyed. However, it requires less administration and tax reporting. Because of these cost reductions, it’s possible to start a DAF with a small amount of money.

A DAF provides for:

  • Easy giving. Some like to make numerous donations to a variety of charities throughout the year. With a DAF you need only keep up with your contribution to the DAF, not each individual gift made from the DAF.
  • Itemized giving. You may be able to “bunch” some charitable contributions into one year, allowing you to itemize tax deductions in one year, then use the IRS standard deduction the next. By using a DAF, you can spread the distribution of those gifts to charities over more regular intervals. 
  • Wise giving. Suppose you were suddenly able to make a large donation to a favorite charity. Are you sure they could handle it? Using a DAF as an intermediary, you could realize the tax benefits of an immediate gift yet distribute your gift to any specific charity in timely and wise amounts. 
  • Anonymous giving. Gifts made through a DAF can be made anonymously.
  • Estate-wise giving. Is charitable giving part of your estate plan? A DAF allows you the benefit of income and estate tax deductions available through charitable giving while letting you delay the decision about where those gifts will go. 
  • Family giving. There are few things parents can do to influence their adult children more positively than to involve them in the joy of generosity. If you are able to dedicate some of your family wealth to charitable causes, you can do what my father did – create a perpetual source of gifts from your family to charities your family values. One benefit of a DAF is that you can do so with even modest amounts of money.

In case you haven’t heard, Tuesday, May 3 is “Give for Good” day. It’s sponsored by the Community Foundation of North Louisiana. You can check out how to give to local charities and get a matching gift here (https://cfnla.org/event/give-for-good). 

If you’d like to learn more about charitable giving and donor-advised funds, email me at bmoore@argentadvisors.com. I’ll send you a free overview right away.

We lost my father over a year ago. He’s no longer living, but he’s still giving.

Wouldn’t it be something if we each built that kind of legacy?

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

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