As the year 2019 really gets rolling, you already may be looking at your resolutions in the rear-view mirror. If so, you aren’t alone. According to Forbes magazine, of the 40% of Americans who make resolutions every year, only 8% end the year achieving those goals. But for all the individuals out there who resolved to be more charitable, but have yet to take steps to that end, we’re here to help you keep your goals.
Be Strategic
We’ve all made resolutions we were unable to keep. One of the key reasons we can’t keep them is because they are too broad. If you’ve ever made a resolution to lose weight and by December 31 look down at an unfriendly number on the scale, it is likely because you set a broad “what” without a strategic “how.” The same goes for a resolution to be more charitable. Really knowing and understanding your charitable goals allows you to develop a strategic overall plan for meeting them. In other words, if you plan to give more of your time or treasure to a cause, it’s important to identify who or what you’re going to do over the year to keep that goal.
Talk to representatives from the organizations you want to support and determine their need. That way, you have made a contact and a commitment which will help you to hold yourself accountable.
Land and Expand
Once you’ve landed on a specific philanthropic goal, determine ways in which you can expand your reach with that particular goal. Are there multiple charitable groups who address the same cause? Can you do more than just write a check to support your charity? Are there volunteer opportunities or service projects with which you can get involved to help? Are there groups out there that are dedicated to the support of your common cause? Really get involved and find out how your impact resonates.
Talk to a Financial Advisor
For many, the thought of contacting a Financial Advisor seems intimidating. People worry that the FA will talk over their heads about investment strategies, stock market trends or make you feel bad about past financial missteps. In most cases, worries are far overblown. FAs are in the service industry. They work for you and are there to help guide you to a positive result. Explaining your charitable goals to a Financial Advisor and asking questions about potential risks and rewards pertaining to charitable investing is the smart and prudent approach to success.
Try Something New
If you’ve been passionate for years about a specific cause, you can continue to support that cause, but don’t pigeonhole your efforts. Let the new year give way to new passions. Find a new charity that is just getting started. Determine new ways in which you can give. There are many ways that a fresh take on a charitable attitude can promote the drive needed to achieve your resolution.
Falling Behind?
If by the middle of February, you have yet to make any progress on your charitable goals for the year, all is not lost. You can open a Donor-Advised Fund at any time, fund it and still have the capacity to give all year long!
By contributing assets to a DAF, you can recommend grants in perpetuity to your favorite approved charities. Here’s how.
In essence, a DAF is a charitable savings account. If you invest an initial $100,000 in your DAF and select an investment strategy with a likely annual return of 5%, without ever contributing more money to your fund, it should theoretically grow by $5,000 each year. If you set up an annual recommended grant disbursement to your favorite charities of choice of even 4%, you will be able to distribute $4,000 a year and your fund will still be growing at a rate of 1% annually without any further contribution.
Of course, if you want to retain the tax benefits associated with charitable donations, you will have to continue to make contributions to your DAF, and that’s when everyone wins. Your fund grows, the disbursements then grow and the charitable impact you have on those in need begins to grow.
If you’ve made a charitable resolution in 2019 and need some help getting it back on track, we want to help.
Contact us to find answers to any of your other charitable planning questions.
