Make the Most of Your Donations
By Saghir Aslam
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Millions of Baby Boomers and others are finding themselves in a financial position to share some of the fruits of their life’s work with others. According to a study from Blackbaud, Boomers account for $61.9 billion per year in donations, or 43% of all dollars donated.*
But before you begin your own process of giving to a charity, Deborah P. Lauer, Vice President and Wealth Planning Strategist for Wells Fargo Advisors, says it’s wise to start at the beginning. Think hard about broad causes you’re interested in – then use that process of discernment to begin narrowing your search to find particular organizations that best serve that cause.
Find your interests
According to Lauer, many prospective donors have spent their lives with a narrow focus — working, saving, and caring for their families. Often they’re not well-versed on the universe of possible beneficiaries of their philanthropy. She suggests individuals support charitable causes they are passionate about or members of the family are involved in – perhaps music, education, scientific causes, the arts, or health care-oriented organizations.
Gauge your impact
It is important for budding philanthropists to identify the type of impact they want to make locally, nationally, or even globally. “It’s very common, even with high-net-worth donors, to give locally and benefit their immediate community,” says Lauer. “When they’ve decided on the type of impact they want to have, then they can begin to focus on the type of charitable giving program they want to institute.”
Some will want to set aside charitable bequests, benefiting causes upon their death, while others are eager to begin right away, to see the impact of their philanthropy during their lifetime. But she cautions all of this must be done in close coordination with a person’s Financial Advisor and other professional advisors to determine how the gift or gifts may impact their investment plan, along with their income and estate tax planning needs.
Do some amateur sleuthing
After you’ve narrowed down the field and thought about where and when to make your impact, you are ready to begin zeroing in on potential beneficiaries of your philanthropy.
The search should always begin by checking a charity's website. A subsequent review of online tools such as Charity Navigator (http://www.charitynavigator.org/) and Guidestar, (http://www.guidestar.org/), which independently appraise charities, also makes sense. And Lauer says you should always check the IRS website for the Exempt Organization Select Check (http://apps.irs.gov/app/eos/). That site lets you know whether a particular charity is an approved organization and that your contribution is tax deductible.
Once you’ve narrowed your search, Lauer suggests you consider volunteering for the charity. Not only does this give you the opportunity to experience the organization from the inside, it also allows you to see firsthand the level of service they’re offering to the community.
*2013 Blackbaud study, http://www.forbes.com/sites/deborahljacobs/2013/08/08/charitable-giving-baby-boomers-donate-more-study-shows/
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale. This article is written in collaboration with Walt Hommerding of Wells Fargo advisers.)