We hope this note finds you well. In our community and across the country, families are gearing up for a busy fourth quarter. Giving season shifts into full gear, and we look forward to working with you! Whether you’ve already established your donor-advised or other type of fund at the community foundation or are currently considering it, please reach out. We would love to help you get even more connected to the causes you care about while maximizing tax benefits at the same time.
In this issue, we’re covering topics that are on the minds of many people as the year winds down.
Retirement and charitable giving continue to be intertwined. Over the last few years, we’ve all seen retirees who’ve gone back to work, colleagues who decided to retire early, and everything in between. Because IRAs and other retirement accounts are such useful assets for charitable giving, it is important to recognize the opportunities presented for charitable giving at every stage of retirement, from contemplating retirement all the way through to permanent retirement. Learn how the community foundation has you covered!
Meeting your 2023 charitable goals does not have to be stressful. The end of the year is a well-documented season of anxiety for many people. Fortunately, working through the list of organizations you’d like to support can be a bright spot. The team at the community foundation can help you accomplish your charitable giving objectives efficiently, effectively, and joyfully, including tapping into tax benefits. Learn why waiting until the end of the year to complete your giving actually has a silver lining.
Do good, feel better. It is not your imagination! When you give to charity or do something good for others, you really do feel better. From reductions in risks for high blood pressure to sleeping better at night, learn why philanthropy is such a powerful catalyst for well-being–both your own well-being and the health and happiness of the people whose lives you are improving through gifts to your favorite nonprofits.
Thanks again for all you do. We are honored to work together and wish you the best.
–Angie Tatro, CKCF CEO
Retirement strategies: Tax benefits and beyond
At the community foundation, we regularly talk with retirement-age donors and fund holders about the tax benefits of Qualified Charitable Distributions and leaving bequests of IRAs to a donor-advised fund at the community foundation. But getting involved in philanthropy can be so much more than that for retirees and people who are gearing up (or down!) for retirement. This is particularly relevant as some retirees consider returning to work and contemplate what that means for their charitable giving and volunteering plans.
You’ve likely heard the statistic that 10,000 people in the United States are turning 65 every day. And while 65 may be the “traditional” retirement age in this country, the milestone appears to be anything but traditional nowadays. While Covid-19 did not impact retirement ages as much as some might have predicted, many of those who did retire actually now regret it. While many retirees are seeking work for financial reasons, two of the top six reasons to go back to work involve boredom or loneliness.
For people who’ve reached a theoretical retirement age, working or returning to work provides many opportunities that tie into philanthropy. For example:
–You can still contribute to your IRAs (which many people do not realize), and if there’s an employer-sponsored 401(k) plan, all the better.
–You can use your extra income to fund your donor-advised fund at the community foundation, making you eligible for an income tax deduction as well as removing assets from your taxable estate.
–As you take advantage of the opportunity to get more involved with causes you care about in your free time (which has perhaps increased because children have grown), you can update your estate plan to leave additional bequests to your donor-advised fund at the community foundation to support your favorite causes after you’re gone.
–And of course, if you are 70 ½ or older, you can take advantage of the Qualified Charitable Distribution (QCD) which allows you to direct up to $100,000 annually from your IRA to a qualified charity, and even more in future years as the $100,000 cap is indexed for inflation. Plus, if you’ve reached the age when you are required to take distributions from your IRAs, QCDs will offset those Required Minimum Distributions (RMDs).
For those who’ve retired for good, remember that many of the organizations you care about could likely use your help not only financially as a donor, but also as a volunteer, board member, or community advocate.
Please reach out to the team at the community foundation. We’d love to work with you on your charitable giving plans for retirement, un-retirement, or re-retirement, as the case may be! Your seasoned professional skills and civic commitment are truly valuable to improve the quality of life in our community.
Fourth quarter jitters: Charitable giving tips to reduce your stress
You are not alone if you begin to feel a little anxious when October rolls around. Many people experience year-end stress, whether because of looming deadlines at work, tax-related estate planning cut-off dates, anticipating a busy holiday season of travel and social engagements, or simply the realization that another year is coming to a close and there’s not a lot of time left to check off items on the 2023 punch list.
To top it all off, many families do a lot of their charitable giving at year end, too. But that’s one area that does not need to be stressful. Your giving can be more easily accomplished than sending invitations, herding family members, guessing colors or sizes, and remembering who to include–or not!
Here are three tips for alleviating fourth-quarter stress and still be able to hit your charitable goals for 2023.
–Using your donor-advised fund at the community foundation makes giving very convenient. Through the foundation’s online portal, you can easily view a list of all of the organizations you’ve supported so far this year, make note of the ones you missed or want to add, and then finish the annual task.
–Your late-year timing could actually be useful for the organizations you care about, given the pronounced need for support during the gift-giving time of year, whether that’s to an organization seeking to achieve its own year-end goals or an organization that provides food or utility bill relief during the cold winter months. According to National Giving Month, 31% of charitable giving occurs in December; 12% of giving typically occurs between December 29 and 31; and 28% of nonprofits raise as much as 50% of their funding in December.
–Charitable needs are heightened during the fourth quarter because it is especially stressful for people experiencing financial challenges. For 52% of respondents surveyed in a 2023 study, money was the most cited factor that negatively affects their mental health, a level 25% higher than a year ago. The organizations supporting these people are in high gear during the fourth quarter and holiday season.
–By the end of the year, you will likely have a better idea of your financial situation, ideal target amount for charitable tax deductions, and the performance of stock in your portfolio. This will allow you to make gifts to your donor-advised fund of highly-appreciated stock, avoid capital gains, and reduce your taxable estate. And, of course, the proceeds of that stock will hit your donor-advised fund tax free, so the full amount of the sale price is available to support your charitable giving priorities.
Completing your 2023 charitable giving can reinforce philanthropy’s win-win value proposition: You can check a task off your list by supporting causes and organizations that are important to you and receive key tax benefits, and those in need will appreciate your generosity while feeling a greater sense of the season’s spirit.
Do good, feel better: Philanthropy through the lens of well-being
Philanthropy means “love of humanity”—and, according to some, “philanthropy” includes acts that benefit both the giver and the receiver. This is surprising to some people who have been taught “it’s better to give than to receive.”
Somehow we have popularized the idea that giving should “hurt.” But that is not what the research says. Consider just a few examples:
- Research on the connection between volunteering and hypertension revealed that four hours of volunteering a week reduced the risk of high blood pressure–by 40%–in adults over 50.
- Another study indicates that giving reduces cortisol levels.
- Yet another study found a link between unselfishness and a lower risk of early death because “helping others” reduces stress-related mortality.
- Research has linked doing something good for someone else to an increase in endorphins.
- An altruistic attitude in the workplace makes you more productive and less likely to quit.
- Doing good and being grateful helps you sleep better at night.
- People who do just one good thing a week for someone else actually become happier over time.
When people were asked to reflect about all the ways they do good (giving to charity, volunteering, serving on boards, donating canned goods, purchasing products that support a cause, celebrating at community events, sharing with others, and so on), 92% reported that they felt better about themselves.
Even just thinking about what you’ve given others–and not only just being grateful for what you’ve received–is a huge motivator to do good things for others, over and over again.
The “do good feel good” benefits of philanthropy is just one of the many reasons that so many individuals and families work with the community foundation. If you’ve already established a donor-advised or other type of fund with the community foundation, we look forward to continuing to help you fulfill your charitable wishes to improve the lives of others. If you’ve not yet established a fund at the community foundation, we look forward to working with you to make a difference in the causes you care about.
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.