20 Charitable Planning Questions for the 2020 Holidays
Submitted by American Endowment Foundation on October 1st, 2020By Ken Nopar, Senior Philanthropic Advisor
This year has been different from any other during our lifetimes. While some AEF donors traditionally review their charitable plans with their families when they gather to celebrate the holidays, unfortunately, a number of them will not be able to get together in person this year.
Though families may not be in the same home, many still will want to have the charitable conversation with their loved ones to determine what they will do for the balance of the year and beyond. Fortunately, families have become more comfortable using video conferencing so the discussion can still take place.
The number of grants recommended by AEF donors in the first half of the year increased by 35% as they understood there was great need. The pandemic and other events in society have caused some donors and their families to reconsider which causes and charities to support this year.
Each family situation is different. Some family members may wish to continue to support the same organizations that they have always supported, while others may want to change direction or provide more or less funding to new causes or charities. Because this is also an election year, feelings and emotions can be more elevated than usual. Though there may be differences, philanthropy can help to keep families united.
Usually, families want to have this discussion themselves, but it may be beneficial to include a trusted family advisor who has knowledge of the financial, legal, or tax aspects of charitable giving. There have been many changes to the tax implications of charitable giving in recent years including this year’s CARES ACT, so talking with the advisor before or during the meeting may be very helpful.
And because of the challenges family members and society have faced this year, this year’s charitable planning conversation may be more important and relevant than ever before. This may be the ideal opportunity to engage children or grandchildren who have not previously been interested.
Some questions that AEF donors may want to include in this year’s conversation include:
- What is the history of philanthropy in our family?
- Why is philanthropy important to each of us? What is our motivation for giving?
- How involved do we want to be with our giving? Should we volunteer, serve on a board, go on site visits, attend conferences, collaborate with other donors, or just send in donations?
- Which causes and charities are most important to each of us, and why?
- Are there causes and charities that we have supported in the past that are no longer as relevant? Are there any new ones we should support?
- Which past donations have provided us with the greatest satisfaction or regret?
- Should we have one charitable mission and donate as a group, or is it OK to give separately?
- Do we want the bulk of our giving to be in the near future, throughout our lifetimes, or for generations to come? Has this year changed our timeline?
- Who wants to be involved, now and later? Who will be in charge of family giving in the future?
- Do we want to support many or few charities, large or small ones?
- Do we want to be public or private with our giving?
- Should we plan and manage our giving ourselves, or would it be helpful to bring in charitable giving experts to help?
- Should we change the amount we donate this year? If we’ve already given this year, should we give again and how much?
- Have we talked with our financial and tax advisors so we get the maximum tax benefits? Is everyone fully aware of the advantages of donating assets other than cash?
- Are there particular assets (real estate, family company’s stock, collections) that we own that nobody will want in the future that can be sold or donated to a charity or donor advised fund account? Can that be used as the basis for our giving in the future?
- Does the family have any charitable vehicles currently, and are there any challenges with them? Are there simpler and less expensive options such as donor-advised funds?
- Are there any charitable beneficiaries named in the estate plan? Shall we include some? Is a charitable legacy important to us?
- Should we donate the Required Minimum Distributions from our IRA to charity or should we make a change because of the CARES Act that passed this year? Should we name the DAF as the charitable beneficiary at death instead of the children to avoid the significant taxes that would need to be paid?
- What concerns does anyone have about our charitable giving?
- What has been and will be the impact of our giving? How can we evaluate this impact?
It’s always beneficial to have these conversations regularly with the family, and perhaps they have never been more relevant than this year. Advisors can be very helpful in helping families plan, perhaps not necessarily where to give, but how, when, and how much to give.
And though it is already late in the year, making grant recommendations as early as possible is very important this year. Due to COVID-related restrictions or impacts, some charities may have limited hours or availability and they would like to receive these year-end grants as soon as possible. The challenges many face this year are substantial, yet the opportunities for philanthropic families to make a difference are great as well.
At American Endowment Foundation, we look forward to helping donors and advisors determine the best strategies for their charitable giving. Please contact us or call at 1-888-966-8170 with any questions.