Charitable Planning Questions To Discuss Over The Holidays in 2023
by Ken Nopar, VP-Senior Philanthropic Advisor
Families will celebrate the upcoming holidays together, and for many it will be an opportunity to have meaningful conversations about charitable giving: for this year and beyond.
The COVID pandemic and world events have caused some donors and their families to reconsider their charitable priorities over the past few years. Fortunately, during these times of great need, AEF donors responded generously. So far this year, the number of grants recommended by AEF donors has increased by 8%.
Some families or individual family members may wish to donate to the same organizations that they have always supported, while others have already changed direction and supported new causes or charities, adjusted the amounts they granted out to their usual grantees, or intend to make additional changes going forward. Though there may be differences between family members, philanthropy can often help to keep them 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 tax law changes that impact charitable giving in recent years and this year is no different, so talking with advisors before or during the family gathering since may be very helpful.
Because of the challenges family members and society have faced this year and last, this year’s charitable planning conversation may be more important and relevant than ever before. This can 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? Does the growth of our investments or success in our business enable us to give more this year?
- 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? Should we name the donor advised fund as the charitable beneficiary of the IRA 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. 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. Many families have shifted their grant making to spring, summer, or early fall since charities need their donations throughout the year. The challenges many individuals and charities face remain substantial, yet the opportunities for philanthropic families to make a difference are great as well.
Ken Nopar is AEF’s VP and Senior Philanthropic Advisor. He can be contacted at firstname.lastname@example.org.