With the holidays approaching, many people are considering donating to causes near and dear to their hearts. But more than an annual holiday tradition, your charitable giving can actually be reflected in your long-term financial plan — and even continue after you’re gone — through planned charitable giving.
Why Planning to Give Can Have Even More Impact
We all know that nonprofits run on donations. What many people don’t know is that nonprofits run off planned donations, as well. It makes sense when you think about it: nonprofits can’t predict what donation campaigns or fundraisers will really resonate with people, so income from donations can be unpredictable at best.
That’s why nonprofits and charitable organizations benefit when people plan their charitable giving in advance. It helps the nonprofit plan for the donation, manage their costs and programs year-round, and plan for upcoming programs or events. It also helps you (the donor) figure out just what you’re able to give and commit to it.
So… how can you start planning to give?
How to Start Your Charitable Giving Plan
First and foremost, it helps to make a list of causes and/or organizations you want to support with your money. If you don’t have a preferred charity, or want to find other causes to support, you can browse sites like CharityNavigator to find legitimate 501(c)(3) organizations. You can choose to donate to these causes and organizations once a year, once a month, or another timeframe; it just helps to let the organization know they can plan on that money coming in at a specific time. And if you want to include charitable giving in your legacy, you can also plan to donate a lump sum upon your passing.
If you want to donate in ways that are really meaningful to that organization throughout the year, rather than just in a lump sum, you can also consider a donor-advised fund. Donor-advised funds work essentially like a “donation bank account,” where you put your donations into the fund and then the managing board for the organization can determine what to do with the money on a yearly, quarterly or predetermined basis. You can also set up a donor-advised fund in your community or with another organization you love, like a college, a local library, etc. The organization will receive your yearly or lump sum and then put it to good use. Donor-advised funds are also a great way to continue giving long after you’re gone.
Plan Now for Future Giving
If you’re interested in giving money to charities this Giving Season, why not start planning ahead? You can talk to your Certified Financial Planner™ about how much you have set aside to give, and what to do with that money throughout the year. He or she could also help you connect with charities with a charitable planning expert, as well as find out which type of donor-advised fund that is right for you.