[FALL 2023] PLANNED GIVING IS FOR EVERYONE
Planned giving is not only for older and wealthy people. The best part is that there are benefits to those who give and thE futures of the charities you support. Learn how you can create a thriving community now and in the future.
ASSETS THAT MAKE GREAT GIFTS
Whether as part of your estate or part of your annual financial plans, there are many asset classes that serve as wonderful gifts to support United Way. If you are interested in gifting any of the below, please reach out to discuss the process and specifics of your gift.
STOCKS AND BONDS
Donating appreciated securities, including stocks and bonds, is an easy and tax-effective way to make a gift.
REAL ESTATE
Donating appreciated real estate, such as a home, vacation property, undeveloped land, farmland, ranch or commercial property, can make a generous and convenient gift.
CASH
Donating cash is a simple and easy way to support a charity of your choice.
RETIREMENT ASSETS
Designating to United Way part or all of your retirement assets, such as a gift from your IRA, 401(k), 403(b), 457, pension, or other tax-deferred plan, is an excellent way to make a gift.
INSURANCE
A gift of a life insurance policy can be a wonderful way to support your charity. If you have a life insurance policy that has outlasted its original purpose, consider making a gift of the policy. For example, if you took out a policy to provide for young children, but they are now financially independent adults.
Planned Giving is for anyone, at any stage in their life. It is a wonderful way to support our community through Heart of West Michigan United Way, often in ways that have minimal impact on your daily budget, but long-standing effects on a thriving future for everyone.
time to bust some myths
about philanthropy
BY: Warner Norcross + Judd LLP, Trusts and Estates Practice Group
Look at any community in Michigan and you will likely see tangible evidence of thoughtful philanthropy at work, whether it is a community center built with a gift from a dedicated city champion or an innovative program that is helping people in need to get back on their feet. And when you ask community members about the city’s philanthropists, they automatically think of very wealthy people who make large gifts. But this definition of a philanthropist is just one of the myths that can get in the way of effective efforts to support nonprofits in solving important issues. With that in mind,
I DON’T NEED A PLAN FOR MY CHARITABLE GIVING–I WILL GIVE AS NEEDS ARISE.
If you have enough assets to be subject to estate and gift taxes, a thoughtful, strategic giving plan, using some of the techniques mentioned earlier in this resource, can save you and your family on taxes, create tremendous impact in your community over multiple generations and help pass the family legacy of giving to younger family members. Even if you don’t need to worry about estate taxes, a charitable giving strategy still helps you create maximum impact for your donations. Plus, you can leave room in your plan to make gifts as emergencies arise.
PLANNED GIVING ONLY HELPS A CHARITY AFTER MY DEATH.
Planned giving is exactly what it sounds like: making a plan for your assets that includes a gift to charity. Several of the available philanthropic planning techniques do provide income to a charity after your death, such as making a bequest in your will, naming the charity as a beneficiary on your life insurance or retirement plan account or creating a charitable gift annuity. However, you have other options that would provide funds to a charity during your lifetime. These options include naming a charity as a beneficiary of individual retirement account required minimum distributions, donating appreciated stock or other assets, providing grants from a donor advised fund or making cash gifts to charity in years where your income may be larger than normal.
I CAN’T GIVE ENOUGH MONEY TO MAKE A DIFFERENCE.
Large, single gifts toward a charity’s specific goal, made during your life or from your estate after death, are wonderful and appreciated, but regular, planned donations, combined with those of hundreds or thousands of other people, can also make a big impact. These donations provide the necessary flow of income that a nonprofit organization needs to keep it running and providing important services every day.
MY MONEY SHOULDN’T GO TO FUND ADMINISTRATIVE OR FUNDRAISING COSTS.
In order to make an impact on an issue, an organization needs to hire high-caliber, experienced people to coordinate and carry out their efforts. In addition, it needs to hire people to bring awareness of its services to those who need them, and it needs people to apply for grants and raise money to continue funding their daily operations of providing important services. Thus, it is very important for donors to gain an understanding that some of the money donated to a nonprofit must be used for administrative costs.
PHILANTHROPY IS ONLY FOR OLDER PEOPLE.
Certainly, the older generations may have greater financial stability and a better ability to give back after making their wealth, but the younger generations see local and world issues of great importance to them, and they can help move the needle on these issues with a philanthropic plan that commits support to one or more issues over the years. Examples of planned giving techniques for younger generations could include regular support for organizations such as the United Way, seeking out corporate matching gifts to increase the scale of their giving and naming a charity in their estate planning documents.
Avoiding the thought traps above can help you take advantage of the planned giving options that make sense for you and the charities you wish to support. The best part of philanthropy is that there are benefits to those who give as well as those who receive. Your estate planning attorney can help you create a plan to make the most of these benefits for everyone involved and at every level of giving.
now and into the future
Hal + Judy
When the time came for Hal and Judy to think about the future, they thought about what was most important to them, the values they lived their life by, and how they could best leave an impact when they were gone. They chose to seek guidance.
As they began working with their estate attorney, they hoped to put their life’s treasure to good work, in the areas that matter to them.
“WE BELIEVE EVERYONE DESERVES A FAIR SHOT, AND WE REALLY VALUE EDUCATION” Hal shared.
Judy’s experience as a ‘Big Sister’ volunteer allowed her to see firsthand the effects of unstable housing on young people. Judy relied upon United Way resources in the past to find housing and connect her ‘Little Sister’ to other resources. Supporting underprivileged youth and those aging out of foster care – specifically in the areas of homelessness, counseling, and education – is where they found they’d like to focus their lasting impact.
After deciding how they intended to make an impact through planned giving, they now were left to review and carefully select a nonprofit organization that aligned with their values and personal focus areas. Intentionally, they also sought out organizations that instilled confidence that their wishes would be fulfilled.
Heart of West Michigan United Way has a storied history serving as the steward of our community’s collective generosity for more than a century. Hal and Judy found that United Way is positioned so that their funds would be directed as they wished and could lead to the greatest impact across the county.
Through their generosity, they will invest their estate in the future success of our community’s most vulnerable-our youth-in the areas of counseling, housing, and education.
Something that was especially important to Hal was the overall financial wellness of our local United Way and wanted to be assured the amount of administration fees would stay low in the future. To assure him, senior leaders of the organization sat down with Hal and Judy to review United Way’s current financial standing and walk through our internal processes and administrative fees.
Through this journey, Hal and Judy continued to build confidence that Heart of West Michigan United Way was the best organization to partner with in accomplishing their goals. Our team at United Way are enormously grateful to Hal and Judy for the confidence they have placed in us.
If you would like to discuss your philanthropic passions and hopes for the future, please contact Lynne Koss at lkoss@hwmuw.org or 616.819.9178.
We also encourage you to visit hwmuw.org/planned-giving to learn more about the different ways to give and think about your future.
YOUR IRA DISTRIBUTION
The IRS mandates that you begin your Required Minimal Distribution (RMDs) of your IRA after a certain age. This increases your taxable income and may push you into a higher tax bracket. Plus, RMDs get higher year after year, which means your taxable income, and possibly your tax bracket, increases year after year too!
However, the IRS also allows individuals to transfer up to $100,000 from their IRAs to a recognized charity of their choice. Couples can contribute $200,000. Care is needed, though: the contribution must go directly to the charity and not first to the IRA owner, or else the owner is taxed on the distribution. Always speak to your tax advisor when thinking about an IRA charitable distribution.
There are several benefits to supporting United Way through an IRA distribution:
Your gift will not be counted as income, so you will pay no income tax on the RMD.
The IRS will consider your RMD distribution fulfilled.
You may save thousands in higher taxes by avoiding a higher tax bracket.
The receiving charity will not pay taxes on the donation either, maximizing your contribution amount.
