With all the turmoil we’ve experienced during the last few years, it’s important to concentrate on the positive side.
According to CNBC.com, “Over the past couple of years, the effects of Covid-19, social activism and economic uncertainty have profoundly impacted women’s attitudes about their finances, according to a UBS survey.
Nearly 9 in 10 women believe money is a tool to achieve their personal “purpose,” the report uncovered, polling 1,400 women investors in January and February 2022.
“Many women have a deeper commitment than ever before to leading more purposeful, intentional lives and making a positive difference in the world,” said Carey Shuffman, head of the women’s segment for UBS.”
While we’re always tempted to send money where it’s needed, it’s also important to make sure your money is being used wisely – both by the charity and in your financial plan. Here are three steps to help ensure your money is going where it should.
Research organizations that align with your values. Do you want to help a smaller organization? Global or local initiatives? Here are a few questions from Fidelity Charitable to ask non-profits before you commit your funds:
When I work with a client, it is helpful for me to understand their values when crafting their financial plan.
For example, is it more important for you to retire early and spend time with your family or to have more money to spend in retirement? Or, if not being a burden to your children is important, we may allocate more money to long term care insurance.
We can use the conversational tools I use to determine values to help select charities.
Another important aspect of charitable giving is understanding how it affects your taxes.
I also like to show my clients ways to “help” without giving money. There are myriad investments that are focused on doing good, such as individual companies and mutual funds that are focused on helping women, or clean energy. It can be hard to sort through them all and make sure that they really are investing in line with their mission statement – I have tools to use and experience to help select these investments.
I can also help you figure out how much you have to give, and where that will come from. You can also see how it will affect your overall plan; for example, if you donate 5% of your income to charity each year, you may only have to work 1-2 years longer to reach your same goals in retirement and that may absolutely be worth it for someone charitably minded.
We’ll also discuss your estate plan and how charitable giving might play a part. You may not have cash flow to give right now, or money to invest, but leaving money to charity as part of an estate plan can be very beneficial to those charities. Beneficiaries get the full value of your assets without taxes on gains (“a step-up in basis”).
If you’ve been watching the news and are finding it endlessly depressing, giving back could be a wonderful way to feel a little more in control. If this is something you’re considering, I would be happy to discuss your options with you and help ensure your money is helping both the cause and your financial plan.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.