Finding the Right Blend for Your Giving

A common misperception in charitable giving is that there are limited flexibility and options. While there are certain rules and guidelines, there are options for donors to balance the right combination of options for maximum impact and benefit, known as blended gifts.

A blended gift is not a type of charitable gift but a technique that combines two or more types of contributions that uniquely address the donor’s financial situation and philanthropic goals. This combination can maximize a donor’s ability to make a more substantial gift than they ever thought possible. Typically, this benefits the donor most, but the non-profit will also benefit from receiving a donation now and later.

How does this work? A donor at almost any age can choose gifts that work best within their situation.  The blended gift may vary based upon available assets, timing needs, tax considerations, and philanthropic goals. For example, a young, unmarried donor might make a recurring payroll deduction gift combined with a gift of retirement assets in their will. A married couple with current family obligations might combine an immediate offering of appreciated securities with a charitable remainder trust that will give them an income stream. A donor in retirement might pair a charitable gift annuity that will create a fixed income with a legacy gift at their passing. A grandparent who wants to teach their grandchildren philanthropy may initiate a Donor Advised Fund (DAF) now and have a charitable lead trust make distributions to the DAF before it provides the grandchildren money later.

Why give now instead of just making a legacy gift? In some cases, the donor can achieve the best tax benefits right now. Their tax bracket may never be as high as it is right now, so donations now will have the most tax savings. If the donor has stock they have held for more than a year, the best time to donate is while the stock is at a high point. As you think about your tax filings for 2020, could you have benefited tax-wise from some additional charitable giving?

Blended gifts create great customization with numerous alternatives available in the charitable giving toolbox. Do you want to see how we can create your perfect blend? I would be happy to discuss your questions.

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