The season of giving

When thinking about charitable giving consider these three important things – how much to give, to whom to give and how to give.

It’s the most wonderful time of the year – the season of giving. There is something magical about this time of year; families coming together, neighbors helping each other and friends gather for laughs and to enjoy each other’s company. It is during this time that many consider donating to organizations as a way to give back. When making this personal decision, consider three important things – how much to give, to whom to give and how to give.

How Much to Give

Giving USA’s 2016 report indicated 2015 was the most generous year of charitable giving ever, at an estimated $373.25 billion.1 Giving by individuals represented 71 percent of all giving.1 The remaining 29 percent was divided among grants from foundations, gifts by bequest and gifts by corporations.1 In 2015, 91 percent of high net worth households gave to charities, and about half had a strategy and budget for giving.2 The average annual household contribution in 2015 was $2,974,3 while the average annual high net worth household contribution was $25,509. A high net worth household was defined as having a net worth of $1 million or more and/or annual household income of $200,000 or more.2

There isn’t a one-size-fits-all formula to determine what level of giving suits you and your family. Many factors go into the decision: personal values, financial situation, life experiences, faith and family goals. You should also consider the tax implications, as well as the impact, giving may have on your finances. To begin an analysis of how much to give, start by organizing your balance sheet, reviewing your expected future cash flow and analyzing your income tax status. Seek out your financial advisor to help you with this task. In the end, there is no right or wrong answer as to how much you choose to give.

To Whom to Give

Choosing a worthy charity is an essential part of the giving process. High net worth donors have reported their top challenge in charitable giving has been identifying what they are passionate about and deciding where to donate.3 Further, a majority of donors, 60 percent, are driven by the type and profile of a particular organization, while only 28 percent are driven by the issues supported and the remaining 12 percent of donors have other factors driving the decision.3 Of high net worth donors, a resounding 78 percent gave to organizations that supported their values.3 Before donating, ask yourself: What do you care about? What do you value?

Once you’ve selected causes that ignite your passion, research how you can make the greatest impact. Evaluating options may be overwhelming, given the number of charities across the country and around the globe. To help you get started, use online research tools such as GuideStar, Charity Navigator, Charity Watch and the IRS Exempt Organizations Select Check Tool (available at

Visit the charity’s website too. Many charities post important documents on their website, including filings with the IRS, financial statements and filings with state attorney general’s offices, providing you with additional insight. If feasible, consider a visit to the organization’s offices, or location where services are provided, to see the charity’s activities firsthand.

When giving, if you have any questions about the charity’s status, consider requesting a copy of the IRS determination letter confirming the organization has been approved by the IRS. It is also recommended you request a receipt of your contribution for tax reporting purposes, if one isn’t provided to you.

How to Give

The method you choose to make donations is a very personal decision. A giving plan should be customized to achieve your goals and objectives. Understanding the legacy you want to create through giving, the level of influence desired over the gift and your time horizon, will allow you to adopt a strategy that is right for you.

Giving strategies range from outright gifts to a charity, to establishing a private family foundation with ongoing grant making activities. Outright giving is by far the most common and simplest form of charitable giving. However, if you desire to give over a longer period of time, retain some future oversight or involve other family members, you may want to consider exploring other giving options such as establishing a donor advised fund, private foundation, charitable trust or contributing to a charitable pooled income fund. You should seek out your financial advisor for help in understanding each strategy and finding one that suits you best.

A lifetime gift to a charity will generally provide you with an income tax deduction. However, the deduction is subject to limitation and rules which reduce the amount, depending on the type of charitable recipient and the type of asset gifted. Your financial advisor will help guide you through the tax implications of each giving strategy, including which assets may be preferred for the gift itself.

1 Giving USA 2015,
2 The 2016 U.S. Trust Study of High Net Worth Philanthropy, Charitable Practices and Preferences of Wealthy Households, Collaboration between U.S. Trust and Indiana University Lilly Family School of Philanthropy, 2016.
3 Charitable Giving Statistics, National Philanthropic Trust,