Paragon Perspectives: Giving Back Without Going Broke: A (Somewhat) Serious Guide to Charitable Giving Strategies
Ah, charitable giving. It’s like exercise—you know it’s good for you, but sometimes you’d rather sit on the couch and binge-watch your favorite show. Don’t worry, we’re here to help you feel good about giving without sacrificing your Netflix subscription. Let’s talk about how to give back while also keeping your finances in tip-top shape. Yes, it’s possible to save the world and save on taxes—who knew?
Why Giving Strategically Makes You a Financial Genius
Sure, donating is about kindness, community, and being a decent human being. But let’s not forget: it can also be a brilliant financial move. Whether you’re eyeing that tax deduction or just trying to impress your accountant (trust us, they’ll love you for this), giving strategically lets you do good while being smart.
For starters, charitable donations can lower your taxable income. That’s right—by helping others, you could owe less to Uncle Sam. We call that a double win. Plus, certain giving strategies can help you avoid capital gains taxes or reduce the size of your taxable estate. It’s like giving yourself a financial high-five.
The Donor-Advised Fund: Philanthropy’s Secret Weapon
Here’s a fun fact: you don’t need to be a billionaire with a foundation to feel fancy. Enter the Donor-Advised Fund (DAF), your personal giving hub. Think of it as a charitable piggy bank. You contribute assets—like cash, stocks, or even that weird Bitcoin your cousin told you to buy—and get an immediate tax deduction. Then, you can sit back and decide which charities get the funds. It’s like being Santa Claus, but with spreadsheets.
Why do we love DAFs? They let you spread out your giving over time, so you’re not scrambling to write checks every December 31. Plus, you can invest the funds and let them grow, which means more money for your favorite causes—and less stress for you.
Wait, I Can Donate What?
If you thought charitable giving was limited to cash, think again. You can donate appreciated assets like stocks, real estate, or even that rare comic book collection gathering dust in your attic. (Okay, maybe not the comic books unless they’re worth a small fortune.) By donating assets instead of selling them, you avoid capital gains taxes and maximize your impact.
It’s like finding out your favorite pizza place delivers free breadsticks—you didn’t expect it, but now you can’t live without it.
Leaving a Legacy: It’s Not Just for Superheroes
You don’t need to wear a cape to leave a legacy, although it would be pretty cool. If you’re thinking long-term, there are plenty of ways to make sure your generosity lives on. You can name a charity as a beneficiary in your will, create an endowment, or set up a charitable remainder trust (CRT). A CRT is especially nifty because it provides income for you or your heirs during your lifetime and then donates the remainder to a charity.
Think of it like planting a tree—you enjoy the shade now, and future generations get to bask in its glory. And hey, fewer taxes for your heirs means fewer eye rolls when they hear you talk about “estate planning” at Thanksgiving dinner.
Giving Now vs. Later: A Showdown
Here’s a question we hear a lot: Should I give during my lifetime or after I’m gone? The answer is, “Why not both?” Giving now means you get to see the impact of your generosity (and maybe snag a nice tax break). Giving through your estate ensures your legacy lives on and can reduce estate taxes.
If you ask us, it’s like choosing between dessert and coffee—you could pick one, but it’s so much better to enjoy both. Plus, you’ll feel like a financial wizard, and who doesn’t want that?
Ready to Start Giving (and Saving)?
Charitable giving doesn’t have to be complicated—or boring. With the right strategy, you can make a meaningful impact while also making the most of your finances. Whether you’re setting up a Donor-Advised Fund, donating assets, or planning a legacy, there’s a strategy that fits your goals.
Not sure where to start? That’s where we come in. At Paragon Wealth Management, we love helping people turn their generosity into something extraordinary. So give us a call, send us an email, or stop by. You can reach me at 215-348-3176. We promise to make charitable giving feel less like homework and more like a win-win.
Because giving back shouldn’t mean breaking the bank—or your brain.
About Charlie
Charlie McNamara is a veteran of the financial services industry. Since 2000, Charlie has brought an extraordinary level of knowledge and experience to the financial field. After obtaining a business finance degree from Delaware Valley University, he began his career as a financial advisor with Prudential Financial in 2001 and was promoted to management in only three years due to his hard work and dedication.
Born and raised in Doylestown Borough, Charlie is married to his wife, Lisa, who is co-owner of the local salon Moxie, and is a proud father to his daughter, Carissa, along with two dogs and a cat. He enjoys weightlifting, running, golfing, fishing, and giving back to the community through his church, Our Lady of Mt. Carmel, and local organizations such as the Travis Manion Foundation.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Any securities mentioned here are for informational purposes only and are not recommendations to buy or sell any security.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.
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