An often-cited philanthropic goal among charitable-minded individuals is to develop a lasting impact that will live on after they are gone. Whether that means instilling in your children and grandchildren a tradition of giving, or developing a means of perpetual giving to continue your charitable habits after your time on Earth has passed, having the ability to make a financial difference and creating a legacy of giving can easily be accomplished by starting a Donor-Advised Fund (DAF).
Donor-Advised Funds (DAFs) have been the fastest growing philanthropic vehicle for the past five years. One of the main reasons for their popularity is their ease of use. Many advisors describe DAFs to their clients as philanthropic savings accounts. Once the assets are given, the tax deduction can be made right away and the fund holds the charitable gift until the donor recommends grants to qualified charities.
Sifting through the new tax laws to find potential deductions can be tricky. While the standard deduction has increased for individuals, deductions for qualified business owners can be a little more complicated because of the new Qualified Business Income Deduction (QBID) introduced at the beginning of 2018.
Now that your taxes are filed or you’ve filed an extension, the thought has probably crossed your mind about how you could ease the pain of that tax bill next year. RenPSG has several philanthropic tools to help take some of the teeth out of the tax bite. Here, we will share with you the different gift types we can help you to establish and how they may help you cut your tax burden as well as reach your philanthropic goals.
Recently, I attended the Alliance for Charitable Reform Summit for Leaders in Washington, D.C. and I came away with many thoughts for the near future of philanthropy. While there is still a lot to unravel from the recent passage of the Tax Cuts and Jobs Act of 2017, the shift in charitable giving is already being felt in the industry. I’ve been reading a lot of articles that have both positive and negative impacts on donors and charities and wanted to summarize my thoughts here.
It’s no secret, if your business is not growing, it will soon be extinct. In a recent Forbes Magazine study of 803 financial advisors, 91% of them cited their number one concern as how to grow their asset base. It makes sense, we all know what happens to our client’s portfolios when they pass away, or when clients need cash flow at retirement, or one of the myriad reasons assets go out the door. What makes pursuing new assets more challenging is that 88% of those surveyed reported there is intense competition for wealthy clients. There is not only the efficiency of more assets per individual, but there are more options to generate revenue from non-investment solutions.
In my previous post, I discussed how to properly evaluate the potential acquisition by a CRT of an illiquid position in a private equity investment, non-traded REIT, or limited partnership interest. Today, I will cover the other three areas I always advise clients to evaluate with illiquid gifts: self-dealing, valuation and liquidity.
I'm frequently asked whether a certain private equity investment, non-traded REIT, or limited partnership interest is a suitable investment for a charitable remainder trust (CRT). My response is a resounding, “Maybe!” With any investment other than cash, a security traded on an exchange, or an investment such as a mutual fund for which a daily net asset value (NAV) is available, there are five specific areas of concern I advise a client (or their advisor) to evaluate:
For many reasons, the private foundation has been the preferred charitable giving vehicle of the wealthy. Among these reasons are the ability to: (i) retain control by choosing the board, (ii) compensate family members for their services, (iii) retain control over grantmaking; and (iv) retain control over investment decisions.