In this month’s Waccamaw Wisdom, Karen Minogue provides advice about how to build your personal and/or professional philanthropic legacy through your business. Suggestions for future topics are always welcome at email@example.com.
According to the 2017 U.S. Trust Insights on Wealth and Worth survey, 72% of business owners and employees actively support nonprofit organizations and causes. Often, the same business owners most skilled at creating successful businesses wed that skill with their values and invest both time and money in working to address needs in their community.
Businesses and employees are invaluable to the philanthropic community through their service as strategic partners, donors, volunteers and/or board members. For those considering starting, building, or transitioning a business enterprise, philanthropy might contribute to the success and personal fulfillment that they experience along the way. It’s also an opportunity to infuse mission into a company’s culture and to achieve your personal legacy goals.
A Business Culture of Philanthropy
Many owners envision their business supporting their families as well as the causes and organizations that reflect their values. This can take many forms that range from company endorsement of employee volunteerism, to the creation of a formal corporate philanthropy program. Sometimes business owners sponsor charitable events and volunteer activities or establish matching gift programs for employee donations. The mission of the organizations that businesses are affiliated with can help communicate the value that a company places on giving back. Some companies even draw up a formal mission statement of their own to guide philanthropic activities.
Any level of philanthropic engagement can have a positive impact on you, your employees, your business, and community. Corporate philanthropy may also create tax efficiencies for you personally or for the business.
Your Personal and Professional Legacy
We at Waccamaw Community Foundation encourage families and businesses who are charitably inclined to consider thinking through:
- Personal and family history
- Values and charitable interests
- The current and future state of their businesses, if applicable
While some individuals and business owners prefer the ease, spontaneity and focus of direct giving that comes with writing a check or offering a one-time gift of stocks, many donors are turning to a structured charitable giving vehicle as part of a deliberate strategy to help marry their giving with their personal values. This can be a way to bridge generations and unite family members around common causes and shared charitable goals.
Two Ways to Gain a Higher Return on your Company’s Charitable Assets
Donor Advised Funds
Donor Advised Funds (DAFs) appeal to business owners who want both tax advantages and a degree of decision making over where their money goes. Opening a Donor Advised Fund allows your company to make a gift to your community foundation, then remain actively involved in suggesting uses for your gift. It takes just $10,000 to get a Fund started with Waccamaw Community Foundation.
Here’s how a DAF works…
- Your company makes a gift to Waccamaw Community Foundation.
- We set up a special fund in your company’s name. You may make contributions to this fund as often as you like.
- The year your gift is made, your company receives tax benefits.
- You or a team of employees may recommend uses for the fund – working with Waccamaw Community Foundation’s professional program staff to support the causes and organizations you care about most.
- Your grant recommendations are presented to the WCF board for approval.
- We handle the administrative details and issue grants to charities from your fund. Should you prefer, grants can also be made anonymously.
- Your gift can also be placed into an endowment that is invested over time. Earnings from your fund are then used to make grants to organizations addressing community needs. Your gift and all future earnings from your gift then becomes a permanent source of community capital, helping to do good work forever.
Charitable Lead and Remainder Trusts
Charitable trusts can also enable business owners to support charitable causes while at the same time addressing personal tax, income or estate needs.
Charitable lead trusts can help pass assets to heirs at a reduced valuation for gift and estate tax purposes while supporting grants to charities during the life of the trust.
Charitable remainder trusts provide a stream of payments to the individual, business owner or any individual they select during the life of the trust and at the end of the trust, the remaining assets go to charity.
Questions to Consider as you Plan Your Personal and Corporate Philanthropic Journey
- What are your corporate values and how might those values tie to causes you care about?
- Which of your business or leadership skills might you apply, whether in giving, volunteering or participating on a board?
- Is it important to you to give back to the communities that helped you succeed?
- Is it important to you to incorporate philanthropy into your business culture?
- Do you want your personal giving tied to, or separate from, your corporate philanthropy?
To Learn More
Give us a call if you would like to learn more about the many different ways you can create a custom gift and leave a legacy. We make it easy to achieve your personal and corporate charitable goals.
Get in contact with Karen Minogue at (843) 357-4483 or email her at firstname.lastname@example.org.
This blog does not provide legal or tax advice. Consult your independent attorney, accountant and tax advisor before implementing any financial, tax, or estate planning strategy.