At PAX Financial Group, we encourage all our clients to discuss with their families how they can work together to make a meaningful impact on the world—financially, spiritually, and practically.
Whether you’re just starting to explore charitable giving or want to establish a specific philanthropic giving strategy, we’d like to present you with six strategies that can foster communication and incorporate charitable giving into your financial planning strategy.
1. Start with a Family Values Discussion
Every successful philanthropic plan begins with a family’s conversation about values. Gathering your family to discuss what matters most to each member can help identify shared priorities.
Whether conservation, education, or faith-based causes resonate with everyone, you or others in your family may have personal causes they care deeply about, such as supporting local food banks or funding medical research for a disease that runs in your family.
A San Antonio financial advisor can guide your family through these discussions, helping you define values and refine them into actionable gift-giving goals. Families can create a unified philanthropic mission that reflects their collective vision by focusing on their shared beliefs.
Listen to our newest podcast, “Your Financial FAQs: Essential Money Tips for Every Stage of Life.”
2. Incorporate Philanthropy Into Your Financial Planning
Charitable giving isn’t just about writing checks—it’s about creating a long-term strategy that aligns with your philanthropic and financial goals. Working with a San Antonio CFP ® who understands your goals and financial planning priorities can make this process more productive.
For instance, consider using tax-advantaged tools such as donor-advised funds (DAFs), charitable remainder trusts (CRTs), or qualified charitable distributions (QCDs) as part of your philanthropic strategy.
These tactics can reduce taxes while maximizing the impact of your contributions, which benefits the charities you support and ensures your family’s legacy when you give back.
3. Engage the Next Generation
Involving younger family members in charitable discussions is a powerful way to pass on your values and teach financial responsibility. Consider setting up a family-giving fund where children or grandchildren can suggest causes or organizations they want to support. This hands-on experience can inspire them to think critically about the impact of philanthropy and the importance of aligning gift-giving with their values.
When younger generations are included in these discussions, they’re more likely to continue the family’s legacy of giving later in life.
4. Set Clear Goals for Gift Giving
Once you’ve identified your family’s philanthropic values, the next step is setting clear goals. Determine how much of your family’s resources—time, money, or assets—you’d like to dedicate to charitable giving.
For some, this might mean committing a specific percentage of their annual income. For others, it could involve establishing a trust or foundation to support chosen causes on an ongoing basis.
Setting measurable goals provides clarity and fosters accountability among family members. For example, a family may decide to support a local hospital with an annual grant or fund a scholarship at a local university. Working with a charitable giving financial planner in San Antonio can help you develop realistic, impactful strategies and track their progress over time.
5. Leverage Tax-Advantaged Giving Strategies
Philanthropy and financial planning go hand in hand, particularly when leveraging tax-advantaged giving strategies. Tools like donor-advised funds can allow you to make a significant charitable contribution, receive an immediate tax deduction, and distribute the funds to your chosen charities over time. Similarly, charitable remainder trusts and other vehicles can help you minimize taxes while providing an income stream for your family.
If you’re already retired, you may consider qualified charitable distributions (QCD) from an IRA, which can reduce required minimum distributions and lower your taxable income.
If you are 70½ or older, you can donate directly from your IRA to a qualified charity up to $100,000 annually without counting the distribution as taxable income. This strategy is beneficial if you must take Required Minimum Distributions (RMDs) from your IRA because the QCD can satisfy the RMD amount while reducing your taxable income.
QCDs are a tax-efficient way to support charitable causes, especially for individuals who may not itemize deductions. The gift doesn’t require being claimed as a deduction to provide tax benefits.
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6. Review and Adjust Your Giving Plan Regularly
Like any financial plan, your family’s philanthropic strategy should evolve over time. Regularly reviewing your giving plan ensures it remains aligned with your values, financial situation, and the changing needs of the organizations you want to support.
Family circumstances—such as the birth of a new child, the sale of a business, or retirement—may impact your focus or resources. Similarly, nonprofits or causes may require additional support during specific periods, such as after natural disasters or economic downturns.
Consider working with the PAX Financial team, who can provide the guidance you need for your philanthropic plan to remain relevant and impactful.
Why Work with PAX Financial Group?
Creating a family philanthropic plan requires thoughtful consideration and a tailored approach. As financial advisors in San Antonio, we specialize in formulating charitable giving strategies inside financial plans, which can help you navigate the complexities of giving, from identifying tax-efficient strategies that impact your family’s financial well-being.
Formalize your philanthropic strategy by connecting with us today.
