Now that the holidays are behind us, we have all turned our attention to 2019. For some, this includes acting on New Year’s Resolutions. For others, it’s a time to assess what worked best in 2018 and what to improve in 2019. These decisions are playing out against a backdrop of uncertainty – in the financial markets, in the operation of the federal government, and in the impact of the changes in federal tax law. The uncertainty can make setting a charitable giving budget challenging.
We’ve written here before about strategies to maximize your charitable giving in light of the higher threshold for the standard deduction that a taxpayer can deduct from their income each year if they choose not to itemize. What are other ways to manage through the uncertainty of the new year?
Plan for the unexpected:
Increasingly, donors are setting aside a portion of their charitable giving budget each year for disasters or emergencies. In recent years, these have included natural disasters like the devastating hurricanes in the Caribbean or the wildfires in California. In early 2019, some donors used these charitable dollars to aid government workers impacted by the shutdown of the federal government. Whatever the issue, planning for these emergency needs, even if they represent a relatively small portion of your giving budget, can help donors feel like they don’t have to reduce their giving in one area that is important to them to be responsive as new needs emerge. It can help address immediate need while not pulling donors off their anticipated giving course. Read more about disaster giving here: How to Help Neighbors and Communities in Time of a Natural Disaster.
Consider the full spectrum of generosity:
As we all know, generosity goes far beyond your charitable giving. You may be generous with your time, volunteering on a nonprofit board, serving in a volunteer capacity in local government, or with your children’s school. You may provide support for students who are in need of financial or other types of support to get an education or launch their careers. You may be launching a business or purchasing real estate to help further a social or community need. All of these decisions can help you calibrate your total generosity index. It can also help guide your choice of philanthropic vehicle, ranging from direct giving to more deliberate structures like donor advised funds, charitable trusts, foundations, or LLCs. Read more about How to Allocate Your Charitable Giving.
Let your passion lead you:
You can find joy in more than cleaning out your closets. What if you took all the buzz around Marie Kondo’s approach to organizing your life and applied it to your giving? What in your giving “sparks joy”? Many donors choose to reserve a portion of their giving budget each year for projects, issues, or organizations that spark their interest and their curiosity. In this case, uncertainty can lead to fulfillment and not distress.
We hope that the new year brings you fulfillment, a renewed sense of purpose, and joy.
About the Author:
Gioia Perugini is Associate Director, Family Office and Philanthropy Services at Hemenway & Barnes. She works with individuals, families, advisors, charitable trusts and foundations to provide a range of philanthropic and client services. Read Gioia’s full biography.