How Best to Give?

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retire57
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How Best to Give?

Postby retire57 » Fri May 19, 2017 11:00 am

Is it best to donate to a charity with one lump sum (say, a check at the end of the year), in monthly increments, or through Amazon? Our charity has a 'supplies needs' list on Amazon.

By best, I mean for both the charity and ourselves. We don't itemize at this point.

Note: when SS kicks in to give us an additional income stream, we plan to set up a Donor Advised Fund. But ... until then?

letsgobobby
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Re: How Best to Give?

Postby letsgobobby » Fri May 19, 2017 11:18 am

You don't itemize so the only concern from your standpoint is really how much, and how your gifts impact your cash flow.

From the charity's standpoint, a regular, dependable contribution is more valuable than an unplanned for lump sum. They have to manage their cash flow, too. re: Amazon, ask the charity if they prefer $20 in Amazon supplies monthly, or $20 in cash monthly. They'll tell you.

re: your last comment, setting up a DAF is best done with highly appreciated securities. The advantage of doing so has little to do with current income other than the tax deduction of the contribution, but you don't itemize so that doesn't seem relevant. I'm not sure why you linked setting up a DAF with SS income.

mouses
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Re: How Best to Give?

Postby mouses » Fri May 19, 2017 11:24 am

retire57 wrote:Is it best to donate to a charity with one lump sum (say, a check at the end of the year), in monthly increments, or through Amazon? Our charity has a 'supplies needs' list on Amazon.

By best, I mean for both the charity and ourselves. We don't itemize at this point.

Note: when SS kicks in to give us an additional income stream, we plan to set up a Donor Advised Fund. But ... until then?


If it's a local charity, so you are in contact with the people there, and you plan on an annual lump sum, I would tell them so they don't think you may be contributing more that year.

I donate 4 times a year, keeping track so that each year I donate slightly more that the previous year to each one. I donate cash, but if they post that they really need X, I will buy some of it locally or from Jet so they don't have to go shopping, nice if it's pounds and pounds of kitty litter. More and more I am buying stuff from Jet, because they deliver like the wind while amazon can literally take weeks for us non-Prime people.

retire57
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Re: How Best to Give?

Postby retire57 » Fri May 19, 2017 11:27 am

letsgobobby wrote:You don't itemize so the only concern from your standpoint is really how much, and how your gifts impact your cash flow.

From the charity's standpoint, a regular, dependable contribution is more valuable than an unplanned for lump sum. They have to manage their cash flow, too. re: Amazon, ask the charity if they prefer $20 in Amazon supplies monthly, or $20 in cash monthly. They'll tell you.

re: your last comment, setting up a DAF is best done with highly appreciated securities. The advantage of doing so has little to do with current income other than the tax deduction of the contribution, but you don't itemize so that doesn't seem relevant. I'm not sure why you linked setting up a DAF with SS income.


Thanks for your response. Your view from the charity's perspective makes sense.

The DAF is linked to future income because I want to be sure we have enough cash coming in to fund our retirement before committing $25,000 (if we use Vanguard's DAF product) from our retirement funds to the DAF. The 25K would come from a taxable account containing mutual funds that we have owned for many many years. Is my rationale rational?

aristotelian
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Re: How Best to Give?

Postby aristotelian » Fri May 19, 2017 11:40 am

Depends on the nature of the charity. If you are helping respond to a natural disasters, they need the money now. If you are endowing a scholarship it doesn't matter. If you want to help with operating expenses, gradual might be best.

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Taz
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Re: How Best to Give?

Postby Taz » Fri May 19, 2017 2:05 pm

aristotelian wrote: If you want to help with operating expenses, gradual might be best.

Good advice. Some organizations such as churches publish the total amounts received for the week/month (although not the names) which may result in others reducing their giving if budget vs. income for that particularly year would seem to be healthier than normal because of a one time gift.

A note to the bookkeeper of your intentions if the gift stream is more than nominal would help the leadership in their planning so they don't start spending like a young sailor with two month pay advance.
The destination matters.

aristotelian
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Re: How Best to Give?

Postby aristotelian » Fri May 19, 2017 2:13 pm

retire57 wrote:
letsgobobby wrote:re: your last comment, setting up a DAF is best done with highly appreciated securities. The advantage of doing so has little to do with current income other than the tax deduction of the contribution, but you don't itemize so that doesn't seem relevant. I'm not sure why you linked setting up a DAF with SS income.


The DAF is linked to future income because I want to be sure we have enough cash coming in to fund our retirement before committing $25,000 (if we use Vanguard's DAF product) from our retirement funds to the DAF. The 25K would come from a taxable account containing mutual funds that we have owned for many many years. Is my rationale rational?


That does make sense but note that Schwab has a minimum of only $5,000. If you would like to use appreciated assets through a DAF but you don't feel comfortable with a $25K minimum, just don't use Vanguard.

letsgobobby
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Re: How Best to Give?

Postby letsgobobby » Fri May 19, 2017 2:53 pm

aristotelian wrote:
retire57 wrote:
letsgobobby wrote:re: your last comment, setting up a DAF is best done with highly appreciated securities. The advantage of doing so has little to do with current income other than the tax deduction of the contribution, but you don't itemize so that doesn't seem relevant. I'm not sure why you linked setting up a DAF with SS income.


The DAF is linked to future income because I want to be sure we have enough cash coming in to fund our retirement before committing $25,000 (if we use Vanguard's DAF product) from our retirement funds to the DAF. The 25K would come from a taxable account containing mutual funds that we have owned for many many years. Is my rationale rational?


That does make sense but note that Schwab has a minimum of only $5,000. If you would like to use appreciated assets through a DAF but you don't feel comfortable with a $25K minimum, just don't use Vanguard.

Fidelity also has the lower $5000 minimum.

I just wanted to make sure you weren't counting on SS income to make your donations tax deductible, as SS income is often untaxed completely or taxed less than regular income (depending on the rest of your financial picture).

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Artsdoctor
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Re: How Best to Give?

Postby Artsdoctor » Fri May 19, 2017 5:26 pm

As mentioned above, you don't have to go with Vanguard Charitable. The minimums at Fidelity and Schwab are more manageable.

If you don't itemize but you'd still be paying capital gains tax, you can donate appreciate shares directly to the charity of your choice. Many charities have Vanguard accounts and transferring over shares can be relatively easy.

Most charities would love to have a steady stream of income although any type of donation would be welcome by most reasonable charities. You can pledge $X over 5 years and donate your appreciated shares each year to them. That would probably be "the best" since the charity gets a commitment and steady stream, and you donate your appreciated shares which you would have paid capital gains tax on--and there's no need for a DAF.


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