The end of the year is the time for holiday cheer, family and truthfully major stress! Everyone is usually fretting over holiday details. In fact, I am certain that year-end stress is to blame for my weight gain; it has nothing to do with holiday over-eating!
Self-delusion on eating habits aside, the new year really is an opportunity to review what we achieved in the past and to get an early start on planning future goals. One reason to consider planning earlier would be the goals for the charitable missions we believe in. We often wait until the last minute because, after all, “we have all year” and procrastinating can actually diminish the benefits for them and for us! I promised not to use names, but I want to share why I am inspired to write about the benefits of planning early.
This past year I had the absolute pleasure of working with an amazing husband-and-wife team who set their goal to establish a fund here at Schoolcraft and provide for the Veterans Resource Center. While their initial vision was to provide scholarships, they were also aware that other unexpected expenses can jeopardize the educational success of a student who has served our country. By beginning their planning discussions early in the year, there was time to really research various ways to have the greatest impact on the needs of a veteran and/or their family.
The results are a fund that will provide not only scholarship, but also contains an emergency need component for unexpected financial concerns, as well as a designated room for study or group meetings. To complete the goal, the next step was to determine the best way to fund this dream.
Effective planning focuses on three key elements: the donor’s charitable intent, their personal financial goals and appropriate tax benefits generated for their generosity. The best philanthropy is thoroughly thought out, no matter what the dollar amount, so that it benefits all parties concerned and is completed long before midnight on Dec. 31. My donor friends began planning shortly after the first of the year and considered various options to fund their goal. They decided that the right option for them was a blended gift utilizing the IRA charitable rollover provision and using their required minimum distribution (RMD) to make a qualified charitable distribution (QCD). Strategically, this was a very wise path for them.
Since they did not need the RMD from their IRA personally, it made excellent sense to use their distribution to make a QCD to Schoolcraft. Doing this, they reduced their taxable income liability for the year, while also reducing the out-of-pocket expense for their Social Security benefits. Being strategic helped them generate the philanthropic capital to make their gift and some excellent personal benefits. Now that’s a win-win!
Sharing this story is important because we American donors still tend to reach for wallets or purses to make charitable gifts, which is perfectly fine for quick or very last-minute contributions. Yet when the intent is to create a long-term or lasting goal, it is wise to plan with your financial, legal and tax advisors involved in the discussion. They can advise on what appreciated assets to gift that will achieve the best personal and charitable results. This is why I’m suggesting that everyone begin their overall planning early so that next year’s holidays will be less stressful, at least where financial and charitable planning are concerned. That leaves more time for family, and of course, holiday food!
Learn how you can support the Schoolcraft College Foundation and its mission. Contact Dawn Dyer Magretta, CFRE at 734-462-4619 and dmagrett@schoolcraft.edu to learn more.