The African proverb, “It takes a village” was made famous by Hillary Rodham Clinton, in her book by the same name published in 1996. This year, our families third year on the island, I am again struck by the ingenuity and generosity of our island community. I have met and worked with so many amazing people who know no limits. Whether the cause is finding a cure for breast cancer, building resources for the special needs community, funding research to prevent premature births or building a new church, our community has a can-do attitude that anything is possible. I am now convinced that if you want something done “it takes an island”, Daniel Island that is.
Charity is essential to our community’s existence. “Giving back” is a way for many of us to help others that are less fortunate, or to advocate on behalf of a cause that is near and dear to our hearts. Regardless of the reason or your interests, there is certainly no shortage of charities to support. In fact, the number of charities can be extremely overwhelming! At the end of the day, giving to a charity allows us to do good for the cause and also, provides us with financial incentive to do so: it’s what I call a win-win.
So how do you decide who to give to and when? The key to giving is to develop a plan. Once you have determined that you are in a position to give, and your giving is something that will take place on a regular basis, you must plan your giving. Treat your charitable donations as if they were a business transaction. If philanthropy is an important part of your life, these steps will hopefully help you understand and manage your giving both from the heart and the mind.
Budget. The key to any successful plan is to start with a budget. What is your annual giving budget? Most people give when they are moved or when someone catches them at a party and makes a pitch. This is reflexive giving, equivalent to impulse buying. There is little thought to your purchase or its impact on your budget. Make it a point, at the start of each year, to develop a budget than includes planned giving. When a request for giving falls outside of your budget, it will be easier to say no, if you simply can’t afford to do so.
Understand the tax benefit. Tax exempt does not always mean tax deductible. If it matters, make sure your donation is considered a “qualified donation”. Donors can deduct qualified donations that total up to 50% of their adjusted gross income. The tax benefit also reduces the cost of the donation. For example, for someone who is in the 30% tax bracket a $100 donation will only cost them $70.
Know your Charity. Who is it that your money is helping and how? Do your due diligence; understand where your dollars will go, how they will impact your cause and how the donations will impact you. A great resource is CharityNavigator.com.
Always obtain a receipt. Without a receipt, there are no tax deductions.
Estate. It’s never too early to begin thinking about charitable giving through your Estate Plan —either through an outright gift, retirement asset donations or through a trust; there are many ways to leave a legacy.
With so many amazing charities right here on our doorstep, giving local is also very important to many people. Remember, with the help and support of our Island, anything is possible, just please progress with a plan.