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“We feel like we could give more to causes we care about if we knew what we needed to take care of us and our family.” For Big Givers we work with, it’s one of the first issues we’re often asked to address. A clear financial plan brings confidence to make big gifts.

Here’s another common statement we hear from charity and non-profit directors: “When the economy takes a turn, our giving tends to dry up quickly.” Uncertainty comes in many forms. The COVID-19 pandemic is the most recent reminder, but it can take a more personal form, like family tragedy.

We all fear uncertainty to varying degrees, but in times like these, many Big Givers are particularly nervous. When primarily using wealth to support causes you care about, it’s natural to wonder “Are we going to be ok?” “What if we need those funds?” “Can we continue with these large gifts?” First, we should acknowledge that these concerns are normal. Then, we can ask two key questions back.

Experience is not what happens to you;
it is what you do with what happens to you.
-Aldous Huxley

What does my plan say?

The big question here is, “Am I going to run out of money?” A 2018 US Trust study of high net-worth philanthropy showed that over 50% of clients do not have a charitable giving strategy, which should include a comprehensive financial plan. Without a plan, it’s nearly impossible to answer this question.

But, if you do have a plan, your advising team can show you if there’s cause for concern and a need to alter your giving strategy. It may sound too simple, but a plan like this is the only way to find out if your concerns reflect reality.

How can I balance impact and flexibility?

Many believe planning for big giving means giving up all access to gifted assets, and they may not feel ready for that kind of undertaking – especially with so much uncertainty. But this is a variable within your control. You can choose strategies that match your desired balance of impact and flexibility. Here are a few examples:

  1. Give funds along the way through a Donor Advised Fund. This lets you transfer in shares of stock and sell with no capital gain tax, increasing the impact of your gift. This is a great strategy to consider for anyone with highly appreciated stock or company stock-based incentive plans. You receive a deduction when you make the contribution but can give the funds whenever you’d like. This leads to the next strategy.
  2. Consider funding your Donor Advised Fund for multiple years up front. This is a great strategy for anyone close to the line between tax brackets or standard and itemized deductions. Let’s say you plan on giving $50,000 per year. If you gave $150,000 in one year – or three years of planned giving – to your Donor Advised Fund, you’d get to deduct that up front (subject to your total income – consult your tax pro), then give it over multiple years.
  3. If you plan on leaving a large gift after you’ve passed away, consider making a gift to a Charitable Remainder Trust now, instead. The trust can pay you an income stream for the rest of your life, leaving the remainder to charity. It also provides an upfront tax deduction which would be lost otherwise if the gift is given after you’ve passed.
  4. Want to gift your house to a charity after you’ve died? Consider giving it to a charity now with a “life estate” arrangement. You’ll be able to live in the home for the rest of your life but receive a tax deduction today. Because it guarantees them a gift down the road, they may even agree to pay your property taxes along the way!
In all things, communicate with your team.

Even with the best laid plans, you should expect fear and anxiety to creep up occasionally. We’ll always wonder “Is this time different?” This is a great time to reach out to your team. The real work of planning is not building the plan, it’s sticking to the plan. Your team of Financial Advisors, CPAs and attorneys can listen to your concerns and help determine if you’re still on track or if your strategies need to change – it’s why we’re here!

Behind all this planning is a generous heart – Big Givers want to serve those in need. If those of us with resources are affected by all the uncertainty, it’s not hard to imagine the burden on those who were struggling already! Concerns about uncertainty are important to consider, but good planning should help you acknowledge, assess, and act, enabling you to return your focus to impacting causes you care about.

Alterra Advisors - Josh Whelan

Zach Hamilton

Financial Advisor

About the Author

Zach graduated from Gonzaga University with degrees in Marketing and Finance. While growing up, Zach heard stories from his grandfather about his work as an insurance agent, and other stories from his dad who was an investment manager. They both spoke financial “languages” but had completely different dialects. Recognizing the breadth of the financial vocabulary ultimately led to Zach’s passion for financial planning. He credits his family for this enthusiasm. Zach sees his time with clients as an opportunity to translate all of the different – and often confusing – information they’ve heard and provide clear guidance for each unique situation.

Zach enjoys working with people – his clients – who also appreciate that their financial decisions have an impact not just on themselves, but also on their families, charities and their own life legacy. Many of Zach’s clients have a strong desire to “make a difference”, and they rely on his financial expertise to magnify their philanthropic goals.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.