Your financial life should be aligned with your goals and values to have the most impact on what matters most to you. Often, folks concerned with wealth management in St. Louis, Missouri think about assets (such as stocks and bonds) or life events (such as retirement) when thinking about financial decisions.

But for many, a crucial part of your financial life is contributing to your community through the filter of your personal values. Therefore, Charitable giving for wealthy individuals is often a large part of that objective when viewed as broader than writing a check to a worthy cause. Charitable giving should be purposeful to achieve maximum impact, both for your life and the charities to which you’re giving. 

What does purposeful giving mean? It means that the giving is designed to support your goals and values, maximize tax efficiency, and leave a legacy that unites generations.

Learn more about wealth management and pursuing financial prosperity in our useful guide!

How To Approach Purposeful Giving

What’s the best and most comfortable way to approach purposeful giving? It’s very similar to other aspects of your financial life. First, think through what beliefs, values, institutions, or causes matter to you the most. Is it your church, a hospital, or a particular charity? Causes can be local, regional, national, or worldwide, and range from faith-based to historical preservation to funding medical research. 

Second, consider which non-profit institutions also support those beliefs, values, or causes and select the ones that you connect with the most. Third, there are several ways to establish purposeful giving. You may give to an existing institution (or several) in an automated ongoing basis. Or, you may make determinations periodically, reviewing your charitable interests after a designated period. Some families choose to set up a trust or foundation devoted to causes they want to be involved in. 

Maximizing the Financial Impact

Purposeful giving is designed to benefit others, but it benefits you and your family as well. Your purposeful giving can maximize tax efficiency in several ways. First, contributions to many charitable nonprofits are tax-deductible from your annual income. Second, you can reduce capital gains taxes by donating appreciated securities to a charitable nonprofit that has an appropriate designation from the Internal Revenue Service (IRS).  Third, you can reduce other types of taxes, such as estate taxes while sheltering your income.  Fourth, you can design a matching gift program which compounds the value of your giving.

Establishing Your Legacy

Purposeful giving provides you and your family with strategies that can be multigenerational, establishing a lasting legacy and impact in your community. It can be an opportunity not only to benefit successive generations financially, but to work with them on issues important to you and your family. Discussing your values and prospective charitable plans with your family members can be a rewarding way to spend quality time with your children, grandchildren, and great-grandchildren as well as benefit the community.

Purposeful Giving Strategies

It’s prudent to discuss purposeful giving strategies with a financial advisor. At Trinity Wealth Advisors, we can assist you with multiple strategies, depending on your goals and values. Here is a brief description of some of those potential methods.

Donor-Advised Funds (DAFs)

A DAF is a fund specifically designed to manage charitable donations. You can do ad hoc donations or contribute for one year of gifting or multiple depending on your tax situation.  Gifts can be cash and cash equivalents or assets such as stocks and bonds or real estate. All of these are tax deductible, but appreciated assets get a double benefit as capital gains taxes are avoided. Money that resides in the DAFs can then be gifted to a vast universe of charities in a simple automated way.  

Gifting Directly to Charitable Nonprofits

Choose nonprofit charities you want to support, then gift (contribute) cash, stock, other securities or real estate to lessen your taxes and provide the charity with financial support. When working with individual non-profits, it is often more fulfilling to get involved with that charity on a volunteer basis in addition to providing funding.

Qualified Charitable Distributions (QCDs)

By age 73 you are required to take required minimum distributions (RMDs) from your tax-advantaged retirement accounts such as traditional Individual Retirement Accounts (IRAs) or face steep tax penalties. To both meet this Federal requirement and decrease your tax burden, you can make charitable gifts directly from your IRAs in the form of QCDs to the charities.

Charitable Remainder Trusts (CRTs)

CRTs provide both tax deductions and income at different times in the life of the CRT. First, you may contribute cash or stock, as well as real estate or private company stock and receive a tax deduction. After the contributions, CRTs provide you (or a designated non-charitable person) with income for a specific, designated period of time. After that period, the remainder of the contribution is given to a charity, which can be either a public one or a private foundation.  

Charitable Lead Trusts (CLTs)

In a CLT, your contribution is set up to provide a designated charity with periodic contributions for a certain number of years or the duration of the life of an individual (or individuals). After that period is over, however, the remaining assets leave the charity and revert to a designated beneficiary, who can either be you or someone else such as a family member. CLTs benefit both the designated charity in a strategically managed way as well as help you reduce estate taxes. 

The Trinity Wealth Advisors Difference

We are financial advisors in St. Louis, MO. Trinity Wealth Advisors differs from other financial advisors in several key ways. First, we seek to live out our Judeo-Christian values in all aspects of our business. Second, we offer a team approach focused on achieving your most heartfelt goals. We support you in all aspects of your financial life by providing specialists in investments, financial planning, taxes, legal matters, estate planning, charitable giving, and risk (insurance).  Third, unlike most financial advisors, we do not utilize proprietary money management strategies or our own investment products.  Instead, we utilize institutional managers with proven track records so we can concentrate on helping you and your family achieve your goals.

We Are Full-Service Financial Advisors 

At Trinity, we offer a team of financial professionals with an average of 25+ years of experience in St. Louis, MO wealth management. All of our partners are CERTIFIED FINANCIAL PLANNER™ Professionals, a designation that mandates a high level of knowledge and experience. We focus on wealth enhancement, wealth sustainability, wealth protection, wealth transfer, and charitable giving. We will always put your best interests ahead of our own. 
Contact us to discuss purposeful giving as part of your overall comprehensive financial plan.