Giving Thanks this Holiday Season
Thanksgiving is an excellent time to talk to family about philanthropy and meaningful gifting. Here’s a few ideas to get started.
Thanksgiving has always been an important holiday to me and my family. Though there are many reasons to celebrate, the fourth Thursday in November brings us around the table to share a turkey, trimmings, homemade pies, and lively conversations. Discussions can range from recent events to personal stories to our goals for the New Year. If you’re getting together in a group to celebrate this Thanksgiving, here are few ideas (and a fun challenge) to jumpstart the conversation about giving and gratitude in 2022.
The American Thanksgiving holiday was born in the 1500s to celebrate the fall harvests, but most Americans learn in grammar school that it began in 1621 when the Mayflower pilgrims sat down for a three-day meal with the Wampanoag. In 1863, amid raging battles of the Civil War, President Abraham Lincoln declared a national Thanksgiving Day be held each November. For many people, the day marks a time to be grateful and give thanks for friends, family, health, and homes.
Gratitude comes from the Latin word gratus, which means pleasing. This makes sense because gratefulness reflects our appreciation for kindness, gifts, help, favors, and other good fortunes that come our way. Our pause to reflect and express gratitude has therapeutic benefits as well. According to Martin Seligman, who introduced a field of psychology that he termed positive psychology in 1998, expressing gratitude can give us a psychological lift:
“When their week’s assignment was to write and personally deliver a letter of gratitude to someone who had never been properly thanked for his or her kindness, participants immediately exhibited a huge increase in happiness scores.”1
So, this Thanksgiving, keep in mind that gifting and gratitude come full circle: While it’s pleasing to receive gifts and acts of kindness, the act of showing gratitude and gratefulness can make us happier as well.
Americans doled out nearly $500 billion to charities in 2021.2 While acts of giving and kindness can be emotionally rewarding for both the giver and receiver, they can have tax benefits too. Here are a few ideas to consider if you’re in a giving mood this holiday season:
- Qualified charitable distributions (QCDs) are direct gifts from a qualified retirement plan to an eligible charity. If you’re age 70½ or older, you can donate up to $100,000 per year, and it sometimes counts as a required minimum distribution (RMD) once you turn 72.
- Estate planning through donor-advised funds (DAFs) is sometimes a tax-efficient option if you don’t have a secondary or contingent beneficiary listed on your retirement plan. DAFs are investment accounts designed to support a charity and are tax exempt. Distributions from most retirement plans are typically subject to income tax. However, there is no tax payable on the full amount of the retirement distributions that go to DAFs as gifts to charity.
- Put appreciated stock in a DAF. If an investor is holding shares of a company that might be subject to long-term capital gains tax, they can potentially avoid the tax liability and reduce their marginal tax rate by gifting the stock to a DAF. Doing so is more tax efficient than selling the shares, paying the tax, and gifting the rest to a charity.
- Charitable gifting to local charities has tax advantages. Individuals can deduct (on Schedule A as an itemized deduction) cash contributions to charities up to a percentage (in some cases up to 100%) of the taxpayer’s adjusted gross income (AGI). The percentage varies depending on the type of asset and the nature of the charitable organization.3
As financial advisors, we often help clients think through how to make an impact in their communities and do meaningful gifting to their families or favorite charities. Planning can be in the present and/or drafted into estate plans for the future. Talk to your financial advisor for more information on getting started.
Meaningful gift giving
We rack our brains trying to choose the perfect gift for our family members, but one of the greatest gifts you can give is something you may have overlooked.
When a major life insurance company surveyed a group of boomers, 86% agreed that the greatest gifts they ever received involved family mementos and personal stories.⁴ The most valued treasures are often our stories and memories; they are the keys to keeping the family history alive.
Unless someone in the family has taken the time to write down personal accounts of the funny, meaningful, or even tragic events in their lives, those stories can simply vanish as aging relatives pass on.
Here are some suggestions to keep the memories alive:
- Create a “legacy celebration” and bring everyone together to share his or her favorite family stories. Video them, write them down, print them out, and have them bound so everyone can have a copy. Leave plenty of room for future chapters.
- Dig out those dusty old photo albums from the back of your closet. Go through them together. “Who are these people sunning themselves on the dock?” Unless someone wrote the names on the backs of those photos, the history is likely blurry.
- See how many stories surface from trying to recall when and where that group family photo was taken. Who was taking the pictures? And “Whose dog was that, anyway?”
Those little keepsake mementos with sentimental value can be equally meaningful. Great grandma keeps a tattered teddy bear on her bed. Granddad had given it to her before heading off to war. What happens to the teddy bear when she is gone? What about that coin collection, old record albums, wedding ring, or the medals Gramps earned for bravery on the battlefield?
Sharing stories, memories, and mementos can be a new way to celebrate family gatherings, especially at Thanksgiving when we focus on blessings, gratitude, and family connections.
Family giving challenge
Creating friendly family competition can be another way to encourage giving. Here’s how to participate in The Mercer Advisors Family Giving Challenge:
- Kick-off. A parent (or grandparent) gives each family member or child the same amount of money, materials, and/or resources, then lets each person do their research to decide how they want to give back to others within the community.
- Give. Each family member gives how they choose, then shares with the family what they did with their resources, how they gave, who they gave to and why, what the experience was like, and what the impact was.
- Share! Tell us about your family’s experience by tagging @MercerAdvisors and posting on social media using the hashtag #FamilyGivingChallenge. This will also link to others’ experiences so your family can see a glimpse of the impact from everyone’s initiatives.
Whether or not you participate in the challenge, we want to express our sincere gratitude for the blessings we all enjoy during this Thanksgiving holiday. We are especially grateful for the relationships we share with our clients. Thank you for reading and being part of our Mercer Advisors family.
Talk with a Local Advisor
1 “In the Praise of Gratitude,” Harvard Medical Review, November 2011
2 “Giving USA: Total U.S. charitable giving remained strong in 2021, reaching $484.85 billion,” Giving USA, June 2011
3 “Charitable Contribution Deductions,” Internal Revenue Service
4 “Family Values and History Are Still the Best Inheritance,” Estate Planning with a Personal Touch.
Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.