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Philanthropy can provide many benefits, from a sense of fulfillment and community building, to helping you minimize taxes.
The word “philanthropy” originates from the ancient Greek word “philanthropia,” which translates in English to “love of humankind.” Modern philanthropy has been around since the 16th century and has only grown over time.
According to Charity Navigator, a search engine for evaluating charities, charitable giving in the US hit a record high of $410 billion in 2017, which is larger than the GDP of some countries. Giving has increased every year since 1977, except for 1987, 2008, and 2009, where we saw declines.
The numbers speak for themselves. People are giving to charities and they continue to give each year, both for qualitative and quantitative reasons.
For personal connection: You give to support causes that matter to you on a personal level. For example, if you care about animals, you may donate to an animal shelter. Or perhaps you have a close friend with health issues, so you donate to a charity that helps people with this particular issue.
For community support and building: Let’s say you’re concerned about the homelessness in your community. You make donations to support a new affordable housing project while volunteering your time to help see this project through. Along the way, you’ll meet others supporting the same cause and become a part of the community working towards a common goal.
For family bonding and family values: You may disagree with your family on a lot of things, but maybe you can agree on supporting a few causes. Gifting through a family fund each year can help bring your family closer together. You can also build a family legacy through the same fund.
For increased happiness: Two psychologists from the University of Chicago and Northwestern University carried out a study to see if people saw any increase in happiness levels from giving away money vs. spending money on themselves. The study showed that giving away money led to more happiness over time.
While you may not associate taxes with giving, your charitable contributions can help reduce your tax burden. The IRS provides tax benefits for those who donate to charitable organizations, specifically to organizations with a 501(c) tax-exempt filing status. You can gift anything from cash, securities, real estate, art, clothes, books, etc. If you volunteer your time, the IRS even lets you deduct miles driven in service of charitable organizations (14 cents per mile).
Here are some other benefits to giving:
In essence, you end up gifting the full value of your stock and having a greater impact than if you had sold your stock first and then made the charitable donation. Read more about how you can use your concentrated positions to maximize your charitable giving.
Want to get started but not sure where to start? Here are some ideas to consider:
It’s important to vet charities to ensure they’re financial healthy, that they qualify for a charitable deduction, and to allocate donation proceeds in a way that leads to results for the organization. Talk to your advisor about your charitable giving intentions and how you can save on taxes while accomplishing your charitable goals.
Disclosure: The information provided does not constitute as tax or financial advice and is meant to give readers an introduction to charitable giving. If you want specific information on how you can save on taxes through charitable giving, then contact your tax professional or financial advisor.
 “Giving Statistics,” Charity Navigator.
 “Giving, Rather Than Receiving, Leads to Lasting Happiness: Study,” Huffington Post.
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