Fuel Your Passion Through Philanthropic Giving

Emily Messegee

CFP®, MBA, Wealth Advisor, Director

Summary

Maximize philanthropic giving by aligning your financial portfolio with your values. Learn strategies to fuel your passions.

People Fueling Their Passion Through Philanthropic Giving

Every so often, it’s good to take a step back and put things into perspective. As a wealth advisor, I work with clients to help amplify and simplify their financial lives, thereby creating opportunities for philanthropic giving.

Unfortunately, there are still places in the world where it’s a challenge to access basic liberties like schools, books, and learning. Earlier this year, I had the privilege of joining a nonprofit organization in Guatemala to launch a variety of projects that focus on literacy and disrupting systemic poverty in rural areas of the country. The 27-year old nonprofit runs community-based programs in-country and creates sustainability through the ongoing dedication of host-country nationals, grant funding, and generous donors.

Since I can remember, reading has been an integral part of my life (I am the youngest of six siblings, so I had a lot of reading buddies.) When we didn’t want to put our books down long enough to eat dinner, our parents instituted a rule for “no reading at the table”. That’s why it’s difficult for me to imagine not being part of a culture focused on reading and learning. In Guatemala, 79% of Indigenous people live in poverty, only 10% graduate from high school, and 33% of adults cannot read or write.1 Can you imagine not being able to read? Reading is the path to infinite possibilities and opportunities; it fosters understanding, empathy, personal growth, creativity, innovation, advanced skills, and the list goes on. I believe that educating the less fortunate, and providing access to knowledge through literacy, can cure the world’s ills. I fuel this passion by channeling my philanthropic giving and economic resources.

What are you passionate about? And how can you leverage smart giving techniques and financial vehicles to make an even greater positive impact?

Steps for initiating philanthropic giving

Step #1: Explore your passions. What are your beliefs? What inspires you to give unconditionally? Have you or a loved one benefited from the philanthropic giving of others, and do you want to pay it forward?

Step #2: Determine the extent of your giving. What type of resources do you want to give? They could be time, money, expertise, or connections/contacts.

Step #3: Find a nonprofit that supports your passion and how you want to give. There are many resources available for you to use when screening organizations, such as Charity Navigator and Guide Star.2 Talk to your network, scan LinkedIn, connect with local foundations that give grants to nonprofits, reach out to a Rotary Club in your area — just start exploring.

Step #4: Collaborate with your wealth advisor. They can help you maximize your giving and/or align your portfolio with your values and passions. There are several ways that you can grow your financial giving to charitable organizations.

Ways to give

In addition to fueling your passion, philanthropy and charitable giving can be done without tax consequences. Below are ways to give that will provide benefits for you as well as your favorite causes.

  • Donor-advised funds: Donor-advised funds (DAFs) are a tax-efficient way to support the causes you’re passionate about, and a way to start legacy giving. Typically, DAFs are funded with appreciated stock. The stock is transferred into the DAF at the full market value, which results in the donor avoiding capital gains implications. This is a good alternative to liquidating the stock, paying capital gains tax on the appreciated value, and then donating the proceeds to charity. Funds in a DAF can potentially grow over time and there are no tax implications on the growth.
  • Qualified charitable donations: If you are 70 ½ or older, you can avoid taxes on IRA distributions by sending funds from your IRA directly to charities. There is a cap of $105,000 per year (as of 2024,) but the Qualified Charitable Donations (QCDs) can be used to satisfy a portion or all of the annual required minimum distribution (RMD) from pre-tax retirement accounts. Just be sure that the distribution is paid directly to the charity and not to you first.
  • Donating stocks or other assets: Most charitable organizations can accept appreciated assets directly — mainly the assets are stock. Similar to funding a DAF, instead of liquidating the stock and paying taxes on the capital gains, the appreciated asset gets donated to the nonprofit at full market value. It is normal for the charitable organization to immediately liquidate the asset.
  • Planned giving: Future donations that your estate will make directly to a charitable organization are considered planned giving. Currently, any qualified charitable giving at death is exempt from federal estate tax. You can easily include a nonprofit in your estate plan documents via a will or trust. You can also list a charity as the beneficiary on your retirement account, life insurance policy, or annuity. When you pass, the designated funds will transfer directly to the nonprofit. If you want, let the nonprofit know the status of your planned giving — this is a wonderful way for the organization to incorporate the giving into its strategic plan and cashflow projections.

Get started

There are so many ways that we can make a positive impact on the world around us. I encourage you to find your passion and explore ways that you can leverage your opportunities and resources to fuel the causes that inspire you.

Feel free to lean on your wealth advisor to help you increase the impact you can have with a complete financial plan that includes giving. If you are not a Mercer Advisors client and want to know more about giving strategies, let’s talk.

1Why Guatemala?: Systemic Poverty, Illiteracy, Inequality: Coed,” Cooperative for Education, March 4, 2024.

2 Charity Navigator, Guide Star

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