SPOTLIGHT ON YOUR PORTFOLIO(A)

As year-end approaches, it’s an ideal time to review your philanthropic strategy and to maximize the impact of your gifting dollars. This year, strategic giving is more important than ever. The recent federal tax cuts present new opportunities for gifting and important implications for your portfolio, while economic and political challenges make your gifts more critical than ever for non-profits. Here are some giving guidelines:
Give early. Many people review their annual tax planning in the fall, determine the allocation for charitable gifts, then wait until year-end to write checks or transfer stock. In the U.S., 60% of gifts are made between November 15 and December 31. This year in particular, consider giving early. Many non-profits, particularly those addressing human rights, the environment, and the root causes of poverty and injustice, have been devastated by the difficult economy and cutbacks in government support for social services. They need donations as soon as possible. Talk to your Trillium Asset Management portfolio manager about facilitating the granting of charitable gifts directly from your account, in the form of either cash or appreciated stock.
Give strategically. Says philanthropic advisor and author Tracy Gary, “Philanthropy is not a yes/no decision. It’s about what you really want to do with your money in your lifetime.” Creating a personal giving plan is the single most important step in maximizing the impact of your philanthropy. Define your focus, and be intentional about what you want your gifts to accomplish, whether that’s economic justice in your local community or protection of endangered forests in the developing world. Consider consolidating smaller donations to make meaningful major gifts. Most giving is local; consider adding national or international grants as well. Your Trillium Asset Management portfolio manager and your accountant are both great resources to help determine how much you can give, now and in the future. You may also want to consult a philanthropic advisor, or books such as Inspired Philanthropy: A Step by Step Guide to Creating A Giving Plan (Jossey-Bass, 2002) and Robin Hood Was Right: A Guide to Giving Your Money for Social Change (W.W. Norton & Co., 2000).
Practice giving for change, not charity. Unlike traditional charity, social change philanthropy focuses on the underlying causes of social, economic and environmental problems, rather than simply addressing the symptoms. Traditional charity, for example, might fund shelters and soup kitchens for the homeless; social change philanthropy might instead fund low-income housing development, job training initiatives, or advocate for a living wage. Says Tracy Gary, “In the best of cases, philanthropy is a tool for building community…and to bridge the gap between rich and poor.” There may be a community-based public foundation with a social change mission in your area. Visit Changemakers at www.changemakers.org or The Funding Exchange at www.fex.org for more information about social change philanthropy.
Consider giving appreciated stock. Recent changes in federal tax laws reduce tax rates on ordinary income, qualifying dividends, and capital gains. The long-term capital gains tax rate, in particular, has been reduced from 20% to 15%, while short-term capital gains are taxed at ordinary income rates. Although overall tax rates are now lower, we’re urging clients to remember that charitable giving still provides significant tax benefits. In addition, the fact that many stocks have appreciated signficantly in the past few months of market recovery may present good opportunities to make charitable gifts of stock with embedded capital gains. Talk with your Trillium Asset Management portfolio manager about coordinating with your accountant to devise a giving strategy that optimizes both tax consequences and the impact of your philanthropic gifts.