A Personalized Approach to Giving
by Sean V. Owen, Ph.D., CFP®, CAP®, CRPC®, APMA® | Financial Advisor | Partner
I have always felt that there are essentially three things we can do with our money: spend it, save it, or give it away. Spending is necessary for our day-to-day needs and lifestyle expenses, but once spent the money is forever gone. Saving, with the implication of investing, defers these same choices to the future with the benefit and expectation of growth. Giving provides these same choices to someone else or to a charitable organization. Although there are opportunities to be savvy with all three, a good portion of my work as a financial advisor is understandably centered on the first two, spending and saving, whether by creating retirement projections, education planning for younger family members, preparing for a large purchase, or just generally building wealth. There is something rather straightforward about spending and saving, of paying ourselves first and living within our means, but when it comes to giving, even when there is a strong philanthropic inclination, it can be difficult to know where to begin, to whom should we give, what should we give, and when.
For those of us who give cash each year to our favorite charities or tithe to places of worship, additional sophistication and tax-savings can readily be achieved by making annual gifts from a Donor Advised Fund or with Qualified Charitable Distributions from an IRA. Yet the potential for philanthropy can extend much further, touching just about every aspect of our financial plan: taxes, retirement income, insurance, estate planning, property and real assets. To explore this reach, this potential for giving, it isn’t to a list of strategies or specialized Trusts where we first must turn for answers, but rather a series of questions related to what motivates us to give, what do we hold most dear, what would we like to see more of in this world, and of what would we like to see less?
It has been said that all philanthropy is personal, which is to say that our inner truths or perhaps our most noble selves are reflected in the act of giving and to the causes we support. Articulating these truths and sharing these noble intentions helps to clarify and shape, as an individual, as a couple, as a family, or even as a community, the scope of our desired philanthropy. I am often asked in my capacity as a financial advisor to provide recommendations for how best to invest a client’s money, to which I always respond, “What is the purpose of the money?” The process of creating a financial plan always involves meaningful conversation about priorities and goals, which helps to delineate the purpose of a portfolio and results in a more contextualized investment recommendation. The same is true with philanthropy. Once we have clarity on our own personalized philanthropic intentions and motivations, then we can begin working with our trusted advisors to align our resources with our purpose, to help us see the opportunities for giving, both in our personal balance sheet and within our capacity to lend our influence and our time. Aligning our assets to meet the needs we have defined and the causes we wish to support can inform our lifetime giving, “giving with a warm hand,” and take shape within the context of our estate plan, the final expression of our deepest values. Done thoroughly, a giving plan will interweave both inter vivos and causa mortis planning, impacting our personal finances, our estate, our family and heirs, society, and the world which we all share.