Comprehensive financial planning and wealth management must take into account how local events affect your investment strategy and retirement planning.
If you’re a Maine resident or plan to retire here, our “Focus On Maine” blog series helps you understand the trends and issues that are shaping the financial future of Maine’s taxpayers.
How Opening A Charitable Gift Fund Benefits Maine Taxpayers
If you are considering making a donation to a charity this year, consider opening a charitable gift fund. A charitable gift fund offers several valuable benefits that are not possible when you donate directly to a charity.
Some of the benefits of opening up a charitable gift fund are that it is tax-smart, strategic, convenient and efficient, plus it allows you to choose whether your contributions are kept private or visible to the public.
Here are four reasons why opening a charitable gift fund is more attractive for Maine residents than donating directly to a charity:
- Reduce your tax burden: As you probably know, when you donate assets to a charity organization, you receive a tax deduction. By opening a charitable gift account, you may be able to get a larger tax deduction if the charity organization is public and if you donate to a charity through a charitable gift fund. This is a great way to limit the amount of taxes that you would otherwise owe the government.
- Convenience and flexibility: Another advantage to opening a charitable gift fund is that it makes it easy to donate to the organization (or organizations) of your choice, and schedule your contributions over time. You are not limited to donating to a select group of charities. The ability to time your contributions means that these organizations receive your donation when you want them to. This is beneficial to both you and the charity, allowing you to make the donation when you feel it’s most appropriate.
- Less paperwork: When you donate to individual charities directly, keeping track of your contributions requires a lot of effort and paperwork on your part. A charitable gift fund takes care of all the paperwork for you.
The Investment Company Sponsor that manages the charitable gift fund keeps track of the contributions on your behalf, and sends you a single tax form at the end of the year. This form makes taxes easy for you, and helps reduce the chance of errors and misplaced documents at tax time. - A legacy of generosity: The final benefit of giving through a charitable gift fund is that it puts a structure in place for creating a legacy of generosity. You generally have the option of passing the fund on to an individual of your choice. This person could be a family member who then continues to make contributions in your family’s name. It’s a great way to continue supporting organizations that share your values and vision, and make a lasting impact on your community.
The people of Maine share a rich history, with diverse ethnic and economic groups unified by hard winters and warm homes, blending into a uniquely Maine culture. Donating to local charities is a great way to strengthen our community. Opening a charitable gift fund offers several tax and efficiency benefits that make it a great way to give back and make sure your contributions have maximum impact.
To secure your family’s financial future, you need a smart strategy and plans to mitigate potential risks. Download our Checklist For Securing Your Family’s Financial Future.
