Philanthropy Management

An overwhelming majority of annual charitable giving is done by individuals just like yourself. But are you gifting the most appropriate asset that will provide the greatest benefit to the charity of your choosing? HCR Wealth Advisors offers a full suite of philanthropic planning strategies to help clients meet their specific goals. By utilizing The Clarity Formula®, we will consider your specific needs and requirements and help navigate the philanthropic landscape to help you decide what is best suited for your situation.

In order to help clients meet their charitable goals, we consider:

- Foundations
- Charitable Trusts
- Donor Advised Funds
- Charitable Gifting Strategies

At HCR Wealth Advisors we begin the process by understanding our clients’ philanthropic objectives, and ask the following clarifying questions:

1. Which causes and charities are most important to you?
2. Why have you made gifts in the past? What guided your decision?
3. Do you want to give money to charities currently or as part of your legacy, or both?
4. Do you support the same organizations, or does your giving vary?
5. Do you prefer your gifting to be private or public?
6. Do you consider tax efficiencies when gifting?
7. Are you interested in forming a gifting legacy via a foundation?

Once we better understand your personal goals and objectives, we can help advise the best path forward for you and your family. This may include considering tax incentives that come along with charitable gifting. Depending on the type of asset you gift and the type of charity that asset goes to, the deduction may differ. Additionally, we help clients consider the amount of time they want to dedicate towards their charitable giving to help them decide on the right type of vehicle. Lastly, we focus on the different gifting vehicles and select the one that will best meet our clients’ goals.

Starting a charity foundation

For clients who want to create a legacy of charitable giving, a private foundation may be the right fit. A private foundation is a separate tax-exempt entity established as a non-profit, typically through a substantial initial gift by an individual. The entity must be operated exclusively for charitable purposes and typically has a board named to manage the property and distribute the assets. Clients who are very hands-on and interested in operating an organization to actively manage investments, accounting, and grant making, as well as sponsor charitable events, could consider a foundation. Additionally, a foundation allows clients to create something that may exist into perpetuity.

Charitable remainder trust

For clients with sophisticated tax planning needs who want to support charities and transfer assets to their heirs, a charitable trust may be an appealing option. Clients can utilize a charitable lead trust that generates a potential income stream for the charity, with beneficiaries receiving the remaining assets. Alternatively, a client could utilize a charitable remainder trust that generates a potential income stream for themselves or their beneficiaries, with the remainder of the trust being gifted to one or more charities.

Donor advised fund

For clients who want a turn-key solution, combined with low costs and flexibility to charitable giving, a donor advised fund (DAF) can be the right choice. A DAF is a program sponsored by a public charity that allows a client to make an irrevocable charitable contribution. The client receives the full tax benefit in the year the gift was made and then can recommend grants from the DAF over time.

Finally, clients’ charitable giving can be via outright gifts - cash, check, credit, required minimum distributions or appreciated investments.

Each solution has its advantages and limitations, and by utilizing The Clarity Formula® and working side by side with HCR Wealth Advisors, clients can feel comfortable exploring suitable options for their situation.

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