How to Help a Charity

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There are many ways each of us can help a charity. However, some methods are better suited to specific donors, while others make more sense for other donors. The following are a few of the many ways you can help a charity thrive. 

  • Give cash outright. This is the most straightforward and common method. However, for larger donations, this typically is not the best method for the donor.
  • Set up a lifetime Charitable Remainder Trust with the charity as the remainder beneficiary. You contribute property to a trust and receive a fixed dollar amount or a fixed percentage of the trust’s value each year. At the end of your life, or at the end of a term of up to 20 years, the property remaining goes to the charity. You receive a current income tax deduction for the value of the interest that ultimately benefits the charity. You can control how the trust’s assets are invested. This can be particularly important when the asset is stock in a family business.
  • Give a remainder interest in your home or farm. You can give a charity the right to have your home or farm after your death. You have full rights to live in the house or use the farm. The charity has no right to use the property until your death. You get a current income tax deduction for the value of the interest going to the charity. The value of the interest going to charity is calculated by using your life expectancy at the time of the gift of the remainder interest.
  • Set up a Charitable Remainder Trust at your death with a charity as the remainder beneficiary. This is similar to a lifetime Charitable Remainder Trust but your children or other beneficiaries would receive the income stream. After their deaths or specified period the assets would go to the charity. Your estate would receive an estate tax charitable deduction for the value of the interest that ultimately would pass to charity. 
  • Set up a Charitable Lead Trust during your lifetime with a charity as the beneficiary. This is the reverse of the Charitable Remainder Trust. The charity receives the income stream during your lifetime or for a fixed period, and then, upon your death, the remaining assets are distributed to your children or other beneficiaries. 
  • Set up a Charitable Lead Trust at your death with a charity as the beneficiary. Again, this is the reverse of the Charitable Remainder Trust. You would set up a trust that would be funded at your death. The charity would receive the income stream for a fixed period, typically, and then the remaining assets would be distributed to your children or other designated beneficiaries. This is a way to reduce the estate tax on assets passing to your heirs.
  • Give of your time and expertise. This can be a great way to help in a very personal way. While it helps the charity, it can also provide you with a sense of accomplishment. However, you will not receive a tax deduction for this type of giving.

As you can see, there is a wide range of options you can select. Contact us today to schedule a complimentary consultation in our Southlake or Fort Worth office.  

From the desk of Attorney Brandon McGee

Brandon McGee
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