Three Easiest Ways to Make Charitable Contributions

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					Three Easiest Ways to Make Charitable Contributions
By Rajesh Jyotishi
October 2004

Would you like to benefit your favorite causes and also get some tax breaks at the same time?
Would you like to be able to time your tax deductions and donate as your heart desires? Would
you like to leave a legacy to be remembered by? If your answers are yes to any of the above
questions, you need to make yourself more aware with charitable giving techniques.

There are many ways a person can benefit from charitable giving and to support their favorite
causes. You can use Charitable Trusts, Charitable Foundations, Donor Advised Funds, and
Charitable Life Insurance Policies and of course make outright donations to your favorite charity
with money or property. Some of these tools can be very complex and require some advanced
planning. However, there are some very easy ways you can help others and get some significant
tax breaks in the process.

Outright Gifts: This has to be the easiest. Nothing beats pulling out your check book and making
a donation to your favorite charity. Please keep your receipt. As long as the charity is a tax
qualified 501(c) (3) you can take the deductions up to your contribution amount. You can also
donate property such as clothes, furniture and even cars to worthwhile causes. The amount of
deductions you are entitled to will be based upon the value of the property being donated.

You can also setup an automatic withdrawal or payment plan going to your favorite charity.
Many charities can help you do this. Or else, you can just set it up as part of your online banking
with your existing bank or brokerage account. A $50/$100 a month can go a long way towards
making a difference in the life of others yet it is not a large amount you will miss.

Donor Advised Funds: Donor advised funds have become very popular over the last few years
because of their simplicity and flexibility.

Donor advised funds work like this:

1. You (The Donor) open an account with a donor advised fund and make your contributions.
You can also contribute appreciated stocks, equities or real estate to reduce or eliminate any
capital gains taxes or estate taxes.

2. The gift to the donor advised fund is irrevocable meaning you can't take it back.

3. You (The Donor) are entitled to take tax deductions in the year you make your contributions,
but are not required to donate the amount the same time. This allows you to time your tax
deductions. Suppose you need $10,000 in tax deductions this year. You can make a $10,000
contributions to your donor advised fund and are entitled to the deductions. However, you are
not required to donate your contributions right away, nor are you required to donate to just one
4. The money will sit in this account possibly earning interest or be invested into a mutual
fund(s) growing and can be used at a later time to make contributions when you are ready.

5. You (The Donor) can advise the fund on when, how much and which tax exempt charity you
would like to contribute to. You have the flexibility to make contributions as you like. You can
also have your contributions be anonymous.

6. In the event of a death of a donor, you can specify successor donors. Many
parents/grandparents like this feature because it allows them to teach the kids philanthropy.

Wills, Life Insurance & Retirement Accounts: You can also include your favorite charities in
your wills, life insurance policies, annuities and/or retirement accounts. The easiest way is to do
this is to include them as your beneficiaries. It doesn't have to be 100%. It can be whatever
percent you desire.

Be creative: You may have heard when someone passes away the family would prefer you make
donations to their favorite causes rather than bring flowers. I have also heard of people who
request that for their birthdays and special events that the guests make contributions to their
favorite charities instead of gifts.

Many wealthy parents and grandparents are coming to a realization that they would like to give
their children everything they might need, but they don't ever want to deprive them the joys of
bringing home a pay check. Perhaps this is why Bill Gates has said that he intends on giving
away most of his wealth during his lifetime.

It would be great if we can make regular charitable giving a regular and systematic part of our
lives. Most of us are too busy to donate our time and energies, but if we can donate some small
amounts of money to those who are committed to donate the time and energy such as the
volunteers with RAKSHA, VIBHA, ISHA YOGA, or your favorite temples, churches and cause
related organizations, together we can make a very significant difference. Remember, you can't
take it with you. Have you ever seen a hertz pull a U-haul? Ha! Ha!

Information given here is general in nature. You should consult your tax/financial advisors
before making related decisions. If you would like to learn more about charitable giving options
and uses of trusts, you are welcome to contact me at or (770) 451-1932,
ext. 101. Rajesh Jyotishi is a financial planner in the Atlanta area and a Registered
Representative and Advisor Affiliate of FSC SECURITIES CORPORATION. A Registered
Broker Dealer. Member of NASD, SIPC.

Published by Khabar Magazine, Moneywise section September 2006.

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