By Merine Tulloch,FCCA

One of the fastest growing sectors in the United States is that of Tax exempt organizations. Currently there are close to a two million non-profit organisations with more being created each year. This has brought the fierce competition for donations into focus and yet most of us give very little thought to philanthropy.

Of all our financial activities, philanthropy is often the least considered and very ad-hoc.  We are aware that contribution to charity saves us on taxes but we never usually ask how we can maximise this tax benefit.

Philanthropy is a very potent and effective tool.  With well-planned giving you can make changes in the areas that you have strong interest in, teach wisdom and values to your community and invariably leave a legacy that will continue to influence others. The more thought and effort you put into philanthropy, the more rewarding it will be financially, socially and emotionally.

Here are some guidelines that you can follow in making sure that your philanthropy is effective and powerful.

1. Get the facts straight about your finances. The main reason why most people don’t give more is due to lack of information. They basically do not know how much money is available and are therefore unsure of how much they can give. This can be overcome through conducting detailed financial planning with the assistance of an advisor.
2. Review your finances regularly. Here four simple, but smart rules that you can follow:
   1. Invest wisely
   2. Spend less
   3. Save more
   4. Give generously

Be sure not to overdo the last rule else there no funds for the first.

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3. Make good use of professionals. Charitable giving can be rather complex when figuring out the legal requirements and financial benefits, so it is better not to try doing on your own. You need the services of an attorney, a financial advisor, an estate planner or an accountant. Just ensure that they are of good repute.  It is common knowledge that many people do not include charitable donations in their will, so feel free to raise it at your next professional consultation.
4. Include the entire family. You can use philanthropy to teach children about goals, managing their money and ethical and moral values.
5. Consider posterity. The philanthropy you practice will leave a lasting effect on your community and the organisations that you sponsored. Recognition may be as simple as a memorial plaque or as complex as a perpetual scholarship. The charity that you will be remembered for should reflect your values. Bear in mind that the most influential philanthropist are not necessarily the ones with the highest net worth, but usually those that are financially aware, confident and passionate about their cause.

Philanthropy is powerful when thoughtful focus is placed on an activity that you feel strongly about.  This allows others to be influenced by your ideals and as they buy into it and contribute, it can literally change the world.

© Merine Tulloch -2015
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