For those of you that don’t know me yet, I’m Jamie Shoup. I have participated in three or four MFB events as well as seeing some of you at the Souderton office. I am one of the wealth advisors with the FSA team in Montgomeryville that has been partnering with MFB since 2017. Some of you know us as the “Andy’s” firm. Prior to joining FSA in 2018, I had been with a large wealth management firm for the previous 12 years. What attracted me to the practice was not just the quality of the advisors, but more importantly it was the high level of service and care they show their clients, and it was a model that I wanted to be a part of as well. This passion and commitment for helping and serving clients is clearly evident with Doug, Nicole and the Floro family.
I have a question for you, “Do you remember who your role model was growing up?”
My role model was my dad. When my father was still alive, he joked with me and my brothers telling us to, ‘do as I say not as I do’! Of course, it was said tongue in cheek, because he lived his life with strong convictions. His passions were his family, his faith, his work (and his golf) and he was one of the most generous people I’ve ever known. He worked to support his family and to give his children every opportunity to be successful through a great education. I am one of 7 boys and not a single one of us ever had a student loan to pay. To this day, people who knew him and who worked for him still come up to me and my brothers and share stories of his kindness and humility. He treated everyone as an equal and gave to the people and organizations that he cared for. I am blessed for having such a powerful role model in my life and I continue to try live as he did.
Together with my wife, we try to teach our 3 children the importance of love, family, and kindness. As a student of finance, I have also tried to stress the importance of good financial habits. We discuss spending, saving, and investing. Over the past few years, as the kids have started to earn a little money of their own, we have also talked about giving because we are constantly exposed to the “give me” solicitations at the grocery store, the pet store, and even at our kids’ schools. I’ve come to learn that charitable giving is a priority for MFB clients and their friends.
I would like to touch on 3 areas:
- Giving Statistics – what is happening today
- Tax Benefits of Giving
- Questions you can ask before donating
Giving Statistics (Giving USA 2018, the Annual report on Philanthropy)
Do you know how much was given to Charitable Organizations in 2017?
$410 Billion! That’s over 2% of our country’s GDP and represents an increase of 5.2% over 2016 giving.
In fact, Giving has increased every year since 1977 with the exception of 1987 (Black Monday), 2008 & 2009 (The Great Recession).
So, who is giving?
As has been the case in previous years, the majority of giving comes from individuals. Individuals gave over $286 Billion or 70% of all donations … It is not the big Foundations (16% of all donations) and Corporations (5% of all donations) who are responsible.
Where are the donations going?
- education charities (14%)
- human services charities (12%)
- health charities (9%)
- environmental charities (3%)
Historically, Religious charities take in the largest share of donations and this was true in 2017 with 31% of all donations. Most of these contributions can be attributed to people giving to their local place of worship.
Charitable giving is a great way to support the causes you’re passionate about, and there can be potential tax benefits when giving.
First, consult with your tax advisor if and when you are making charitable contributions because not all donations are tax deductible. The gift must be made to a charity that has been designated as a 501c3 Organization, and you cannot receive anything in return for your gift. Example: donations to your church would be tax-deductible; donations to your favorite political candidate’s campaign would not be.
Always get a receipt – proper documentation will be required for a donation over $250 if you end up being audited; documentation includes date the gift was made, amount of the gift, and how the gift was made (cash, stock, in-kind, etc)
You must itemize in order to take a charitable deduction.
If you itemize, make sure the total deductions are greater than the standard deduction. If not, stick with the standard deduction
There is another option to receive a tax benefit and it is known as a QCD (Qualified Charitable Distribution), that allows individuals who are 70 ½ to donate up to $100,000 directly from their IRA without the donation being counted as taxable income, think RMD here … as long as the distribution goes directly to the charitable organization, not back to you, it will qualify … your IRA trustee will send you a 1099-R that you will use when filing your taxes.
A few questions you can ask: what is the mission of the organization? What are their goals and what progress has been made toward those goals? What sources are available documenting their work … an example is Form 990 or audited financial statements should be readily available for donors to review.
Websites like Charity Watch and Charity Navigator are great resources to research charitable organizations. Charity Navigator has a four star and a 100-point rating system and you can get a detailed report on how much of your donation goes for staff, fundraising and to actually helping people.
Check out www.CharityNavigator.org
One thing to remember, Charity Navigator only rates qualified, 501c3, charitable organizations that file form 990 and they must be $1,000,000+ in size. Churches are exempt from filing form 990. Ultimately, you want to ask yourself is this an organization whose mission you are passionate about or is there another organization that has the same mission but is more efficient.
In summary, statistics bear out that we are a charitable nation, giving more year over year. We can adequately research organizations if we want to donate our time, money, or goods and when we consult with our trusted advisor there may even be a nice tax break to take advantage of.
“Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.”