Generosity Planning

W. David Kern
December 1, 2022

There are many feelings that occur after you’ve been through one of the worst disasters the state of Florida has ever been through. I’ve been through different stages of gratitude, heartbreak, survivor’s guilt, and even anger. Being a part of the strong community and hearing stories of survivor’s have helped, but the one thing that has given me the most hope is generosity.

“I’ve never met an unhappy generous person.” – Unknown

We often speak to our clients about the importance of being generous. In a way, it’s a pure connection we all have as humans. Helping each other naturally brings joy. There are many proven studies that generous people are happier and healthier. There are even a few studies that suggest that generosity can extend longevity.

Generosity comes in two different forms…time and money. It’s easy to understand how to donate your time. You donate time by volunteering, being on the board of a non-profit or organizing a fundraiser. Financial donations can be a little trickier and can have some more benefits tied to it. Financial donations can be simple like giving to a neighbor or giving cash to a non-profit. But financial donations can also be a little more complex like donating appreciated stock or a privately owned asset to charity.

When giving financially after a disaster there initial and very important points to remember:

  • Make sure the organization is vetted and registered. Ask around or do your research online. While this is a time when a community can come together it’s also a time where fraud cases rise.
  • If you are looking to make a tax-deductible gift, ensure it’s registered as a 501(c)3 entity with the IRS by checking the IRS’s website.
  • Align your giving with your values. Speak with the organization and find out where the gift will go. If you love animals, will your money go to pets in need. If you love children, will the money go directly to help kids.
  • Be patient. As generous humans we tend to want to fix everything right away. But, as we have witnessed, the rebuilding efforts of this community will take a long time. Money will be needed months from now just as much as it’s needed right now. So be smart with the timing of your donations.

Giving Efficiently

The next steps are to make sure you are giving efficiently. Gifts are not only extremely helpful to the community, but if they are given the right way, they can be beneficial to the donor.

  • Get your tax deduction. Whenever possible, donate to a registered 501 (c) 3 and get a receipt for your donation. Whether you donate a used car, or some used clothing, a receipt should have a value on it that you can file with your taxes and take a deduction.
  • Be intentional with what you give. The IRS has limits to the amount that you deduct depending on what you give. Cash has a higher limit than stock. Make sure you check with your tax advisor, financial planner or do your own research before you give.
  • Friends don’t let friends donate cash. Appreciated assets allow a “double benefit” by not only allowing for a deduction for the full value, but also allows the donor to avoid paying capital gain tax on the appreciation. So, if you have an asset, such as stock, that has grown in value, this can be twice as beneficial as a gift.
  • Utilize tools like a donor advised fund to maximize the control of your deduction. A donor advised fund allows you to get a deduction at the time of the gift and control the timing of when the organization will receive the gift.

Remember, no one knows when they will have the opportunity to be generous so having a plan for you giving is very important and rewarding. Psychologically this helps to remove any mental barriers to where the generosity will come from. At Wealthquest, we encourage clients to set up an abundance fund. This is simply a separate account where you deposit some amount, and the only purpose is to give it away. This is also where tools like a donor advised fund or trust can work very well. By removing the question of the source of giving, it allows the freedom to give generously knowing that you have planned for it.

Generosity is key to unlock true joy in life. The benefits to your mental health are amazing. And it can also be a valuable part of your financial plan. Be sure to discuss this planning with your financial planner or tax advisor. As always, we at Wealthquest are here to help answer any questions you have around generosity.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Past performance is not indicative of future results. For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealthquest, including our Form ADV Part 2A Brochure, please visit or contact us at 513-530-9700.

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