There is no universal definition of philanthropic success and there are many different ways to achieve your charitable goals. Outright gifts during your lifetime or at death are the simplest way of giving to charity. However, as your wealth grows you may be interested in slightly more complex gifting strategies that require the use of a charitable entity. Determining the appropriate charitable entity to achieve your philanthropic objective can be challenging. Each charitable entity has advantages and disadvantages compared to the other options.

The Perrini Cain Group can help you sort through the complexity of charitable giving strategies and help you determine effective ways to make gifts to your favorite community charitable organizations during your lifetime or after your death.

FAMILY FOUNDATIONS

Higher-net-worth families many times choose to establish their own private foundation to receive gifts, including distributions from a CRT. The family foundation allows for family control over decision making concerning the charitable recipients of the gifts, which can change from year to year. A minimum of 5% of the principal value of the foundation must be distributed to charities each year. Like the CRTs, foundations cost more to establish and require annual tax filings.

COMMUNITY FOUNDATIONS

Most major cities have a community foundation to which gifts may be made for a variety of local charities. The gifts can be undesignated, which allows the community foundation board to make grants they deem appropriate. Or, a designated or directed fund can be established in your name to target charities of your choice over a period of years or into perpetuity.

DONOR-ADVISED FUNDS

Donor-advised funds provide most of the benefits of a private foundation while avoiding start-up and ongoing administrative costs. An immediate tax deduction is allowed (subject to AGI limitations), and you may choose the charity or multiple charities to benefit from your contribution, as well as determine when the grant will be given.