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Contrary to some people’s perceptions, you don’t have to have the big bucks like Oprah Winfrey or Bill Gates to be philanthropic. “Philanthropy is about giving of one’s time, talents and treasures,” says Diane Bell McKoy, president and CEO of Associated Black Charities. “Giving back is born out our faith and family traditions.”
For older African Americans, philanthropy traditionally has been about giving money to the church and charitable organizations. For young black professionals, it’s about investing in change. “They really want to make a difference in their communities,” McKoy says.
There are ways to infuse philanthropy into your every day life. Whether you are involved with a small family foundation, a corporate giving program, or a civic organization, there are many ways you can pay it forward in your community.
No doubt you are familiar with the practice of tithing where members of a congregation contribute 10% of their income to their church. You may not be in a position to provide that level of funding, but you can make annual gifts to nonprofit organizations. Just make sure that the organization has a 501(c)(3) legal status, which means you can claim the appropriate federal deduction on your income taxes (up to 50% of your annual adjusted gross income for gifts of cash and 30% for stock or property).
Check out GuideStar.org to find information on nonprofits. Also, the Associated Institute of Philanthropy, www.charitywatch.org, is a national watchdog that grades various charities and offers resources to help donors make informed giving decisions.
Exactly what qualifies as a charitable gift? It can be cash, real estate, stocks, income from trust funds, personal belongings, including clothing, artwork, jewelry, or even a used car, says Danny Freeman, a financial adviser with Darda Wealth Management in Winston-Salem, North Carolina.
Always retain receipts for your charitable gifts no matter how small the amount. If an organization is tax-exempt, you write off your contribution on your income tax, he adds.
Another charitable giving strategy includes making a bequest, or leaving a set amount of assets to a charity in your will, making an organization the beneficiary of a life insurance policy, or setting up a charitable trust. Freeman says it’s important that you work with professionals–financial, tax, and legal advisers–to help make an informed decision about a strategy that incorporates your values and your motivations for giving, and to aid in understanding any relevant investment, tax, and estate planning considerations.
Just as well, your giving strategy will depend upon what that nonprofit has in place. Whereas Associated Black Charities organizes donor funds and workplace giving through payroll deduction, the United Negro College Fund is a national organization with systematic giving programs, for example.
Giving back doesn’t have to be a solo endeavor. McKoy is part of growing movement of professionals who belong to giving circles, where committed individuals come together, pool their dollars and then decide as a group where to give the money. Giving circle may contribute in anywhere from $100 and up.
Typically, the money is distributed annually in the forms of grants. Giving circles save individual donors the cost of establishing private foundations Also, the funds are held and managed by a public foundation or some other nonprofit, McKoy adds.
You don’t have to always dip into your wallet to help others in need. Donate your time by becoming a mentor to a young person through such programs as Big Brothers, Big Sisters or The Boys and Girls Club of America. You can also participate in afterschool programs to help students in need. Many corporate professional are giving back and leveraging their clout by serving on community boards or encouraging their companies to give matching gifts to viable causes.
McKoy suggests partnering with a nonprofit organization to do a fundraiser, taking advantage of your social network. It doesn’t have to be an elaborate event and can be as simple as a wine tasting at a local restaurant, she adds. “Use your relationships (friends, colleagues and professional associations) to help further the mission of causes you are passionate about.”
Further Reading: Wealth For Life Principles
1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning
10. I Will Strengthen My Community Through Philanthropy