Make an impact through planned giving
Financial planningGuest Columnist

Make an impact through planned giving

Making a legacy gift can have significant tax advantages, but it can also involve your family in participating in philanthropy during your lifetime.

(Photo by Vlada Karpovich via Pexels)
(Photo by Vlada Karpovich via Pexels)

When I sit down with a family as a planned giving professional, the first thing I ask is what they want for the future based on their family’s most important values. Since I often know these individuals, I understand the causes they support, but I still want to know the “why.” Talking about why they care can lead to a truly meaningful conversation concerning not only their issues but also what is in their hearts and their vision for our Jewish community’s future.

Making a legacy gift can have significant tax advantages, but it can also involve your family in sharing your values and participating in philanthropy together during your lifetime. Some people think legacy giving “isn’t for me” for a variety of reasons. These include fear of complexity, the idea that you must be extremely wealthy to leave a legacy, the perception that you have to give cash during your lifetime and the perception that tax savings are minimal. Contrary to these misperceptions, anyone can have an impact after they are gone.

Planned giving is not as complicated as one might think. The Jewish Federation’s Jewish Community Foundation does offer some complex ways to give, but planned giving can also be as simple as adding a simple provision to your will. More importantly, you can usually find no-fee experts (including at the Federation) who can work with your accountant, estate planning attorney or financial adviser to help you minimize your taxes and maximize your charitable impact.

You can also make a lasting impact on your community with relatively little money. The Jewish Federation’s foundation, for example, has endowments starting at $5,000. Any endowment enables you to continue your tradition of charity, which will live on in perpetuity. For some people, directing your life insurance policy to benefit a charity of your choice can provide a sizable endowment in the future for little investment today. Some organizations also provide incentives to give. For example, when you endow your gift to the Federation’s Community Campaign through life insurance, the Federation subsidizes half of your premium.

I sometimes hear from community members that they think planned giving requires them to have cash available during their lifetime. While giving cash on hand can certainly reduce taxes — for example, through the use of Jewish Federation’s donor-advised fund (DAF), which is essentially a charitable checking account — you may also choose to fund planned gifts through your will only after you pass away.

If you are looking for cash flow while making an impact, some foundation products give you income during your lifetime and a charitable gift at the end of life, such as a “charitable gift annuity.” This philanthropic annuity, which has tax advantages, pays a steady fixed income for the rest of your life and then directs the remaining funds to support the causes you care about most. The Federation’s DAF has a low barrier to participation, requiring only $5,000 to start.

I have found that some families are surprised at how much they can save on taxes through planned giving products. Now is a particularly advantageous time to think about your legacy and to make changes to your will or estate plan. Changes in federal tax law that went into effect in 2023 (in the SECURE 2.0 Act) altered the retirement planning landscape and the tax code, opening several previously unavailable opportunities for tax savings. For instance, the rules changed for individual retirement accounts, enabling some additional tax advantages for charitable giving. Organizations like the Jewish Community Foundation will help you and your financial professionals find tax advantages specific to your situation.

You do not have to be Jewish to be interested in supporting Jewish causes to create legacy gifts. Many Jewish Community Foundation endowments support secular causes such as performing arts organizations or museums, and these endowments still support Jewish Pittsburgh by helping to pay the expenses of having a foundation. (The Federation’s foundation charges a low annual fee that compares favorably with most competitive foundations.)

Many people who make planned gifts in their will are driven by a desire to leave a lasting legacy and positive impact — essentially exercising their moral authority long after they are gone by making their values and beliefs last forever. This desire often stems from a deep connection to a cause, gratitude for support received or a wish to memorialize a loved one.

The act of giving reflects a core Jewish value of commitment to social responsibility and our collective responsibility for each other, but it also reflects your responsibility to your family by passing your values to future generations and can inspire those generations to follow in your footsteps.

Ultimately, the decision to make a planned gift makes a difference in the world, and there are far fewer barriers than you may think to achieving this goal. Choose to leave a legacy today, and your values, your good deeds and your good name will live in on our Jewish community forever. PJC

Roi Mezare is a certified Chartered Advisor of Philanthropy and the associate vice president of development and Foundation at the Jewish Federation of Greater Pittsburgh.

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