Personal Finance column: Principled giving this holiday season | PostIndependent.com
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Personal Finance column: Principled giving this holiday season

The season of gratefulness and generosity is upon us. Do you want to do your financial gift giving with intention for optimal impact? Motivations around giving are very personal. Your financial generosity combined with relational resolve makes local and global change POSSIBLE. What are your charitable catalysts?

P – Passion for a cause or concern

O – Opportunity to change lives



S – Simplicity: “I have enough, and giving helps simplify my life”

S – Satisfaction: “It give me great joy to give of my resources”



I – Impact: “I want to make a big difference”

B – Beliefs: “I want to live in alignment with my religious or spiritual beliefs”

L – Love: “I love my family and want to express it financially”

E – Equity: “I want to share what I have with the world”

To optimize your giving outcomes, search your heart and scrutinize your thoughts. Sad to say, financial giving can do more harm than good. Whether you give to family members, or to nonprofit organizations, take time to do the heart work and homework.

Here are four questions to ask yourself as you consider financial gifts to loved ones.

What type of life opportunities or difficulties do you want to address? Is a family member going to school or starting a business venture that you want to invest in? Are there health complications that you can assist with? COVID-19 has thrown a new curve ball at us and makes this more difficult. Discern between a financial lifeline or umbilical cord. Caution abounds if you answer this one with, “I want my kids to have it easier than I did”; or “They have become accustomed to a standard of living, so they need my support.”

What will truly be helpful — not hurtful or enabling? You want to foster a mindset of empowerment, a “hand up” to the gift recipient. In the words of Warren Buffet, “Give them enough so they can do anything, but not enough so they can do nothing.” Too many times, financial gifts create an “entitlement” mindset. This is dangerous territory, as self-worth is confused with net worth, and future expectations become entrenched. A financial gift can be seen as “found money” and treated differently (more readily spent thoughtlessly) than money that was earned through personal efforts.

How do you love family members equally yet treat them uniquely given their circumstances? You may have one family member who has chosen a financially lucrative field, whereas another equally diligent and hardworking member chose a less profitable career. Would different financial gifts be appropriate? How do you communicate your decisions?

How will you communicate, but not dictate what your hopes are for them in receiving or participating in this gift? Financial gifts are profound opportunities to create the ties that bind families together. Unwittingly, though, they can also tear families apart. How will you feel or react if a gift is not used in a way you wanted? Are you OK letting them experience failure and the ensuing learning experience? A tough question: Is this gift about them or about you?

Here are three questions to ask when deciding which community charities to give to.

This time of year, I open my e-mail and post box to a pile of local and international appeals for end of year contributions. I watched a documentary several years ago, “Poverty, Inc.,” and it got me thinking about charitable giving in new ways. I really want to make sure my dollars are helping, not hurting. The Latin root of charity is caritas — love for all. Charity is intrinsically, foundationally relational, not monetary. You can’t truly be charitable simply by writing a check.

Is there a way to get personally involved with this organization above and beyond a financial contribution?

Is the organization’s leadership rooted in the community and developing fruitful relationships?

Are you willing to make a long-term commitment to this organization?

Profound joy is inherent in generosity, and once you discern your intentions, you can optimize the financial tools you use to facilitate your giving plan. For family members, giving appreciated stock if they are in a lower tax bracket can open a variety of doors. Using tools like 529 plans have unique opportunities and benefits. For organizations utilizing donor advised funds, charitable remainder or lead trusts, beneficiary designations, qualified charitable distributions, donating appreciated stock holdings or complex gift giving are all powerful tools above and beyond writing a check. There are taxation benefits, tax efficient income streams and family legacy planning components that will leverage your giving for maximum impact.

With financial gift giving, the stakes are high. Emotional implications and tax ramifications are just a couple of the factors to be considered. It will mean more to you and to the receiver if you take the time and get input from your trusted advisors to make the most out of your heartfelt, deliberate gift this holiday season.

Danielle Howard is a CFP® and CKA® with Wealth By Design LLC in Basalt. Check out her retirement podcasts and blogs at DanielleHoward4u.com.


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