Billionaires and the not-so-wealthy have pledged to donate the majority of their wealth to causes they value most.
Warren Buffett, Bill and Melinda Gates, MacKenzie Scott, Sara Blakely and Ted Turner are among the billionaires who have committed to giving away their fortunes to philanthropic causes. Though their reasons – and the charities they support – vary, they are all part of The Giving Pledge, which is an invitation to publicly commit to giving away the majority of their wealth either during their lifetimes or in their estate plans.
Strategic and impactful philanthropy isn’t exclusive to the celebrities we read about in the headlines. Thoughtful, proactive charitable plans are something for everyone to consider as part of their financial planning.
Shaquille O’Neal was once quoted, in reference to his children’s assumption of wealth, saying, “We ain’t rich. I’m rich.” And there’s Mark Zuckerberg’s view that he wants to use his wealth to make the world a better place, not just for his children but all children.
While it might seem awkward to tell your family that you plan to donate most of your wealth, many of those committed to The Giving Pledge are being more than transparent with their families about their giving wishes – they have included their children and grandchildren in decision-making. Vehicles like charitable trusts, donor advised funds and private foundations make it easier to share values around wealth and involve family in charitable endeavors. Family members can help make decisions about where the charitable contributions go – now and in the future.
One survey found that 79% of students who said they came from a family that made charitable contributions also said it was important for them to continue the tradition. So, while you may not be leaving a sizable inheritance to your children, you are leaving a legacy of philanthropy. Through causes you choose to support in your lifetime, you’re also passing down your passions.
Philanthropic wishes shouldn’t just be a topic of conversation as it pertains to estate planning. There can be so much joy from watching your gifts come to fruition during your lifetime.
Another benefit to implementing giving strategies while you’re here is the tax benefits. And while tax savings isn’t typically the catalyst for giving, it’s a consideration as part of a holistic financial plan.
While you don’t have to go to the extreme of the signatories in The Giving Pledge, philanthropic intentions should be a topic of conversation with your advisor so you can gift thoughtfully, meaningfully and strategically.
Sources: gobankingrates.com; si.com; givingpledge.org