Practicing Strategic Compassion

A year after Katrina, the Gulf Coast is still rebuilding. Here's how to make sure your charitable giving is effective.

clout, giving must take place long after the disasters have disappeared from the headlines, Hunt says. Only when giving takes place year-round will the black community be able to build resources rather than desperately trying to raise money for crisis after crisis. “If we have our own resources, we can build the agenda and say, “We have these issues, and here’s how we think they should be solved. We’re ready to put some money down on the table.’ That’s a much stronger position than one in which we always seem to be asking for something.”

MAKING YOUR DONATION PAY
Strategic giving also means that you consider your financial situation. “You’re not giving to a charity to get a deduction,” says Genevia Gee Fulbright, vice president of Durham, North Carolina-based Fulbright & Fulbright CPA. “But that’s an additional win-win.”

Figure out how much you can afford to give and stick with that figure. A tax professional can tell you if you’re better off donating more money in certain years to reduce your tax burden. “If you find that you have a little more money at the end of the year or you made a little more profit than you anticipated, you can give more to charity,” says Fulbright.

Generally, your deduction for charitable contributions is limited to 50% of your adjusted gross income, though there are cases in which 20% and 30% limits apply. The best way to donate is via credit card or check because they provide proof of the transaction. However, “If you decide to give cash, always request a receipt,” says Fulbright. “If the charity is unwilling to give you one, do not donate to the group.”

If you consistently donate to charity, organize a team of financial professionals to help you make sound decisions. “Ideally you want your financial adviser, tax person, and estate planning person working hand in hand,” says Lanta Evans-Motte, president of the Association of African American Financial Advisors. “Each of those three parties will have a different perspective that they’re trying to focus on. Your estate planning attorney isn’t necessarily going to be keyed in on how your money is invested and what rate of return it’s getting. The financial adviser and attorney aren’t necessarily going to be up on tax laws.”

Estate planning is a consideration that you should not take lightly. Not only can you bequeath assets such as stock and real estate to your favorite charities but you can make other provisions as well. “You can certainly structure your estate so as not to give it to the government but to give it to organizations that you care about,” says Obren V. Barnes, an estate attorney and president of Literacy Institute for Financial Enrichment in Lanham, Maryland. You can leave all or a percentage of your estate to charitable organizations and even designate when the assets become available to the charity, such as after the death of a spouse or child.

“Any strategy needs to be coordinated with your overall financial plan,” says Evans-Motte. “Not just

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