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Incorporate charitable giving into your wealth plan

Oct 10, 2023 | RBC Wealth Management


’Tis the season for giving. Americans give nearly $500 billion to U.S. charities each year, according to Lilly Family School of Philanthropy, and Double the Donation reported that 30% of all annual donations are made in December.

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Charity accepting a clothing donation

The reasons for sharing one’s wealth are varied as are the causes to support. According to Giving USA, the top charitable causes in 2022 in the U.S. were: 

  1. Religion 
  2. Human Services 
  3. Education 
  4. Gifts to grant-making foundations 
  5. Health 

Regardless of what you support or why you give, it’s important for your philanthropy to be part of your wealth management plan. Incorporating charitable giving into your plan includes consideration of your annual income, income taxes, investment portfolio and your legacy and estate planning goals. 

A simple first step is to develop a philanthropic mission statement for you and your family. Having a clear and succinct statement of what you and your family value is important to make an impact today and serve as a giving guidepost for future generations. 

Year-end holiday gatherings with family members of multiple generations may provide an opportune time to develop, or annually review, your philanthropic family mission statement. Consider scheduling a family meeting focused on giving. Invite your financial advisor to serve as a third-party resource to help navigate any complex money matters. He or she can also help you and your loved ones effectively address any potential issues that may arise in the context of family dynamics. 

When you hold your philanthropy mission meeting, approach it as a positive opportunity to: 

  • Discuss and share your values 
  • Impart family values on younger family members 
  • Educate the next generation on philanthropy and your future wishes 
  • Make your community and the world a better place 

Your mission statement may help your philanthropy become more focused and impactful giving—instead of being reactionary or spread over many causes. It can also lead to next steps, such as how you choose to distribute your funds to charitable causes in the long-term. 

One of the fastest-growing means of donating to charities is through donor-advised funds (DAFs). DAFs may be more affordable, flexible and easy to establish for families that want to give over time, but don’t want to invest the time or money that private foundations require. DAFs can serve as intergenerational charitable wealth transfer vehicles as well. 

As you share your wealth with the causes you hold dear, RBC Wealth Management can help you integrate your philanthropy into your wealth plan to have an impact on the world—in a manner that aligns with your values and honors your legacy.

Example of how a DAF can be utilized

Consider Roger and Kathryn, an affluent couple with two children—Sophia and Oliver— who wanted to impart their philanthropic beliefs upon their children while reducing their taxable income. Because they wanted to donate more than $100,000 of their income over five years, they were able to utilize a donor-advised fund. The children each picked a cause that was important to them. To support those causes—an animal rescue and a homeless shelter—they created the “Sophie and Oliver Charitable Fund” and structured $10,000 donations to each annually over the life of the fund. The family also toured the local nonprofits to learn the impact of their charitable giving.

Making an impact

Wealth Insights Report cover image - charitable giving: realizing your vision for a better world.Planning your family’s legacy with informed choices about the organizations you want to support and checking that your donations are used appropriately may be time-consuming and complicated. I am available to help your family plan for your philanthropic goals and align your values with your wealth so you can support the causes that are close to your heart. Download RBC Wealth Management's Wealth Insights Charitable Giving report

Read additional articles in the Q4 issue of Investor's Edge.


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