How to Make the Most of Your Charitable Donation The money-wise approach to doing good.
Think back to your last charitable act. Was it impulsive -- such as a cash donation to a Salvation Army Santa or a purchase at a charity auction? While these good deeds make a difference, being strategic about your charitable giving will enable you to make more of an impact, maximizing what you can give as well as what you will receive come tax time.
Your first step is to consider what philanthropy means to you. What do you hope to accomplish? What causes are you passionate about? Answering these questions will help you to stay focused and establish guidelines that lay out the amount and schedule on which you want to give, your income and tax needs, funding abilities and most effective giving methods.
Let's say you are about to sell a highly appreciated asset (such as your business) and are looking for ways to be charitable -- and tax wise -- with the proceeds. Using a charitable lead trust (CLT) or a charitable remainder trust (CRT) could save you thousands (or millions) of dollars in taxes and provide much-needed funding to your desired charity.