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Strategies for Personal Philanthropy

A photo of a family

As we head toward the holiday season, many people start thinking about year-end planning and giving back to their favorite charities. It occurred to me that this is not the only time of year people should think about doing good for others. For me personally, it is part of my family’s DNA and I think about it a lot. Simply put, giving back gives me and my family a greater purpose. There are also financial benefits that should be factored into your strategy. Here are a few things I have learned over the years and suggest to others.


People give for a variety of reasons. They might just be inspired by a personal experience or an event that motivates them to give back. Early in my career an acquaintance invited me to attend an event at Wildwood Schools, a not for profit supporting children with autism, and my eyes were opened to the value of giving. There were many people at the event who were dedicated to Wildwood’s mission, and we could see the positive impact their involvement was having on the organization. This kind of involvement can lead to personal fulfillment, joy, and satisfaction from doing good for others.

I always encourage people to find a cause they are passionate about and get involved at whatever level possible financially and timewise.


As you begin a relationship with a philanthropic organization, I encourage you to get to know the leaders and learn how the organization is run. Do they follow sound business practices? They should provide receipts for tax purposes, for example. How are the finances managed and what kind of reputation do they have in the community? Will they hold your name and contributions confidentially and not share your name with others? Understand how your gift will be used and how you will be recognized and thanked.


Organizations looking for donors typically want to build a relationship and understand the motivation behind people’s gift of time, talent, and treasure. If an organization does not take the time to build a relationship before asking for a gift, this may be a sign that they are more interested in the transaction than the relationship. Organizations should not neglect to find out what you want to accomplish and what kind of impact you are looking to make. As you get to know the organization and if you observe questionable spending or loss of effectiveness in carrying out their mission, these are red flags. Be careful of an organization who asks too frequently for financial contributions or asks for an inappropriate amount. This is a sign that they are not authentically taking care of your relationship.


Many people have trouble identifying causes they truly care about and what they want to accomplish with their philanthropy. If this is your case, it may require taking the time to do some self-reflection and review of your values. Invest time into doing research about organizations making an impact. Time may also be a factor holding people back from getting involved. It may feel too overwhelming to think of adding one more thing to your full plate. I encourage people to start one step at a time. It may be that you only have the time to write the check and later in your career you have more time to donate hands on volunteering like serving on a committee or board. Or maybe you have the time now and the donations will come later. Regardless of your situation and your ability to give, most organizations will be pleased to have what you can offer. And, if not, it might be a sign that this is not the right organization for you.


Teaching the value of philanthropy and setting a good example for others can start anytime. If you have a family, I encourage you to involve the whole family in giving decisions. Research and select causes together. Dedicate family time to volunteer. I have a friend who is a very successful businessman and became a billionaire. He has spent his life giving back to people less fortunate and in need in his community. He has also invested in mentoring to others, including his children and grandchildren teaching them the value of giving back.


In addition to the purposeful impact giving back provides you and your family, there are sound financial benefits to consider as part of your strategy. There are several tax and estate planning techniques that can be explored to realize both the personal fulfillment of giving, the family example/values of giving, and making smart financial decisions. A simple, but often overlooked concept is gifting appreciated asset as opposed to cash. For example, a client has greatly appreciated stock that they would owe capital gains tax on. Instead of selling the stock, they either gift it directly to the charity, or to a donor advised fund. They get the benefit of leverage, as the cost of the gift was substantially less than the value of the gift, they receive a tax deduction for the full value of the gifted asset, and they avoid paying the capital gains tax.

Donor advised funds can present a great alternative to establishing an actual family foundation, as the institution administering the fund handles all the legal, compliance and tax related matters. Local community foundations are great examples of this. My family and I partnered with our local community foundation a few years ago to establish The Preddice Family Foundation. We make regular annual gifts to grow the donor pool (we get tax deductions for those gifts) and we made planned gifts as part of our estate (life insurance policies and estate assets, effectively removing them from our estate for tax purposes.) We get those benefits, plus the benefit of being able to work with our children to pick charities they want to benefit, thus being able to help coach and shape them, and the added benefit of knowing that after we are gone, our family’s legacy of giving will continue. 

I am truly passionate about giving back. Reach out if you want to discuss any of these ideas in greater detail or if you need help starting a Family Foundation.

Nicholas Preddice is a partner and founder of The Affinity Group. He works with clients as their personal CFO helping them fulfill their lives through successful financial planning outcomes.