This past month, our firm had the privilege of participating in a “Lunch and Learn” event hosted by St. Laurence Catholic School, a local K–8 institution. The goal of the event was to educate and engage the community on the topic of charitable gifting, empowering individuals to make a meaningful impact through strategic financial giving.
The session featured an outstanding presentation by Issa Kamara, Senior Vice President at Bank of America. Issa emphasized the importance of aligning charitable giving strategies with one’s personal goals and values, and he outlined several key considerations when selecting the right giving vehicles. His insights helped to explain the process and highlighted how thoughtful planning can enhance both the donor’s experience and the recipient’s benefit.
Our partner, Paul Romano, was also in attendance and offered valuable legal insights during the Q&A portion. He discussed the legal framework surrounding charitable gifting and underscored the importance of a collaborative approach involving a CPA, financial advisor, and attorney to ensure an effective and compliant giving strategy.
It was an honor for our firm to support an event that champions both education and philanthropy. A special thanks to Jessica Bardin and the entire St. Laurence School staff for organizing such a wonderful event. We’re proud to play a role in helping our community understand the many benefits of charitable gifting. Below, we’ve included a short blog post from Joshua, one of our Senior Associate Attorneys whose practice focuses on Estate Planning and Wealth Management, as well as supplemental materials covering key points from the presentation.
Exploring the Best Methods for Meaningful Charitable Giving
When most of our clients think of charitable giving, they think of one-off gifts—dropping money in the Salvation Army buckets during the Holidays or donating to non-profits during emergencies. Though these types of gifts lead to great personal satisfaction, they do not generally create a long-term impact. Clients who want to leave a lasting legacy can use specific charitable giving vehicles to leave a lasting impact that supports both their communities and families.
Methods for making charitable gifts fall into three broad categories:
Clients should consider several factors when deciding the method of giving that best fits their intention and life stage, including Flexibility, Available Charitable Tax Deduction, Ongoing Control, Cost of Maintenance, and Income Stream to Donor or Others.
Direct Gifts involve a person making a gift to a charitable organization itself. Conduit Gifts involve giving to an entity whose purpose is to make gifts, over time, to charitable organizations. Conduit Gifts typically involve Donor-Advised Funds (DAFs) or Private Foundations. Split-Interest Gifts involve making a gift that creates both an income stream and a remainder amount, and provides one component to charitable organizations and the other to the donor’s designees. Split-Interest Gifts typically involve Charitable Gift Annuities, Charitable Remainder Trusts, or Charitable Lead Trusts.
As highlighted in the graphic above, each Method comes with certain benefits and drawbacks. Direct Gifts offer the most cost-efficient approach but provide little control. DAFs and Private Foundations offer control to donors over the continuing impact of their gift, but can require active management. Split-Interest Gifts provide less immediate taxable benefits but can serve to create legacies while protecting the donor family’s financial future. Even deciding between the types of trust vehicles for a Split Interest Gift can involve a balancing of priorities.
Choosing the best Charitable Giving Method is never a one-size-fits-all conversation. Sophisticated donors who want to leave legacies need to consider the numerous aspects of the Methods and establish their priorities to determine which best meets their desired outcome. If you wish to have a conversation about creating your own legacy and which Method best fits your unique circumstances, please do not hesitate to reach out.
Romano & Sumner, PLLC
