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Philanthropy: You don’t need to be a Gates
or a Buffett to make a meaningful contribution

Provided by RBC Wealth Management
and Dave Dupont

Many of you may be considering supporting, or already support, worthy causes that are important to you. So if you’re thinking about sharing some of your financial success with a qualified non-profit organization, let’s take a few moments to look at some of the choices available.

Where do you begin?

To decide if charitable giving makes sense for you, consider your age, net worth, future income needs, and financial goals. Then speak with your financial advisor and tax professional for help determining which strategy is the best fit for your circumstances and philanthropic goals.

There are many different methods of charitable giving, each with a specific set of benefits. Some of the most common include the donor’s ability to:

• Transform an illiquid asset into an important source of future income

• Restructure a non-diversified portfolio without incurring an immediate capital gain

• Help avoid current capital gains tax on the sale of a business

• Take an immediate tax deduction on a future gift

• Receive an income tax deduction in the year the gift is made

• Reduce potential estate tax liability by reducing taxable estate

Charitable giving strategies

There are a number of tools and strategies, each with its own advantages and limitations that can be used for effective philanthropy:

• Outright bequest of cash

• Charitable trusts

• Family foundations

• Life insurance

• Interest in a residence

• Charitable gift annuities

• Donor advised funds

• Pooled income funds

• Gifts of appreciated property, such as stock

If your gift consists of shares of stock or other securities that have increased in value, you may enjoy several additional benefits. It may help eliminate your capital gains tax exposure, reduce your taxable estate and remove potential future growth of the donated assets from your taxable estate.

The information included in this article is not intended to be used as the primary basis for making investment decisions. 

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC

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