PERSONAL FINANCE

How to Give Your Time, Talent and Treasure

What mark do you want to leave on the world? What are the values that drive you? What matters most? Whether it's your time, talent, or treasure, giving back can be one of life's greatest rewards.

Philanthropy is being democratized and the individual donor has never been more empowered to make a difference. With just $25, you can make a micro-donation to a smallholder farmer in Peru, help cover upfront costs to build a girls' school in Pakistan, or invest in a diversified portfolio of nonprofits, microfinance institutions, and social enterprises. You can also help support a cause without spending any money at all by joining a campaign or volunteering.

With so many ways to give, it's important to be strategic about your philanthropy so you can make the most of your contributions. Once you know what you want to accomplish, it's time to think about how you can put your time, talent, and/or treasure to work. In this article, we lay out a framework to help you determine your own approach to giving.

Clarifying why you give

No matter how you give, the "why" is the foundation of your philanthropic journey. To help clarify the purpose of your giving, try crafting a philanthropic mission statement. If you have yet to create one, reach out to your Financial Advisor to learn more about how this exercise can help establish your personal giving framework.

Designing Your Philanthropic Portfolio

Similar to your investments, when it comes to your philanthropy, it's important to create a balanced portfolio that reflects your interests and values. By thinking about your philanthropic commitments in the following three buckets, you can focus your efforts more effectively:

1.CORE: The organizations, causes or themes where your primary passions lie

2.COMMUNITY: The causes you want to support because of where you live and the networks you're a part of (e.g., your alma mater, the local art museum, a friend's nonprofit, religious organizations)

3.IMPULSE: The causes you don't see coming and can't plan for (e.g., disaster relief, fundraising events)

HOW YOU GIVE

Time & Talent

One of the ways to help support causes and organizations you are passion about is by volunteering your time and talent. A big advantage of volunteering is that it can allow you to see the direct result of your contribution. When you donate a dollar to charity, you may not always see how that dollar is put to work, but through volunteering, you can witness your impact on people and organizations first hand. Sharing your time and talent can also be a great way to connect with like-minded peers and gain practical insight into the nuts and bolts of how a nonprofit works.

WINNING PLAYS for Young Philanthropists from Melanie Schnoll Begun:

• Start locally. Time is your most constrained resource, so start local to help ensure your ability to show up or deliver.
• Align your philanthropic work with your career and professional skills. Consider how you can support a nonprofit with your skillset. As a young professional with an entry-level job, a nonprofit environment can give you the opportunity to learn skills that are usually reserved for professionals with more experience.
• Take advantage of available resources. If you are still in school, take advantage of available coursework such as classes focused on nonprofits, (social) entrepreneurship and management.
• Work at a nonprofit. If you have summers where you can afford to forego a salary, consider working at a nonprofit. Working at a nonprofit can help make you a better philanthropist by providing in-depth exposure to day-to-day operations and nonprofit management.
• Write a public narrative. This can be a helpful exercise when you are applying to a Junior Board as a young professional with a limited resume and budget. A good narrative addresses three key perspectives:

• Who you are as an individual
• Who you could be for their organization and the value you could bring
• Who you could be for the community that their organization represents

Treasure

Giving away your treasure can get a little more complicated. One of the most common strategies is donating directly to a charity, but there are plenty of other approaches to consider. Speak to your Financial Advisor about the pros and cons of each approach and how you can incorporate giving into your broader financial plan.

Here are some of the various ways you can put your charitable dollars to work:

1. Direct donation
A direction donation is a gift that is received in full by the recipient of choice. Nonprofits that file for 501(c)(3) public charity status are eligible for tax-exempt status, and therefore the government allows you to deduct any direct donations from your taxable income at the end of the year.

2. Donor-Advised Fund (DAF)
A donor-advised fund operates similarly to a private foundation, but is held by a public charity instead of the individual donor. As the donor, you recommend the organizations that are to receive grants from the fund, but all administrative duties and taxes are handled by the charity.

Tip: Young philanthropists may consider a DAF because you can open an account with a much lower starting amount, no start-up costs, and lower ongoing expenses and still have a formal structure to organize your giving and track the results of your generosity. It also provides the opportunity to set aside money for gifting during peak income years so that you can continue to give going forward.

3. Designating a charity as a life insurance beneficiary
Another way to share your treasure is to designate a charity as a beneficiary on your life insurance policy. This is relatively easy to do, and you have the right to revoke the gift at any time by simply changing the policy's beneficiary. While this type of giving may provide an estate tax deduction, you will not receive any income tax benefits.

4. Charitable TrustsThere are two main types of charitable trusts: Charitable Remainder Trusts and Charitable Lead Trusts.

5. Pooled Income Fund (PIF)
A PIF is a charitable fund established and maintained by a qualifying nonprofit organization, providing a lifetime stream of income based on each donor's share of the income earned by the fund. A PIF is similar in many respects to a Charitable Remainder Trust. After your death, the balance of the fund is distributed to the charity that maintains the fund.

6. Charitable Gift Annuity (CGA)
A CGA is a contract between you and a qualified charity in which you make a gift to the charity and, in exchange, the charity provides you (or other annuitant(s)) with a lifetime fixed income stream. Generally, CGAs are established by donors who are 65 or older.

7. Private Foundation
A private foundation is a nonprofit organization created with endowments from individuals, families or corporations. Private foundations are required to give away at least 5% of their netinvestable assets each year.

Before making a commitment, make sure to do your due diligence so you can identify the right opportunities, manage expectations, and ensure accountability. There are a variety of resources that can help you do your homework such as a nonprofit's website, its financial reports, any recent press about the organization, third party evaluators like GuideStar or Charity Navigator, and a Philanthropic Advisor.

There are countless ways to use your resources—money, time, networks, expertise, and perhaps even social influence—to affect social change. Once you have identified the opportunities that are most aligned with your passions, the key is determining how you can allocate your time, talent, or treasure to make the greatest impact on the causes you care most about.