Excerpts of the article included below:
There may be no dumb way to give but there are certainly smart ways to give. With proactive planning, your charitable gifts can make a difference and you can receive benefits that make your gift even more enjoyable. Consider the following options to integrate your financial planning with your charitable giving.
GIVE NONCASH ASSETS
Noncash assets make up a small percentage of charitable giving. From a financial planning perspective, however, these assets can be better to give. They often provide options to improve tax efficiency and estate planning. Many people also find it preferable to maintain their cash so that they have liquidity and flexibility with their finances.
DIRECT YOUR IRA DISTRIBUTION TO CHARITY
A provision in the tax code that is set to expire after 2011 allows individuals making required minimum distributions from IRAs to direct the distribution, or a portion of it, to a charity. Do this and you avoid the ordinary income tax due on the amount of the gift. This can lower your taxable income for the year, which could reduce your overall tax bracket and help you qualify for other tax deductions.
USE A DONOR-ADVISED FUND
For some people, donor-advised funds may be helpful with planned-giving efforts. With these funds, offered as investment accounts by many brokerage and mutual fund firms, the charitable contribution is made to the fund. You receive a tax deduction for the amount of the contribution. You can then make grant decisions, disbursing funds whenever you see fit, to the qualified organizations you choose.
This type of fund can be especially helpful if you prefer to give anonymously. Donor-advised funds are also easier to set up and maintain than private foundations.
If you are not sure where your gift can best be put to work, consider donating to your local community foundation. The Greater Tacoma Community Foundation, and others around the region, evaluate nonprofit organizations throughout the community and distribute grants to support a wide variety of causes.
Regardless of your giving preferences, work with your accountant or tax attorney to be precise about the details or discuss other options that fit your desired outcome.> Read the full article on The News Tribune