Are you optimizing giving?

Are you optimizing giving?
Heather Peeler. (Courtesy photo)

By Heather Peeler

One of the things I love about working at ACT, Alexandria’s community foundation, is that I see a tremendous spirit of generosity in our city. If you were one of the 9,000 people who participated in Spring2ACTion, Alexandria’s giving day, you have experienced one of the many ways ACT supports charitable giving. For nearly 20 years, ACT has partnered with people who are committed to making an impact through their philanthropy. We are honored that so many have selected ACT to pursue ways to be more strategic and intentional in their giving.

Identifying causes you want to support and how to have more impact is a common concern. Our team has helped donors clarify their goals and get to know local nonprofits. When it comes to being a savvy donor, knowing how to give and taking advantage of the plethora of tools available is just as important.

This is also where ACT can be of assistance. The options are numerous: from creating donor advised funds where giving aligns with the unique priorities of each donor, to giving a qualified charitable distribution through your retirement account, to exploring ways to create a legacy by making a planned gift through your estate. Our team is a trusted resource and partner to donors looking to be more strategic and impactful. Here’s our take on the most common philanthropic tools:Donor advised funds work like a charitable bank account. When you open a donor advised fund with ACT, you can recommend grants to qualified 501c(3) organizations in Alexandria or around the country, whenever you wish. You receive a tax benefit when you open or replenish your fund, and the assets of the fund are invested to grow over time. Through our online portal, you can streamline philanthropic recordkeeping.

Because the ACT team conducts due diligence, you have peace of mind that your donation is in compliance with IRS regulations. Some fund holders make grants and replenish their funds at a regular cadence; others choose to build the assets of their fund so that they can make more donations in the future. DAFs are a very flexible tool and can be used to accommodate a variety of philanthropic goals.

Did you know that your retirement fund can be a source for your charitable giving? If you are 70 1⁄2 or older, you can take advantage of a qualified charitable distribution while managing your taxable income. A QCD is a distribution of funds from your IRA directly to a qualified nonprofit organization. Because the gift goes directly to the nonprofit without passing through your hands, the dollar amount of the gift may be excluded from your taxable income up to a maximum of $100,000 annually, with some exceptions. It qualifies as your Required Minimum Distribution. This double benefit – for you and your favorite nonprofit – makes the QCD an attractive option to many people who have seen their retirement accounts grow.

Finally, legacy giving is an opportunity to give from your estate beyond your lifetime. You may have a nonprofit that you have supported consistently over time and have a desire to ensure that the organization has the resources it needs for its work in the future. We work with donors interested in legacy giving. They are looking for ways to be generous and realize their values at a scale that may not be possible during their lifetime. For example, many people may find it difficult to give 10% of their income, but easier to give 10% of their estate. These gifts can also be transformative to nonprofits and support the sustainability of their programs and mission.

Thanks to the vision and support of Gene Steuerle, one of ACT’s founders, we are very excited to announce Think Ahead Alexandria, a community-wide legacy effort to inspire meaningful contributions to nonprofits across the city. During the next few months, ACT will be working with nonprofits and estate attorneys to help get Alexandrians think- ing about philanthropy in their financial planning and estate plans.

Hopefully these resources sparked new thoughts about ways you can act on your generous spirit. Please consult your tax advisor for more specific guidance in alignment with your unique circumstances.

ACT is the home for philanthropy in Alexandria and we are committed to bolstering investment in Alexandria’s nonprofits now and in the future. Reach out to me or anyone on the ACT team if you are looking for a philanthropic partner that shares your commitment to and love for our community.

The writer is president and CEO of Act for Alexandria.