(StatePoint) While contributing to a worthwhile cause is a common aspiration, actually doing so right now may feel unrealistic if you’re struggling with your own finances.
According to an April 2023 Gallup study, 61% of U.S. adults said recent price increases have caused financial hardship for their household—this is up from 55% in November 2022, and the highest since Gallup’s first reading on the measure in November 2021.
“With so many people financially challenged, one may assume that being philanthropic is reserved solely for the wealthy,” says Stephanie Buckley, Head of Trust Philanthropic Services for Wells Fargo’s Wealth & Investment Management division. “Yet, financial support is just one way of being charitable. If you reframe what philanthropy is, you’ll realize you don’t have to be ultra-wealthy to give in a meaningful way.”
According to Buckley, just about anyone can give one of the Five T’s of Philanthropy, which she explains further here:
1. Time: Volunteer hours, mentoring.
2. Talent: Professional, leadership skills.
3. Treasure: Donating goods to a nonprofit organization.
4. Ties: Leveraging your relationships to help others.
5. Testimony: Being an advocate of a charity.
No matter how you go about giving back, you can help maximize your impact with these tips from Buckley:
• Share your experiences: Did you have a great experience volunteering? Is there a cause that’s particularly meaningful to you? Tell your friends and family. Whether you’re on a coffee date or at your child’s soccer game, spreading the word face-to-face is an effective way of advocating for a charity.
• Comb your closet: You likely have more possessions than you actually need or want. Do a thorough clean-out of your home and donate the items or the profits from the sale of the items to a local nonprofit. Not only are you contributing to a worthy cause, you may gain a tax benefit that doesn’t involve opening your wallet. Just be sure to ask for a receipt.
• Pass it on: Children will always remember time spent with their family helping others. From planting trees to participating in a walkathon, there are plenty of family-friendly ways to instill the habit of giving back.
• Be creative: If your days are busy, creatively build giving back into your current schedule. For example, if you’re teaching your teen to drive, incorporate delivering meals to the elderly or infirm into their practice hours on the road. If you’re providing professional advice or tutoring, build video conference meetings into your lunch hour once a week.
• Create an estate plan: Incorporate philanthropy into your legacy through your estate plan in a tax-advantaged way. One smart way to do so, whether you have significant wealth or not, is through your retirement assets. An added benefit from this giving tactic is that nonprofit organizations do not pay taxes on gifts sourced from a pre-tax retirement plan, as your family would. Consider gifting your heirs other assets such as stock or real estate instead.
For additional resources, visit wellsfargo.com.
“Nonprofits need more than cash to operate,” says Buckley. “When a financial contribution is out of the question, consider making a meaningful difference by sharing your time and talents instead.”
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Wells Fargo and Company and its Affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.
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