Philanthropy

A philanthropist is a person who donates time, money, experience, skills or talent to help create a better world. Whether you are Warren Buffet, Michael Jordan, or a Wilmington local, the gifting principles, tax benefits, and philanthropic rewards of charitable giving are the same.

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Many philanthropists are driven by a deep desire to solve social issues and make a lasting impact. Alongside this sense of purpose, the U.S. federal tax code offers philanthropic tax benefits, such as deductions against income, capital gains, and estate taxes.

Beyond financial advantages, studies show that philanthropy offers other significant benefits, including:

Greater overall happiness
Lower stress levels
Better physical health
A stronger sense of connection to others

You don’t need to be a millionaire to experience the rewards of giving. Philanthropy can be achieved through donating time, talent, or treasure. Educational resources like Boost Your Giving IQ provide worksheets and tools to guide smarter, strategic giving. These tools help you clarify your priorities and create a plan that maximizes your impact.

Popular Approaches to Giving

Modern philanthropists are transforming how they approach charitable contributions. Here are some popular strategies:

1. Impact Investing

Impact investing aims to achieve both social or environmental benefits and financial returns. Also known as social impact investing, this strategy uses markets to generate profit while driving positive global change.

2. Donations of Non-Cash Assets

Instead of donating cash, many donors are choosing to contribute non-cash assets like stocks, securities, limited partnership interests, and real estate. In 2020, two-thirds of contributions to Fidelity Charitable came from non-cash assets, emphasizing the growing popularity of this giving method.

3. Donor-Advised Funds

A donor-advised fund is a charitable giving account that allows donors to make contributions and receive an immediate tax deduction. Donors can recommend grants over time. This flexible, tax-efficient vehicle is the fastest-growing method of charitable giving in the U.S.

By using strategies like contributing long-term appreciated securities or setting up a donor-advised fund, you can significantly increase your charitable capacity. Other options, like creating giving circles, allow individuals to pool their resources and amplify their collective impact. Each approach comes with its own requirements and benefits, ensuring that every donor can find the right fit for their philanthropic goals.