I’m frequently asked by clients, “Aaron, I want to give back, but outside of Salvation Army or my church, what are some good charities and how should I donate?” That is a tough question for me to answer. There are so many amazing charities that do great work in their field. Typically, a unique life experience will lead someone towards a particular charity that stands out to them.
This past weekend, my wife Megen and I attended a fundraiser for Project NICU along with two of our very close friends. For those of you who know our story, Project NICU is near and dear to our hearts as our daughter, Aubrie, had a lengthy NICU stay after she was born.
The emotional strain during that time is extremely challenging for all parents involved. Upon reflection this past weekend, Megen and I felt that as difficult as our journey was, there were families who had substantial burden and constant uneasiness for months on end. Hearing some of their stories brought back some raw feelings from our journey, but also reaffirmed the great work that this foundation does for parents that were in our situation.
The foundation provides virtual support groups to parents, mentorship programs, care packages for underprivileged families, and ongoing counseling support during and after their child’s NICU stay. Driving back and forth to the hospital day-after-day can be an isolating feeling, and we feel very strongly about these parents having resources available to them to help make their journey feel just a little bit easier.
To me, the beauty of charitable giving, whether it is providing resources or volunteering your time, is finding something that you are truly passionate about and helping lift others up.
For those of you in retirement that are looking for a tax-efficient way to donate to charity, a qualified charitable distribution (QCD) is a great option. A QCD allows you to make an IRA withdrawal that satisfies your annual required minimum distribution (RMD), but instead of paying tax on the distribution, the funds are donated directly to charity. Clients utilize this approach to minimize tax liability in their plan, which reduces Social Security and Medicare tax, but it also enables the charity to receive more funds than a traditional after-tax donation. Given the high standard deduction we’ve had over the past number of years, this approach often provides more tax benefit than an itemized deduction.
QCD’s can be done after age 70½ with up to $100k of distribution each year – it is a terrific way to withdraw funds from your plan to follow your passion of helping others. If you can minimize some tax burden AND feel good doing so, it creates a double whammy of opportunity!
At the end of the day, figuring out the most efficient way to donate is the easy part – the more fun part is thinking about where you want to donate your time and resources, while knowing you are making a difference in a field you feel strongly about.
Project NICU is an easy decision for Megen and I when we look at this face!