Charitable Giving Can Be A Family Affair

Even with a turbulent stock market and an uncertain tax environment, our clients continue to make gifts to their favorite charitable causes. Many want to continue to benefit these charities after their death and encourage their family members to cultivate a “charitable heart”.

There are several vehicles for charitable giving that can accomplish these goals, but a private or family foundation is something that has served many of our clients well.

It is often thought that private foundations are only for the ultra-wealthy. However, more and more families are finding the foundation to be a viable option, especially when managed by an independent fiduciary such as Trust Company of Oklahoma.

Tax benefits remain a key attraction in establishing a private foundation. These benefits include tax-deductible charitable gifts by the grantor for donations to the foundation as well as income and capital gains being sheltered from taxes save for a modest 1-2 percent excise tax. Yet, philanthropic and family motives also play a major part in the decision to give to others, regardless of tax benefits. The opportunity to have family members across generations work together toward a common philanthropic goal is a driving force for many.

Supporting favorite charities need not end at death. Some of our clients have chosen to provide scholarship funds for particular universities. Other clients have targeted the fine arts. Whatever the causes, clients have a deep commitment to continue their support. Keeping the family together for grant making or choosing worthy recipients can be an enriching family tradition and learning experience for future generations.

A private foundation accomplishes this better than certain other charitable vehicles due to the advantage of family control and the private foundation’s identity within the community even after the donor’s passing The donor can have family members take a leading role in determining what charities will receive gifts as well as have them serve as co-trustees. This family judgment can be helpful as it gives the family the flexibility to direct the mission of the foundation and to accommodate the changing preferences of family members over time.

Preserving and enhancing a family’s values are often an important part of an estate plan. With the assistance of a professional trustee and asset manager, private foundations can successfully benefit your charitable causes and your family for generations to come.