Each passing holiday season reminds us of the opportunity to give to others in need, but the truth is, we can deploy our time and money throughout the year and still reap the rewards of giving and volunteering. . While this time of year may spark initial interest in charity, hopefully the benefits you see in your heart and wallet encourage you to find ways to give back throughout the year.
In addition to feeling fulfilled helping others and having a shared sense of belonging with those you connect with through your giving efforts, there are also significant financial benefits to be had. You have different options in how you approach charity, whether you volunteer or donate money or other assets to your favorite nonprofits, and any approach you take will have an impact.
Personal growth, connection and contentment
First, let’s start with your emotional well-being. If you’ve been charitable in any form, you’ll probably recognize the truth in this: Giving back actually helps us feel better about ourselves, as numerous studies confirm. One such study, conducted by professors at the University of Missouri, Columbia, and the University of California, Riverside, found that those who gave to others tended to score significantly higher on feelings of joy. and contentment. (opens in a new tab) than individuals who have not given to others.
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Another study, conducted by psychologists at the University of Chicago Booth School of Business and Northwestern University Kellogg School of Management, showed that we feel good about ourselves for a long time after giving to others.
When it comes to volunteering, a powerful benefit comes from the simple activity of networking – meeting new people – possibly in your current professional role and/or industry. Whether online or in person, creating new professional relationships while simultaneously helping others can be a real win-win. If you wish, you can also talk about your volunteer activities with colleagues and clients or include your passion for giving back in your company’s marketing materials, such as in your company bio.
Those who see you in this new light might even be inspired to give back in their own way. You may even consider recruiting family members to join you; it’s a great way to instill a sense of gratitude for one’s blessings and inspire others to give to those less fortunate.
Another benefit of volunteering is the real potential to sharpen your current skills – and maybe even learn new ones. As a certified financial planner, I have volunteered with several non-profit organizations in recent years to provide pro bono financial advice to those who need it but do not have enough financial assets to support themselves. qualify or pay for services. It’s a wonderful feeling to offer concrete advice to those who are ready and willing to implement it and to learn new ways to communicate that advice.
Remember: The time you spend volunteering for an organization is not tax deductible, but expenses such as travel or parking may be (opens in a new tab).
Reducing your tax bill doesn’t hurt
Another form your generosity can take is donating financial assets to nonprofit institutions. This could very well earn you a tax deduction. Specifically, when you donate cash to a public charity, you can generally deduct up to 60% of your adjusted gross income. In addition, appreciated assets, including stocks and long-lived property, are generally deductible at their fair market value, up to 30% of your adjusted gross income, provided you have owned them for more than a year. year.
For those who must take Required Minimum Distributions (RMDs), donating money from a tax-deferred retirement account such as an IRA can exempt you from having to include RMD amounts as taxable income in the year. where they should be taken. Specifically, you can choose to make qualifying charitable donations (QCD) of up to $100,000 per year that are not included in your annual taxable income.
Your employer may even match your donations up to a certain amount, so be sure to find out if they will.
The bottom line is that all forms of altruism have positive impacts both in the world and in your personal life. The amount of time, money, or both you can share with others in need will vary throughout your life, but the benefits of doing so for yourself and others are both significant and measurable. .
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC-registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees and services, is available at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal trading in securities or to provide personalized investment advice. The information provided does not constitute legal, tax or accounting advice. We recommend that you seek the advice of a qualified lawyer and accountant.
This article was written by and presents the views of our contributing advisor, not Kiplinger’s editorial staff. You can check advisor records with the SEC (opens in a new tab) or with FINRA (opens in a new tab).
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