The dictionary defines “legacy” as a gift of money or personal property left in a will. On a deeper level, your legacy is what you leave in your wake when you are gone. How your essence ripples beyond your physical existence.
As such, legacies hold the power to shape the community for future generations. So, it is vital that they be supported through thoughtful planning. Including valued nonprofits in your financial planning will ensure your legacy impacts the community in a meaningful way for years to come. Here are three ways to do that:
1. Include Nonprofits in Your Will
There are many ways to create a legacy through estate planning: gifts in your will, retirement plan assets, life insurance policies, trusts, or properties. Consider leaving a portion of your assets to a nonprofit that is important to you and ensure its prosperity. Be sure to discuss your wishes with the nonprofit in advance.
2. Qualified Charitable Distributions (QCDs)
If you have an Individual Retirement Account (IRA) you are likely aware of the required minimum distributions (RMDs) that become mandatory once you reach age 73. Whether you need the money or not, the funds must be disbursed, and taxes paid. QCDs allow individuals 70 ½ years or older to donate up to $105,000 per year to nonprofits from a taxable IRA, without tax consequences.
3. Start a Donor Advised Fund
A Donor Advised Fund allows an individual, family, or organization to make financial contributions which are invested and eligible for an immediate tax deduction. Donors make recommendations for distributing the funds to qualified nonprofit organizations on their own timetable.
As a community facilitator, the Community Foundation serving Southwest Colorado works to increase efficiency, sustainability, and success for nonprofits, while maximizing effective grant-making for philanthropists. Learn more about their donor services at SWCommunityFoundation.org.