First, as others have noted, you need to select your desired charities. Giving $1M plus to a small charity all at once could lead them to over-invest in new programs they cannot support in the long run, even with your gift. As for universities, be aware they often take 30-40% or more "off the top" when you think you are donating to your U's chemistry department or some other specific program. Consider what you want to support and investigate ways you might possibly donate to the program in a way that minimizes support of the U's fundraising and administrative expenses and maximizes funds that go directly to the program you want to support. Some U's are very strict on avoiding/limiting direct gifts to programs and others are less strict.
Second, decide if you want to give your money all at once when you die, or maintain a central charitable trust or other fund that gives out perhaps 5% of your principal each year. If the latter, I highly recommend the Vanguard Charitable Fund (DAF) or a similar fund associated with Fidelity or Schwab. The Vanguard Charitable Fund has both the investment and annual granting functions down to a science. I think they are more effective at funds management and granting, with lower overall investment and administrative fees, than any trust you might set up or any community-based charitable fund you could find. If you use the Vanguard Charitable Fund, you could leave your money to them all at once when you die, which could offset your state or federal estate taxes, if any, or you could donate up to 30% of your adjusted gross income each year in appreciated securities, or 50% of your AGI in cash, and realize significant reductions in your annual income tax.
However you get your money into Vanguard Charitable, you can set up your account so it becomes an endowment grant program at your death, distributing a minimum of 5% of your account's principal each year to your selected charity or charities in proportions you specify. This is more than a conservative 4% withdrawal rate, but depending on stock market performance it could easily become a perpetual endowment. I have chosen eight local charities that will individually receive from 2.5% to .20% of my account's principal each year. Based on careful analyses using Portfolio Visualizer, I have specified 90% of my principal should be invested in Vanguard Charitable's total US stock fund (Investment Fee = .01%) and 10% in their total US bond fund (Investment Fee = .01%). Their only other cost is an Administrative fee that is less than .29% per year once you get over $2M in your account, for total investment and administrative fees of less than .3% of your account's principal each year. I think that beats any trust fund or other charitable fund you could find.
Second, decide if you want to give your money all at once when you die, or maintain a central charitable trust or other fund that gives out perhaps 5% of your principal each year. If the latter, I highly recommend the Vanguard Charitable Fund (DAF) or a similar fund associated with Fidelity or Schwab. The Vanguard Charitable Fund has both the investment and annual granting functions down to a science. I think they are more effective at funds management and granting, with lower overall investment and administrative fees, than any trust you might set up or any community-based charitable fund you could find. If you use the Vanguard Charitable Fund, you could leave your money to them all at once when you die, which could offset your state or federal estate taxes, if any, or you could donate up to 30% of your adjusted gross income each year in appreciated securities, or 50% of your AGI in cash, and realize significant reductions in your annual income tax.
However you get your money into Vanguard Charitable, you can set up your account so it becomes an endowment grant program at your death, distributing a minimum of 5% of your account's principal each year to your selected charity or charities in proportions you specify. This is more than a conservative 4% withdrawal rate, but depending on stock market performance it could easily become a perpetual endowment. I have chosen eight local charities that will individually receive from 2.5% to .20% of my account's principal each year. Based on careful analyses using Portfolio Visualizer, I have specified 90% of my principal should be invested in Vanguard Charitable's total US stock fund (Investment Fee = .01%) and 10% in their total US bond fund (Investment Fee = .01%). Their only other cost is an Administrative fee that is less than .29% per year once you get over $2M in your account, for total investment and administrative fees of less than .3% of your account's principal each year. I think that beats any trust fund or other charitable fund you could find.
Statistics: Posted by fourwheelcycle — Tue Jun 18, 2024 6:17 am — Replies 8 — Views 794