More on giving

First, some responses to comments.

Jot noted "How can I contribute that maximizes the benefit to the charity with little or no effect on myself." I assume he's referring to the Credit for Contributions to Charities That Provide Assistance to the Working Poor, which I mentioned back in April. But it can also refer to the Tax Credit for Donations to Private School Tuition. Since both offer Arizona Tax Credits, you get back all the money you give on your AZ return, but still get to take a federal deduction. I'm not necessarily enamored with this as tax policy, particularly the latter (higher limits and less "charitable"), but it does have the effect of reducing the financial burden on givers, as it provides free money.

Following up on Joanne's (kind of): our giving for this year is at about a dozen charities--about 1/3 health, 1/4 religious, 1/4 local and one global.

As for Ken's points, they all seem spot on. Our issue is that we're doing our charity backwards. By that I mean we are establishing an annual giving amount that we're comfortable making and then figuring out how to allot that, rather than finding causes we are truly passionate about and figuring out how much we can give. Re the volunteer work, Joanne has volunteered at Paz de Christo for 3 years or so, but I don't think we've made a monetary contribution and I'm not sure why. She also has been a Big Sister in a school program for quite a while, and we give BBBS a small amount.

But the real point I wanted to interject with this follow up is the use of establishing one's own Charitable Fund. Fidelity, Vanguard, Schwab and others all have programs in which you can place funds (cash, appreciated stock) and then make contributions from that.

Among the advantages:

• You can contribute now, but take your time selecting the charities which will benefit.
  
• You can donate appreciated stock, get the deduction for present value and not pay any capital gains (as you would with any stock gift)
  
• You get an immediate tax deduction.
  
• You can easily make a number of smaller contributions in cases where a charity has issues managing single, large donations.
  
• Many charities have difficulty accepting noncash contributions.
  
• You have the option of making truly anonymous donations.
  
• You simplify your tax reporting through consolidation of your charitable activities.
• Greater flexibility in tax planning.
  

The companies do charge some fees (under 1% a year), but that is largely paid for by the investment vehicles in the funds (assuming not a down market). I looked into this early this year as a possible option to move appreciated stock to avoid capital gains, but our prospective tax situation doesn't really require that anymore. The other issue is account minimums and activity requirements, which I reviewed at the time, but I don't know how well it fits with our giving plan (if we're allowed to call it that).