Balance Sheet Philanthropy Explained
By: Greg Ring
Since our founding, philanthropy, or charitable giving, has been a part of America’s lifeblood and DNA. However, over the past few decades, the trends and demographics of American philanthropy have begun to change.
In 2000, 67% of Americans gave annually to charity. By 2018, however, that number had fallen under 49%. Yet, total giving in America continues to rise, with well over $500 billion given in 2023.
This suggests that fewer people are giving more money. Kudos to those folks who are giving generously, but there is also a problem: these generous people, over time, get weary. Even cheerful givers can begin to feel used, like an ATM. Perhaps you understand that feeling?
Balance Sheet Philanthropy changes that conversation. As these trends in philanthropy are shifting, we also have an estimated 10,000 Baby Boomers retiring each day. Many of these Boomers are selling appreciated assets, such as a lake house, farm, rental property, or family business. When they do, they often face the most significant single tax bill of their lifetime: the long-term capital gains taxes on the accumulated appreciation of these assets.
Balance Sheet Philanthropy can help reduce or, occasionally, eliminate these taxes in favor of children and charity. Using tools that Congress put in place in 1969, we can redeploy these tax dollars and give these generous Americans control and direction over the wealth they have created during their lifetime.
It is not uncommon for us to see the tax bill drop by 50% while at the same time increasing retirement cash flow. In the coming months, you will see invitations to various webinars on succession planning for a family business or liquidity events involving income-producing real estate.
Whether you are the CEO of a thriving US charity or someone facing an upcoming liquidity event in the next year or two, we hope these educational webinars will be a valuable resource for you.
If you are ready to explore how we could help you, please reach out to us at (303) 694-1900 or email Paul D’Alessandro at pdalessandro@innovestinc.com.