The holidays are a time for family gatherings and celebrations, often evoking feelings of gratitude, compassion and community spirit. Giving thanks and exchanging gifts with family is a natural inspiration for generosity.
But for high-net-worth individuals, the journey of giving extends far beyond the holidays. Philanthropy and charitable giving are key components of creating a legacy that aligns wealth with the values that matter most, all year ‘round.
When you think of charitable giving you might picture someone handing over a large check at a glamorous holiday gala or anonymously leaving a donation on a charity’s doorstop. While these situations are completely plausible, the reality is that giving comes in many forms.
According to a CEG Insights Survey, a notable 7 in 8 affluent investors wish to make a meaningful impact through charitable activities. Why? Because for many, giving is a direct reflection of their values, and by extension significantly shapes their legacy.
Gifting can meaningfully benefit specific projects and causes, but it also demonstrates the positive influence of wealth to descendants. Individuals from families that practice giving are more likely to value philanthropy themselves. 79% of students and graduates from families who make charitable gifts believe giving is important, while only 30% from families who don’t make charitable gifts value it – further underscoring the importance of instilling charitable values in children.
The challenge for high-net-worth individuals, according to Nicole Hisler, Director of Charitable Solutions at Raymond James Trust Company, is knowing where to start and how best to give.
Finding what motivates you provides the foundation for all future planning. Begin by exploring your “why.”
Ask yourself what resonates most deeply with you. Are you driven by a specific cause or issue? What are some of your biggest accomplishments and how did you achieve them? Has a significant event or experience in your life or your family’s life shaped your perspective? And who are your main financial responsibilities?
With a specific cause identified, ask yourself what kind of change you want to see in the world. Do you want to support immediate relief efforts during the holiday season or do your interests lie in long-term, sustainable efforts throughout the year?
Aligning your wealth, goals and principles is a journey – and a clear understanding of your priorities helps inform how to put your values into action.
Giving circles are becoming increasingly popular among donors, bringing together groups of people with mutual goals and priorities to learn about and support various causes. These circles provide a platform for high-net-worth individuals to collaborate, share insights and ultimately amplify their impact on causes that matters most.
For example, Impact 100 is a global network of women who pool funds and jointly award grants to local nonprofits. Each chapter of Impact 100 operates independently and helps bring attention to the needs of its specific community.
In addition to making financial donations, individuals who want to make an impact often choose to serve on nonprofit boards throughout the year. This allows them to connect with like-minded individuals as well as contribute their time and expertise or networks to advance a cause.
In contrast to socialite donors, there are high-net-worth investors who prefer to give anonymously, using charitable vehicles like donor advised funds to maintain privacy.
While public displays of philanthropy can be effective ways to raise awareness of a cause or inspire others to give, by choosing anonymity donors thoughtfully approach their giving in a way that’s driven purely by their values and the desire to effect positive change. Anonymity does not hinder the alignment of wealth and values; it’s simply another approach to giving that’s motivated more by a donor’s intentions than by their visibility.
A step beyond gifting, values-based investing involves integrating your personal values into the investment selection process. This may be a suitable approach for your portfolio if your goal is to make a positive impact to a cause that’s important to you, while navigating specific risks or investing in targeted opportunities.
The holiday season is an ideal time to reflect on your values and the legacy you wish to leave behind. But self-exploration can happen at any time of the year, and figuring out what matters most to you isn’t something you have to do alone.
There are opportunities to maximize gift giving beyond cash donations through illiquid assets, such as valuable collectibles or marketable securities, which can create a meaningful impact while offering tax benefits – harmonizing your wealth with your values.
Focusing on your financial goals, aspirations and well-being is key to feeling more empowered as you create a comprehensive charitable giving plan.
Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are affiliated with Raymond James Trust, N.A. Unless otherwise noted, Raymond James is not affiliated with any other mentioned organizations. Raymond James does not provide tax advice. Please discuss these matters with your tax professional.
Sources: CEG Insights Survey; GG&A Survey Labs
