Philanthropy at Year End

All you can take with you is that which you’ve given away

Peter Bailey in “It’s a Wonderful Life”

The journey from Thanksgiving to New Year’s Day is a sprint this year. A dash from expressing gratitude over turkey in November, to giving generously in December, to new beginnings in January. I don’t know of another film that does as good of a job of covering such complex topics as “It’s a Wonderful Life.” This is a story about a man learning to be grateful for what he has as well as learning the power of generosity. Both his own generosity and that of his community.

You may have noticed a small detail in the movie that amounts to a moral guide for George Bailey. When the fate of the Bailey Building & Loan is resting on the shoulders of young George, he turns to a portrait of his father on the wall, searching for his counsel. Below that portrait, in faded needlepoint, is the motto that you see above. I have a replica of that sign in my office. A gift from my wife as a reminder to keep perspective on my work: I can’t take it with me. The sign is also a reminder about what it means to be charitable, especially within our own communities.

what “It’s a Wonderful Life” can teach us about philanthropy

  • It only takes one. The story tells of how one man became “the richest man in town” through goodwill and decency.  His impact is reflected in the outpouring of support from every life he touched when he was in his moment of crisis. This is in our potential as well, to give generously and reap the benefits of community.
  • Think local.  George was aware of the needs of Bedford Falls because he knew the people and the town intimately, and they knew him.  Philanthropy can be most effective when we know the needs of those around us and can bring resources to bear to help make life better. Are there people right in your community doing good work or in need of support?
  • There is purpose in generosity. Once he embraces his role in serving his community, George understands his life’s purpose. Having seen what life would be like without him, George understands that committing his lifetime to making life better for those around him is a worthy pursuit.

How to Maximize your Giving

Philanthropy takes many forms and at year-end, many of us are thinking about how we can best improve the community with our money.  These are a few thoughts on how you might support your favorite charity.

  • Give the right assets at the right time. In one year, it may make sense to gift appreciated stock to a charitable cause and in other years, you may want to make a qualified charitable distribution from your IRA. Talk with your financial advisor about not just how much to give, but from which bucket to draw. The right gifting strategy for this year may be different from the last.
  • Explore using a donor advised fund. If you are a high-income earner or have a high tax liability in a particular year, you can establish a Donor Advised Fund and receive a charitable deduction for your contribution when it is funded.  You can then spread grants from your fund out over a number of years, while maintaining professional management of your money. In our local area, we have the Lehigh Valley Community Foundation as a resource to help donors navigate this kind of strategy.
  • Consider lifetime gifts and bequests. You may be concerned about giving too much away and straining your financial situation later in life. But you still want to support a favorite cause with what is left at your passing.  There are options including working with the leadership of your favorite charity to plan a bequest that will donate a specific amount from your estate or naming the charity as a beneficiary of an insurance policy.

If you have questions regarding the rules around charitable giving or if you are wondering how to guide family conversations about your philanthropic goals, we would be happy to help you navigate your situation. We are fortunate to have many clients who make philanthropy a part of their financial lives. They truly measure their wealth by the words that the angel, Clarence, inscribes in George’s book at the end of the movie:

“No man is a failure who has friends.”

At Morton Brown Family Wealth we believe that engaging with our community leads to a richer life for all.