You Are Generous. Give Creatively.

financial planning for attorneys financial planning for entrepreneurs financial planning for retirement Jan 29, 2020

By Glenn J. Downing, MBA, CFP®

Charitable Giving

As a financial adviser, I am privileged to work with many wonderful people who give generously. These are people who want to leave a legacy. These are clients who want to leave money behind which will continue to accomplish the good works the donor did during his or her lifetime. You may see or hear the names of prominent donors – sponsors of a university building or underwriters of Masterpiece Theatre – and think, Well, yes; I’d love to endow this or that organization or charity, but I’m simply not in that league.

Leave a Legacy

Even if you don’t have a lot of spare cash kicking around, you may still be able to leave a legacy. One of the best ways to do this is with life insurance. For a manageable annual premium, you may be able to leave hundreds of thousands of dollars to your favorite organization. It works like this:

Decide which non-profit you’d like to see flourish.

Typically, this is a 501(c)(3) organization such as a church or synagogue, an alma mater, a hospital, or a charity.

Work with the development officer or planned giving department.

Make sure they are willing to accept your gift of life insurance. Typically, the charitable organization itself will apply for a policy on your life, and be the owner and the beneficiary of the policy. You, the donor, are of course the insured.

Make tax-deductible gifts to the charitable organization

That’s right. You don’t make premium payments to the insurance company. You make tax-deductible gifts to the charity, which in turn makes the premium payments.

If there is a specific objective for the funds, or if you desire a certain department to receive the funds at your death, make sure to get this in writing. The receiving organization may have a gift agreement for you to sign, which codifies your wishes.

Here’s an example

My business partner, Jonathan Cameron, when just 31 years of age, made a $100,000 gift to the Honors College at Florida International University – his alma mater. He makes annual tax-deductible gifts to the Honors College of $1500 for about fifteen years. The College owns the policy and is the beneficiary. The policy is structured in such a way that the death benefit will rise through the years. Assuming historical returns, the death benefit at his mortality age (about 90) should be about $1 million dollars!

Life insurance is an excellent way for younger people to give back. It’s a vehicle many starts thinking about later in life. Yet, assuming good health, opening policy in your early years is a cost-effective way to give substantially. 

You Can Probably Afford a Planned Gift

The point: don’t let money keep you from making a planned gift and establishing the legacy you’d like! Insurance policies can be issued, generally, for as little as $25,000. Work with the planned giving officer of the organization you’d like to support. Where there’s a will, there’s probably away.

Get in touch! 

Check out Glenn's piece on Life Insurance as a charitable giving option. Questions? Feel free to get in touch with us at [email protected] Also follow us LinkedInFacebookInstagram, and YouTube for more personal financial information relevant to you! 


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