Reflections on The Art of Giving

By Cathleen Wolf

Every seat was taken at the March First Friday luncheon when San Diego Social Venture Partners board member Peg Eddy led a panel on The Art of Giving. These bimonthly discussions help the Partners address a shared goal of becoming more effective givers.

More than 30 years ago, Peg Eddy, CFA, and her husband Bob co-founded Creative Capital Management, Inc. They provide business counseling, financial, estate and succession planning and investment advisory services to families and businesses.

Peg opened the discussion with a question. Why do people choose to give their time, talent and money? The reasons for giving are endless. If you want maximum benefit, it’s best to learn all you can from certified financial and legal advisors who can help you make well-informed decisions, and who understand your motivations, goals and passions.

People who give face three challenges. The first is assuring that the charitable organization is well run. The second is distributing your gifts in a planned strategy that leverages your generosity. The third is developing your own philosophy of giving that helps you set your future course. “There is no grade for the art of giving,” Peg says. “The main goal is to give what you truly want to give, and to try to give effectively.”

First up was Dan Gatto, CPA and founding partner of Gatto, Pope & Warwick, LLP. Dan spans 25 years as the group’s senior tax specialist. “Much depends on your goals,” Dan said, “whether to minimize taxes, provide security for your survivors or facilitate the orderly transfer of assets to beneficiaries and charitable trusts.”

Dan highlighted common mistakes that taxpayers make:

- To get a charitable tax deduction, your contributions must be made to qualified 501 (c) (3) tax-exempt nonprofits (such as San Diego Social Venture Partners and all of its Investees).

- Get adequate documentation at the time when the gift is made. A thank you letter is not enough unless it states the gift type and value. Save copies of your checks or receipts.

Dan emphasized how a planned giving strategy can maximize your tax savings each year.

Peg introduced the next panelist by mentioning the importance of seeking sound legal advice when developing a charitable giving vehicle to manage charitable donations on behalf of an organization, a family or individual.

Phillip Sullivan, Esq. is a Partner in the estates and trusts group of Henderson, Caverly, Pum & Charney LLP. A frequent speaker on estate planning topics, Phil is an adjunct professor and lecturer at the California Western and University of San Diego Schools of Law.

Phil began with a familiar joke: “If you want to pay zero taxes, give all your money to charity.” Most people give to help causes that they care about so the world can be a better place, he continued. “Tax deductions are secondary. You don’t want the tax-deduction train to pull your charitable-giving engine.”

The audience laughed as Phil said that lifetime giving is far more rewarding than giving after death. “Through annual giving, you not only get immediate tax benefits, you see the results of how your money is invested.” He suggests that a trust or estate might “give a percentage rather than a dollar amount for assets that may go down in value.” He emphasized that recent tax and estate law changes must be carefully followed.

Phil explained private foundations and donor-advised funds have grown in popularity as well as scrutiny. Attendees discussed the complexities of interfamily gifting and whether to involve family members in making charitable decisions over money they hope might be theirs.

Peg Eddy added, “the situation is different for every family.” There’s a whole toolbox of giving choices today, she continued. “If you choose what’s best for you and your family – and keep it simple – you’re one step ahead.”

SDSVP Board member Steve Ness concluded the panel with personal reflections. He and his wife Pam joined SDSVP a few years ago after he sold his company (San Diego-based Dynamic Instruments, Inc.). Both had 30 years of entrepreneurial expertise but wanted to learn more about nonprofits. “We enjoy teaming up with others and learning how to be good philanthropists together.”

Steve explained, “For Pam and me, giving was an evolutionary process.” In their early marriage, they made annual donations to organizations they liked. “Philanthropy was all about writing a few checks in unstructured ways, because we wanted to.” In their middle years, their giving was “semi-structured” to support their careers or children’s educations. Most giving was driven by personal relationships – an event, a family illness or something with ties to organizations such as a business, church or school.

“Today our giving is more structured,” Steve said. He and Pam want to give the most (time, treasure, talent) to organizations that support their core values. “But how could we pick the right charities and know they would make meaningful change? We joined SDSVP because we knew that similar community-minded people could help us maximize our time and hone our skills at giving. Together we can help nonprofits build their organizations and strengthen their impact.”

Most attendees felt that effective giving involves a desire to know that their contributions, whether in dollars, expertise or both, can make the world better for themselves and for others.

The discussion ended with several comments on related concerns. Some mentioned the importance of involving (or not involving) children and grandchildren in making choices about family giving. Peg concluded the panel by saying, “for most, it boils down to control. With a well-informed plan, you have the satisfaction of knowing your giving is properly managed and aligns with your unique goals and passions. Alan Sorkin added: “As an organization of informed givers, what a substantial difference we can make.”