Donor’s Corner: Charitable Fund Owner Sees Tax Benefits & More
Dan Bean knows a lot about YouthBridge and relies on his Charitable Giving Account with YouthBridge for much of his family’s philanthropy and associated tax planning.
“I always had a great deal of respect for the board, its mission and the work that YouthBridge does,” says Mr. Bean, managing partner at CMA, a St. Louis-based management consulting firm. Which is why he approached the YouthBridge board about joining them in 2007.
“YouthBridge was partnering with many of the same organizations that my consultancy was serving in the area of children and youth causes,” he says. “It seemed like a natural fit.”
Mr. Bean has been a board member ever since. He is also a client, having opened his own Charitable Giving Account through YouthBridge more than four years ago. “If you’re a board member for a nonprofit, I believe you should support that entity to the best of your ability,” he says.
In addition to addressing his philanthropic goals, Mr. Bean quickly discovered that his charitable fund provides other important benefits.
“I find that my Charitable Giving Account offers considerable flexibility in managing my tax situation,” he says. “It allows me to contribute more or less in a given year, depending on whether it makes sense to accelerate or defer my deductions.” At the same time, decisions around tax planning do not affect his ability to make contributions as he wishes. “Overall, when it comes to timing my donations,” he says, “there is great flexibility.”
In 2013, when Mr. Bean found himself in a higher income-tax bracket, he decided to increase his charitable contributions in order to claim more deductions. “I anticipate that contributions to my charitable fund will vary over time, as income from my business changes,” he adds.
Someday, Mr. Bean will sell his business. As a 50% owner in CMA, he plans to time his charitable funding in conjunction with the sale of his ownership stake.
“If my tax rate on ordinary income is higher just prior to the sale,” he says, “I may increase my Charitable Giving Account funding then. Or, if my capital gains will be substantial with the sale, I may concentrate my funding post-sale given those tax considerations.” To decide the best course, Mr. Bean plans to perform a thorough tax analysis with both his financial advisor and YouthBridge philanthropy advisor.
“My goal is for this charitable fund to support my lifelong philanthropic wishes by the time my business is sold,” he says. “So, I’ll be giving everything careful consideration.” In the meantime, he is using his charitable fund to share the gift of giving with his family.
“Part of my goal with having a Charitable Giving Account is to engage my family in philanthropy,” he says. “We’ve started doing so already, by using the holidays as a time to gather my daughters and grandchildren to decide the charities we plan to support for the coming year,” he says.
Sitting on the board of YouthBridge Community Foundation offers Mr. Bean a first-hand perspective of the benefits that charitable giving can offer a community. “It’s a source of tremendously good feelings, to be a part of this organization, which is both new and old in many respects,” he says. “While the expression of its mission has certainly evolved in the past 137 years, the one constant has been YouthBridge’s commitment to serving children and youth in need.”nbsp;
For information on opening a Charitable Giving Account through YouthBridge Community Foundation, contact a YouthBridge philanthropy advisor at 314-985-6778.