Tax Planning “What’s Philanpoppy?”
In our practice, regular folks- the “millionaires next door” [www.thomasjstanley.com/pub-books/1/The_Millionaire_Next_Door.html] often do not relate, at first, to the possibilities of philanthropy – until they see that they can do it voluntarily so the government doesn’t make them do it involuntarily. That realization appeals to those innate human drives for autonomy, mastery and purpose.
– excerpt from chapter 4
“What’s philanpoppy?” one client asked. He quickly learned – not only how to pronounce the word but also its many benefits. And today, he is quite active in his giving to his church, as well as several community charitable organizations he cares about. He also restated his trust, zeroing out federal estate taxes in favor of his family’s chosen causes and organizations. Truth is, once the average affluent come to understand how philanthropy can work for them and their families, and that it is not just for the realm of the ultra-wealthy, they want to do more.
Understanding the efficiency – the fundamental frugality – of tax planning to promote philanthropy is quite reassuring to those millionaires next door, for whom frugality and efficiency are a way of life. When they come to see this is a legitimate means to give more to good causes without reducing what goes to their children, they are eager to pursue this strategy.
Still, most people have yet to discover that they can redirect what would have been paid in taxes to charity without reducing what is left to their family or heirs. This type of planning constitutes a large untapped source of potential funding for nonprofit organizations. The millionaires next door tend to show, along with the other values that brought them their wealth, a staunch independence. They are not big fans of the idea of allowing the government to collect more in taxes than it needs, all because the government’s poor planning resulted in their paying more taxes then were required. When they see that philanthropy lets them redirect those taxes as they see fit (within certain parameters, of course), they feel empowered. The idea matches their mindset. They can do their own thing. It even feels entrepreneurial. Soon they want to do more than just redirect taxes – they very often begin to develop a passion for the causes they are helping.
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Greg Hammond, CFP®, CPA is a wealth impact strategist who works with individuals, families, closely‐held and family‐owned businesses, helping them grow and preserve wealth, plan for retirement and manage their charitable giving. You can reach Greg at 1-800-416-1655 or email@example.com for financially intelligent guidance or a Wealth Impact Assessment to show how you can build a legacy of your values, influence, and money without sacrificing your own lifetime goals and objectives.