Aug 16, 2024

The Life Cycle of Giving: How Your Life Stage Impacts Your Philanthropy

As you go through your life, how much you give – and how you give – will likely evolve. Here's how different stages of your life may influence your approach to giving, and some advice for making the most impact on causes you care about while living out your values:

1. Early Career: Building a Foundation (20s)

 

  • Financial Focus: Pay off student loans. Start a retirement fund. Build an emergency fund.
  • Giving Strategy: Research nonprofits that align with your interests and beliefs, such as on Myte. Give small, regular donations to one or two, such as sponsoring a student through LPGM for $40 per month.
  • Non-profit Partnership: Volunteer your time and talents. Go on an LPGM transformational travel trip to see first-hand the work of our partners and meet the students we serve!

Did you know that naming a favorite nonprofit like LPGM as the beneficiary of all or a percentage of your IRA (or company retirement plan) can minimize taxes imposed on your loved ones after your passing? 

 


 

2. Established Professional: Growing Impact (30s)

 

  • Financial Focus: Max out your retirement contributions. Consider a first home purchase. For some - begin a family.
  • Giving Strategy: Increase donation amounts as your income rises. Explore donor-advised funds, or "DAF"s  (which function like a tax-advantaged charitable checking account) for tax efficiency. Create an estate plan, especially upon welcoming your first child to name guardians and ensure their future. When making a will or bequest, include favorite nonprofits.
  • Non-profit Partnership: Share your skills with organizations that need your expertise through board membership or serving as an LPGM advocate in your congregation or civic group.

 

 

3. Peak Earning Years: Strategic Philanthropy (40s-50s)

 

  • Financial Focus: Aggressive retirement investing. Save for children's education. Involve family in giving decisions and model philanthropy for younger generations.
  • Giving Strategy: Leverage stock donations for tax benefits. Consider charitable trusts for larger gifts.
  • Non-profit Partnership: Build relationships with staff of your favorite nonprofits. Share your ideas and insights of the organization with them and with others.
When you donate appreciated stock that's held for more than one year (and thus qualifies for long-term capital-gains treatment), you can avoid paying any capital gains tax on your holdings.

 

 

4. Pre-Retirement: Legacy Planning (50s-60s)

 

  • Financial Focus: Consolidate assets. Ensure a sustainable retirement income stream.
  • Giving Strategy: Update your will or trust, including charitable beneficiaries, especially upon marriages, divorces, births, and deaths. 
  • Non-profit Partnership: Discuss legacy gifts and endowments with favorite nonprofits and with your loved ones.
Inform the nonprofits you've included in your estate plans that you've done so! While we understand your plans might change, and the amount may decrease over time, we at LPGM delight in formally welcoming friends like you into our Legacy Circle. We also want to fully understand and document how you envision your legacy gift being used. 

 

 

5. Retirement: Impact from Accumulated Wealth (60s)

 

  • Financial Focus: Tax-efficient withdrawal strategies from retirement accounts.
  • Giving Strategy: Donate appreciated assets. Work with a financial advisor to explore charitable trusts for income and tax benefits.
  • Non-profit Partnership: Enjoy seeing the impact of your accumulated giving. With more time and potentially more resources, reflect on the causes that are important to you and make larger, more impactful donations as you are able.

 

 

6. Later Life: Reflecting on Lasting Impact (70s and beyond)

 

  • Financial Focus: Ensure your long-term care needs are addressed. Bequest planning. Open communication with family or loved ones.
  • Giving Strategy: Consider large donations or the sale of complex assets. Explore using a Qualified Charitable Distribution (QCD) from your IRA as a tax-free donation. Continue to review and update estate plans annually.
  • Non-profit Partnership: Enjoy watching your legacy take shape. Work with nonprofits like LPGM to ensure your favorite programs will be supported after you are not here to do so.
Bequests typically transfer cash, accounts, real estate, or personal property to the owner's beneficiaries upon the owner's death. 

 

 

Planned giving is a journey. As your life evolves, reassess your financial situation and charitable goals. Maximize your impact by adjusting your strategies and deepening partnerships with your favorite nonprofits like LPGM.

Contact Information:

Lutheran Partners in Global Ministry Inc.

4570 W 77th St, Suite 124 

Minneapolis MN 55435-5024

T: 612.823.5058 E: office@lutheranpartners.org

EIN: #41-1818525

Whatever stage of life or financial situation you’re in, a trusted financial advisor can help guide you through the philanthropic process. They can help you create a charitable giving strategy that is financially savvy while aligning with your faith, values, and hopes for the future.

For additional information on Lutheran Partners in Global Ministry’s Legacy Circle, contact Bethany Krepela, Development Director, at bethany@lutheranpartners.org or 612-806-0733.