Today we have a guest post from Miles Young. Miles is a freelance writer who writes about travel, finance, and bugeting…
We’ve all heard of philanthropists like Warren Buffet, Michael Bloomberg, Ted Turner, and Oprah. These high-profile personalities have used both their money and fame to spread compassion and assistance to those that need it most, but most philanthropists keep a low profile. Despite not being household names, their amount of giving to those in need is not held back by their unpopularity among the public. These are the small, but many contributions of freelance investors and financiers. For independent investors, sinking money into charities and philanthropic causes can be a scary proposition. After all, your ROI and overall bottom line often take priority when it comes to loosening the purse strings. However, for those looking to make a difference, there are some great perks and benefits that come with the territory of charitable investing. Here are just a few reasons to consider philanthropy as we move further into 2013.
Improve Your Reputation
Outside tooting your own horn, charitable investing is a smart and classy way to network your business or express your social passion. It’s a responsible way to boost your reputation as a role model in a time when economic crooks and swindlers dominate the media. Even if you cannot afford to pay out much initially, budgeting a little of your time and money every fiscal quarter can make a big difference as your efforts grow and attract more backers. People are inspired by honest efforts to make a difference, and investing in a worthwhile charity only serves to benefit your personal brand and capital.
Tax Breaks and Dividends
Not only does it feel good to invest in a good cause, but charitable investments can also pay out as well. That’s right, those who do good can also take advantage of special tax breaks designed to reward those who give back. This can be done by setting up a pooled income trust. Most people think that trusts are only reserved for the very wealthy. This is a misnomer. In fact, pooled trusts can be set up with contributions that start as little as $5,000.
Most charities will set up the trust for you. All you need to do is meet the minimum requirements for your first contribution. Afterwards, you can pay into as little or as much as you want via cash or even bonds and stock. With each future donation, you can qualify for an income tax deduction. The amount you can get back depends on you or the beneficiary’s life expectancy. Setting up a pooled income trust with a well-managed charity is a great way to plan for your retirement while giving back at the same time!
Market and Grow Your Business
Partnering with a good charity can be a powerful asset when it comes to marketing your business. Just like businesses are always trying to grow out their user base, charities need a target niche. Aligning your business with a charity is a great way to better connect with your target audience’s interests and give back at the same time. To take this concept even further, you may even consider partnering your business with a charity as a co-op business venture. However, be sure a partnership makes sense within you company’s core structure and business model before making that leap.
Investing in charities isn’t a new idea, and just about every successful business and investing firm has had a history with giving back in some form or another. The bottom line is people respect those who go out of their way to prioritize what matters to them when it comes with donating their time and money. For example, the Fisher Brothers partner Ken Fisher has made a real difference in giving back to veterans and military families with his Fisher House Foundation. So whether you donate a small monetary investment, partner with a charity or even start a large non-profit organization, it pays to reach out to charitable causes.