As a financial planner in the heart of New York, I've noticed something interesting. While everyone rushes to make their charitable giving decisions in December, the beginning of the year presents a unique opportunity to align your wealth with your values.

As we embark on a new year, it's the perfect time to reflect on our goals and aspirations. While many of us focus on personal resolutions, why not consider how your wealth can positively impact the world? For high-net-worth individuals and business owners, New York financial planning isn't just about growing your assets—it's also about using your wealth to create meaningful change. As a financial planner in this dynamic city, I've seen how strategic philanthropy becomes an integral part of a comprehensive wealth plan.

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Philanthropic Financial Planning

If you're reading this, you've likely achieved a level of financial success that many dream of. You could have built a successful business, climbed the corporate ladder, or made smart investments along the way. But here's the thing: at some point, the question shifts from "How do I make more?" to "What do I do with what I have?"

A client recently told me, "I feel like I'm sitting on a pile of potential, but I'm not sure how to unleash it." That's precisely what we're going to explore today—how to transform your financial success into a meaningful impact.

A comprehensive philanthropic financial plan considers:

• Your Values: Identify the causes that matter most to you.

• Your Financial Goals: Ensure your giving aligns with your long-term financial plan.

• Tax Efficiency: Maximize tax benefits to increase your giving capacity.

• Impact Measurement: Track the impact of your donations to ensure they’re making a difference.

Working with a financial advisor who specializes in philanthropic planning can help you create a giving strategy that aligns with your values and maximizes your impact. At Servet Wealth Management, we help you navigate the complexities of charitable giving, ensuring that your generosity is both meaningful and financially advantageous.

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Money and Values: What Does Your Wealth Stand For?

Before diving into the nitty-gritty of philanthropic strategies, it's essential to take a step back and examine your values. What causes ignite your passion? What legacy do you want to leave behind?

Whether it's supporting education, funding medical research, championing religious or social interests, or preserving cultural institutions like Lincoln Center for the Performing Arts, how you use your money reflects what matters most to you.

Take a moment to ask yourself:

• Are you supporting causes that align with your beliefs?

• Is your wealth creating opportunities for others?

• Are you using your financial success to leave a legacy of impact?

Consider creating a personal mission statement that outlines your core values and philanthropic goals. This will serve as your North Star, guiding your charitable giving and ensuring that your financial decisions align with your deepest convictions.

Aligning your wealth with your values not only benefits others but also brings a sense of fulfillment and purpose. This connection between generosity and well-being is a powerful motivator to start using your wealth for good.

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Financial Planning for High-Net-Worth Individuals: Making an Impact With Intention

When it comes to using wealth for good, high-net-worth individuals have unique opportunities—and responsibilities. Strategic financial planning ensures that your philanthropic efforts are both impactful and tax-efficient, empowering you to make a significant difference with your resources. Here are a few ways to make your money work harder for the causes you care about:

• Direct Donations: Simple and effective, direct donations provide immediate support to charities.

• Charitable Trusts: These offer long-term support while providing tax benefits.

• Donor-Advised Funds (DAFs): Think of DAFs as a charitable investment account. You contribute assets, receive an immediate tax deduction, and recommend grants over time.

• Private Foundations: For those seeking more control, private foundations allow you to set specific guidelines and goals.

Each option has its pros and cons, and the best choice depends on your financial situation and philanthropic goals. Our team can help you determine the best approach to maximize your impact while optimizing your financial plan.

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Benefits of a Donor-Advised Fund (DAF)

One of my favorite tools in the philanthropic toolbox is DAFs—it’s like your own personal charitable savings account. You contribute assets, receive an immediate tax deduction, and then recommend grants to your favorite charities over time.

In recent years, DAFs have become one of the most popular ways to give, offering a simple and effective way to make a difference. According to NonProfitPRO, there were more than 1.7 million DAFS in the United States in 2023, and the number continues to grow.

DAFs are versatile, effective, and surprisingly simple to use. Here’s why they’re a game-changer in the world of philanthropic giving:

• Immediate Tax Deduction: Contribute assets today and claim a tax deduction in the current year.

• Tax-Free Growth: Invest the assets in your DAF, allowing them to grow tax-free.

• Flexible Granting: Recommend grants to charities at your own pace—no rush, no pressure.

• Privacy and Anonymity: Want to support a cause without the spotlight? DAFs can provide that option if you choose.

• Wide Range of Assets: You can contribute a variety of assets to a DAF, including publicly traded securities, restricted stocks, real estate holdings, and even non-publicly traded assets like private company stock or cryptocurrency.

• Lower Administrative Burden: Compared to private foundations, DAFs have fewer administrative requirements, making them easier to manage.

For my NYC-based clients in top tax brackets, the immediate tax deduction from a DAF contribution can result in tax savings of up to 37% at the federal level, plus potential state and local tax savings, depending on your specific situation. For many of my clients, this means saving 40-45 cents on every dollar contributed to charity—effectively making Uncle Sam your giving partner by covering a significant portion of your donation.

The beginning of the year can be the perfect time to start your DAF. Starting early in the year allows you to plan your giving strategy for the entire year and make thoughtful decisions about grant recipients rather than rushing at year-end. This timing also enables you to dollar-cost average your contributions for potentially better investment results.

DAFs also allow you to involve your family in philanthropy, creating a legacy of generosity that can be passed down through generations. Many families use DAFs to teach their children about charitable giving, helping them understand the importance of using wealth to make a positive impact.

Strategic Uses of Donor-Advised Funds

DAFs offer a versatile platform for philanthropic giving, allowing donors to not only maximize their charitable impact but also to strategically align their giving with their financial goals. By understanding the various ways to utilize DAFs, you can ensure that your generosity is both effective and efficient.

Consider these charitable giving strategies:

• Bunching Donations: Combine several years’ worth of donations into one year to exceed the standard deduction. Then use your DAF to spread out the actual grants over time.

• Appreciated Assets: Donate shares of appreciated stocks or real estate to your DAF to avoid capital gains taxes while still claiming a deduction for the full market value.

• Year-End Tax Planning: Use a DAF to make a charitable contribution and secure a tax deduction even if you haven't decided which charities to support. It's perfect for those of us who like to keep our options open (and our accountants happy).

DAF in Action: A New York Success Story

Let's look at how a DAF can work in practice. Meet Michael, a successful investment banker in New York. In a particularly good year, Michael realized he was going to have a significant tax bill. He decided to open a DAF with $100,000 of appreciated stock.

Here's how it played out:

• Michael received an immediate tax deduction for the full $100,000.

• He avoided paying capital gains tax on the appreciated stock.

• Over the next five years, Michael used the DAF to support various New York-based charities, including initiatives through the Robin Hood Foundation—NYC's largest poverty-fighting organization—as well as an after-school program and a local theater company.

• The funds in the DAF grew tax-free, allowing Michael to donate even more than his initial contribution.

By using a DAF, Michael was able to maximize his tax benefits, simplify his giving, and make a significant impact on causes he cares about.

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Beyond Tax Benefits: Why Philanthropy Matters

While tax benefits make philanthropy financially attractive, the true value lies in the lasting legacy you create. In New York's competitive landscape, where success is often measured by financial achievements, your philanthropic leadership sends a powerful message that transcends balance sheets.

Studies have consistently shown that acts of generosity lead to increased happiness and life satisfaction. Whether you're funding scholarships, supporting breakthrough research at institutions like Memorial Sloan Kettering Cancer Center, or contributing to environmental conservation, your giving creates ripples of positive change that outlast your lifetime.

Philanthropy is also a powerful way to unite your family around shared values. By involving your children in charitable decisions, you not only teach financial responsibility but also instill a sense of empathy and purpose. Imagine sitting down as a family each year to review grant proposals or volunteer with organizations you support—these shared experiences can become cherished traditions that strengthen your family bond.

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Business Owner Financial Planning: Using Your Success to Give Back

As a business owner, you have unique opportunities to make a difference. Beyond personal giving, your business can be a force for good in your community. Consider these strategies:

• Corporate Philanthropy: Donate a portion of your profits to local charities.

• Employee Matching Programs: Encourage your team to give back by matching their donations.

• Community Involvement: Sponsor local events or offer pro bono services. Develop partnerships with local nonprofits.

• Sustainable Practices: Adopt environmentally and socially responsible business practices.

Aligning your business success with social impact not only benefits your community but also enhances your company’s reputation and strengthens employee morale. Studies show that companies with strong corporate social responsibility programs attract and retain top talent, improve customer loyalty, and achieve better financial performance.

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The Ripple Effect: How Your Giving Inspires Others

One of the most beautiful aspects of philanthropy is its ability to inspire others. When you use your wealth for good, you're not just making a direct impact—you're creating a ripple effect that can influence your family, friends, colleagues, and even your broader community.

Leading by Example

Your actions carry weight as a successful individual in New York's competitive landscape. By prioritizing philanthropy, you send a powerful message about the importance of giving back. You might inspire:

• Employees to engage in volunteer work

• Peers to consider their own philanthropic legacies

• The next generation to view wealth as a tool for positive change

Strategies for Philanthropic Leadership: Building a Culture of Giving

Consider how you can foster a culture of giving within your spheres of influence.

• Share Your Story: Don't be shy about your giving. Share your philanthropic journey on social media, in company newsletters, or at industry events. Your story could inspire others to start their own giving journey.

• Mentor Others: Offer to mentor young professionals or fellow business owners on incorporating philanthropy into their financial plans.

• Match Donations: Offer to match donations made by your employees or business partners to amplify their giving.

• Educate and Train: Organize workshops and seminars focused on different aspects of philanthropy.

• Leverage the 4 Ts of Philanthropy: Encourage giving through Time, Talent, Treasure, and Ties. This holistic approach allows individuals to contribute in ways that best suit their abilities and resources

• Create a Giving Circle: Invite friends or colleagues to form a giving circle, pooling resources to make a more significant impact on shared causes.

• Recognize and Celebrate Giving: Acknowledge and celebrate philanthropic efforts within your organization or community. This reinforces the importance of giving and encourages others to participate.

Remember, your influence extends far beyond your checkbook. By championing the causes you care about, you're not just a donor—you're a beacon of inspiration. Your actions have the power to ignite a passion for giving in others, creating a ripple effect that can transform communities and even change the world.

As you build this culture of giving, you'll likely find that the rewards are twofold: You will make a tangible difference in causes you support and cultivate a network of individuals equally committed to making the world a better place. In the end, that's the true power of philanthropy—it's not just about the money you give, but the movement you create.

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Board Service: Amplifying Your Impact

One of the most powerful ways to create change is through nonprofit board service. This goes beyond writing checks and brings your expertise, network, and perspective to organizations you

care about. Serving on a board allows you to contribute strategic guidance, foster connections, and help shape the future of a cause you believe in.

Plus, board service often provides valuable insights into the challenges and opportunities faced by nonprofits, enabling you to support them more effectively. For high-net-worth individuals, this type of engagement can amplify the impact of your financial contributions while building a legacy of leadership and service.

Finding the Right Board Opportunity

Finding the right nonprofit board opportunity is crucial to ensuring your involvement is both impactful and personally fulfilling. Consider the following factors when evaluating potential board roles:

• Organizations aligned with your values

• Skills you can contribute

• Time commitment required

• Potential for meaningful impact

• Network expansion opportunities

Effective board service requires genuine commitment, so take the time to thoroughly explore an organization before joining. The right board position will not only allow you to contribute meaningfully but can also become one of the most rewarding aspects of your philanthropic journey.

Impact Measurement: Making Sure It Matters

How do you know if your giving is making a difference? You should not just give and forget. It’s important to regularly assess the impact of your philanthropic efforts. This might involve:

• Requesting impact reports from the organizations you support

• Conducting site visits to see your donations in action

• Engaging with beneficiaries to understand the real-world effects of your giving

• Community feedback

By measuring your impact, you can refine your giving strategy over time, ensuring that your philanthropic dollars are making the biggest possible difference.

Tools for Measuring Philanthropic Impact

• Charity Navigator: This online tool provides ratings for over 160,000 charities based on their financial health, accountability, and transparency.

• GuideStar: Offers detailed information about nonprofits, including their financials, programs, and results.

• Impact Genome Project: This initiative is working to standardize the way social impact is measured across different causes and interventions.

• Theory of Change: Work with your chosen charities to develop a clear theory of change, outlining how your donations will lead to specific, measurable outcomes.

When you regularly evaluate your impact, you can ensure that your generosity is truly making a difference.

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Bringing It All Together: Using Your Wealth for Good

At Servet Wealth Management, we believe that financial success should go hand in hand with social responsibility. We are dedicated to helping you align your wealth with your values, ensuring that your philanthropic efforts create a meaningful and lasting impact.

So, as you set your financial goals for the year, ask yourself: How can my wealth create a positive impact? Whether through a Donor-Advised Fund, direct donations, or board service, aligning your wealth with your values is a powerful way to leave a legacy of purpose and generosity. Our team is here to help you turn that vision into reality.

Are you ready to take the next step to make a difference in the lives of others? Click here to schedule a conversation so we can help you develop a comprehensive philanthropic strategy that maximizes your giving potential while addressing your financial goals. Together, let's turn your financial success into a powerful force for good in the world.

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