Oct 6, 2011

Sep 21, 2011

The “Cash Only” Giver

Smarter stewardship benefits the ministry and your family.

There is this great little bakery that my family loves. I couldn’t even tell you what it’s called because we refer to it as “The Cash Only Bakery.” I was quite embarrassed when I offered to take good friends to that bakery…my treat! We ordered our food and I pulled out my debit card. The woman behind the counter seemed a bit weary saying it again as she tapped on the sign taped to the counter that said “CASH ONLY.” I don’t frequently carry cash and my friends were kind enough to cover the bill.

According to the most recent data from the U.S. Census Bureau, the average American family has about 11% of their total assets in cash (this includes CDs, money markets, savings, cash and checking). Everything else is in the form of non-cash assets…our stuff. Investments in publicly traded stock are a big item and investments by business owners in their own companies is at the top of the chart as well. Real Estate is way up on the list too. These statistics represent all Americans and Christian givers are no exception. When you really look at it, Christians in America have way more “stuff” than they have cash.

Christians are charitable and many give to their church as well as ministries they care about. When we are asked to give, we generally associate that with cash giving or writing a check.

Look at the Bible. There are certainly examples of folks giving money, but there are also very meaningful gifts in the Bible that were not cash. We see the example of Abel giving the best of his crops. In the New Testament, Mary Magdalene pours out expensive perfume on Jesus before his death. We see another example from the book of Acts:

All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had… For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.

                                                                           Acts 4:32-35

According to the IRS, only about 25% of charitable giving includes gifts of assets while the vast majority are gifts of cash. Christians are giving and being asked to give cash, a small portion of our assets, while more abundant resources are being neglected.

The benefits of non-cash giving.
For a family to write a check to a ministry, they have to have cash in the bank. Wealth, for many of us, may be tied up in other assets. Even wealthy donors may have cash flow issues and struggle with liquidity. Much of the real estate, family businesses, investments and other assets that a family owns were purchased for a cost that is much lower than today’s value. In order to turn these assets into more cash, they must be sold and taxes must be paid. Turning assets to cash may cause a painful tax burden.

With only so much cash to give, Christians must decide what piece of the pie they are willing to give to each ministry. There is a better way to support the church and ministries we care about.

Giving more & giving more efficiently.
If Christian families were to give appreciated assets, they could avoid paying taxes on the gain; because most ministries are tax exempt entities, they won’t pay tax either. You can maintain your liquidity and keep your cash while giving more! Most donors who learn to give non-cash gifts prefer to continue giving more generously through these gifts. Here are a few of the many examples:

 - Small business and big giving.
The words cash flow and liquidity are familiar to the small business owner. Many are still giving cash or writing checks, but the vast majority of their net worth may be wrapped up in their company. A planned giving expert can help these business owners to reduce taxes and improve cash flow by making gifts of their company stock. It is a bit more difficult to gift a non-publicly traded company, but with the right expertise and the right circumstances, small business owners can give a very meaningful gift. A donor may give a lump sum or create a fund that allows them to fund charitable organizations long term. Now the cash that was devoted to giving can help their cash flow while assets that were locked up in their business can be used to support ministry. It is a win-win situation.
- The Tax Procrastinator.
The government makes it easy in some accounts to defer taxes, and many Christians have taken advantage of tax deferral. These assets can feel ‘trapped’ in accounts due to the pending taxes. In fact, we see many families who have amassed all of their savings inside of tax deferred accounts. Billions of dollars are in retirement plans like IRAs and 401ks. When these assets are distributed, the taxman takes his cut. Many retirees procrastinate paying the ordinary income tax and refrain from using these assets, but at age 70½ the government requires a distribution. The IRS allows what is called a Charitable IRA Rollover which allows you to transfer a gift directly from your IRA to a non-profit organization or ministry and NEVER pay taxes on that money!
Similar gifts of highly appreciated real estate or stocks allow donors to drastically reduce taxes. From a business sale to a classic car, real estate to a piece of art--any gift of appreciated property can help a donor and the Kingdom simultaneously.
- Charitable planning aligns donors’ needs with Kingdom work.
Many Christians would be wise in their stewardship to give effectively and avoid taxes, but sometimes these options don’t meet all of their needs. Perhaps someone owns these assets but needs income for life. A charitable gift annuity or charitable remainder trust could create income for the future and a current tax benefit while setting a ministry up to receive a substantial gift down the road.

On the other hand, some donors don’t need any more income today. Oil and gas royalties, rental income from real estate and dividend paying stocks can add to a family’s income when they don’t need it, forcing them to pay higher taxes. Through planning, they can shift a stream of income to a ministry for a term of years until their needs change.

Donors don’t have to split up the cash pie anymore. Not only can charitable planning meet their needs, but it can allow them to give more abundantly. As you make the most of the resources God has given you, you can take your stewardship to a new level as you further the Kingdom.

Seeking wise council.
Some of these assets are easy to give, and painless for a ministry to accept, while others are much more complex. Don’t be concerned if this is overwhelming. You may have advisors who are versed in charitable planning. On the other hand, it may be time to find an advisor that can help you to plan the impact you’d like to make and to unleash your true potential for giving. Empower these professionals to help you give more effectively. Get past the “CASH ONLY” perspective and watch how the Lord blesses your giving.

We can help you with a plan to bring your family together as you build the Kingdom. Our mission is to support clients in their stewardship and in realizing their full charitable potential. Even if you have already implemented charitable giving in your estate and financial plan, we can offer a second opinion to determine if you could be more effective and efficient in your Kingdom focused planning.

Check out our business page at Planning For Stewardship.

Sep 20, 2011

The 10-Day Give

Well, Bob and the folks over at christianpf.com just put up some info on the 10-Day Give. Here are some details from their site:

How it works
1. Sign up using one of the methods above.
2. On October 1st we will send out a reminder notification to everyone signed up to begin their 10-Day Give.
3. Start giving until the challenge ends on October 10th – or just keep on giving!

For more info click here to go to ChristianPF.com/10daygive

Same old management...just a new name!

Well, if you haven't noticed already, this blog has seen a name change.  More and more the topic is focused on stewardship, charitable giving and abundance.  That didn't really go along with the blog title, 'The Aspiring Tightwad.'  Although a life of frugality is a good idea, I agree with Winston Churchill in his saying:

“We make a living by what we get. We make a life by what we give.”

A good friend pointed out that the emails he had received from "The Stewardship Sentinel," were new to him.  He had no idea where they had come from. I was pleased to hear he hadn’t unsubscribed!!!

Same topic, new name: The Stewardship Sentinel

Feel free to share feedback associated with the topic and I welcome guest posts with related ideas.  If you haven't subscribed, you can pick up a feed for your reader or you can enter an email address to the left and you'll receive the latest!

Best Regards,

Adam Miller

Aug 24, 2011

China overtaking the U.S... Sort of.

The infancy of a long trend - China overtakes the US, at least in demand for PCs. Have you prepared your finances for these opportunities?

Read the article by the Sanfrancisco Chronicle

Jul 29, 2011

Are we broke yet?

Stop listening to the media and the hype about the debt ceiling debate in Washington. Here is the one resource you need to keep track of the balance at The Treasury and to answer the question, "Are we broke yet?"


Jul 27, 2011

From Barn Filling to Barn Raising: A biblical perspective on stewardship and giving.

Remember the story that Jesus shared about the rich fool? In the story, the landowner’s fields did better than expected and he decided to tear down his old barns and build new, bigger barns to store his overflow. Read what he said to himself in Luke 12:

“You have plenty of grain laid up for many years. Take life easy; eat, drink and be merry.”
But God said to him, “You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?”

This parable often crosses my mind.

In brilliant contrast, I think back to the barn raisings in the northeast part of our country. A young family would barter for and purchase materials and when the time was right, the community would show up to construct the barn. In an economy, then driven by agriculture, these structures were crucial. Each member of the community would bring unique skills and share those skills with younger generations as they worked together to create storehouses for their neighbors.

I love the picture of an entire community showing up, not to provide a hand-out, but to empower their neighbors, to invest in them, and to teach them how to invest in others.

Most folks don’t own a barn today. If I showed up at my neighbor’s door with my tool belt and offered to help them build a barn, I would most certainly get funny looks. Nonetheless, we do have storehouses today. As Americans, we amass our wealth in accounts and businesses and under mattresses. Many are seeking fulfillment as they attempt to gather more for themselves; always building bigger storehouses. But in the end they are caught, just like the rich fool in Jesus’ parable.

Life that is full. Fulfillment comes, not when we have filled our barns so that we can eat, drink and be merry, but when we accept that Christ loves us. In a parable Jesus shares this command:

“Love the Lord Your God with all your heart and with all your soul and with all your mind and with all your strength and love your neighbor as yourself.”
Mark 12: 30-31

We are instructed not only to love God, but to do it with everything we’ve got. That is exactly what the community was doing when they joined their strong backs, sweaty brows and talents to help their neighbors raise a barn.

Storehouses in heaven through philanthropy. What do you plan to do with God’s money? The message of the bible has not changed. In order for Christians to act as biblical stewards today we must live up to these commands.

As we open our hearts and souls, and come to the realization that our true storehouse is in heaven, we find freedom to engage resources in furthering the Kingdom of God and in loving our neighbors. Perhaps you have skills that you should be passing down to a younger generation. The time you spend as a mentor will pay dividends for generations. Consider investing in the lives of those around you. Take the wealth that you have stored up and look for ways to positively impact your community.

Engage in conversations about the purpose of your wealth with your spouse and your kids. Design an estate plan and charitable plan that will point your children in the right direction, towards stewardship. Involve them in giving decisions and empower them.

Imagine if the rich fool had put in place plans to love his neighbors and to help them build their barns. His last day would have been fulfilling. He would have stored up riches in heaven. The U.S. tax code gives us incentive to act as good stewards. Planning for philanthropy is tax favored and if we don’t act as stewards while we are here, the federal government will take a portion and make decisions for us. Take the time to gather your trusted advisors as you begin to build storehouses that will last.

May 31, 2011

Estate Sale Planning: Realizing the true value of your collectibles.

Growing up, my family would head out every Saturday in search for garage sales. After two or three garage sales, my budget would be spent and I would lose interest. I remember struggling through the three hours of endless garage sales that ensued.

As an adult, I no longer devote Saturdays to garage sales, but if I see one that looks good on the side of the road, I can’t resist. I look for bargains and collectibles; stuff that has history or inherent value. The estate sales are the ones that really surprise me. As I look through endless amounts of items that were too valuable to discard by the owner, being discarded like yesterdays news by the heirs, my heart sinks. Think of the history… the stories behind these items. I usually look for those items and pick them up for a quarter, or a few bucks and imagine the story.

What will your garage sale look like? Are you a collector? Do your children know the heart and soul that you have poured into that collection of prints, or the civil war memorabilia? Do they know the history behind the tobacciana, or the miniature tea sets? Whether your collection is big or small, it has value. It is worth saving!!!

Unfortunately too many heirs will not comprehend the value of these specialized assets. To the estate sale they go. I can hear the conversation now, “Joe, how much are these paintings worth?” “I don’t know why dad ever picked those up, put them out for a buck a piece and if they don’t sell, we will sell the aluminum frames for scrap metal.”

Choosing the right heirs. To the right parties, these collectibles will be priceless. Ask the kids if they understand the value, ask if they are interested in specific pieces in a collection or in the entire set. If not, it’s time to look deeper. Who cares about these items?

Here is an example. A gentleman collected bronze sculptures. He and his wife cherished these items; they enjoyed collecting them together and displaying them in their home and in their yard. The couple worried that the kids had no desire to lug these things around. Meanwhile, on the other side of town, thoughtful citizens in the community were purchasing bronze sculptures and working hand in hand with artists to beautify the community. If this couple were to donate some of their favorite bronze sculptures to the community, they could spread that enjoyment to future generations to appreciate.

The many benefits of donating a collection. Donating collectibles not only preserves those items for future generations, but it offers a nice tax savings as well. Collectibles held for more than one year are taxed at 28% capital gains tax upon the sale, much higher than long term capital gains rate on stocks. Donating these items avoids the realization of that taxable gain.

If this type of property is donated to an organization to sell in a silent auction, or to take to an auction house, your tax deduction is limited to the price that you paid. However, if you were to donate antique farm equipment to the American Heritage Museum down the street for related use, then your tax deduction can equal the fair market value of the donation.

These deductions can be extremely valuable to many folks, especially those in higher tax brackets, or for those relying on tax-inefficient retirement accounts for income. Why not use these deductions to make a huge impact in an organization you care about and put these items to their best use?

In many cases an appraisal is necessary and you should always work closely with professionals that you can trust, including your accountant and attorney to get all the details right.

I’d love to hear about the collections that you love and your thoughts on which heirs or non-profits will treasure them most. If not, please have your kids let me know when the garage sale is!!!

Apr 15, 2011

Understand Where Your Tax Dollars Are Going: Ask for a receipt...

The White House came out with a nice little tool. Plug in the taxes from a recent paycheck or from your tax forms and they will give you a receipt. Really, it's just an estimate, but it gives you an idea of what you are funding with your tax dollars. By being strategic in your tax planning and charitable giving you can take some of the decision making into your own hands. Based on your receipt, is the government funding what you want them to? Over a lifetime, would a non-profit or ministry of choice be better off with some of these dollars?

Apr 12, 2011

The Next Peak on the Horizon: Finding fulfillment and making an impact in retirement.

There are 88 mountains in the United States whose peaks lie above 14,000 feet. Colorado is home to 54 of the “14ers,” as they are lovingly called. Those who aspire to climb these peaks often call themselves “peak baggers.” Some folks try to climb all of Colorado’s 14ers in a lifetime while others have attempted to climb and ski them all in a single year. I am an amateur peak bagger.

I have 12 mountains under my belt, many of which I have climbed more than once. I love to pick a new mountain, look up reports of other’s adventures there, and chart a plan for a group of friends or family. For me, the planning is quite a bit of fun. I love to research, find the best route, pick where we will camp and determine how long the adventure will be. The hike up is enjoyable, but it isn’t the reason I do it. The best part is the view. As you ascend the horizon changes and with each step the view is more amazing. At the top, the panorama is outstanding. I especially love standing at the top reminiscing with others about surrounding peaks, pointing at those we have climbed and discussing those we plan to summit in the future.

Maybe it’s the thin air, maybe the exercise, but life feels more full on the mountain top and a different perspective is good for me. The same changes happen in life. Folks work diligently for years with one goal in mind, perhaps building a business and eventually selling or leaving a career for retirement. As we near that goal, excitement rises until finally, the moment arrives. Many get to the peak and their perspective changes. They say, “It’s all downhill from here.” Folks expect golf and fishing to be enough to make retirement worth while, but the motivation that they once had to reach their goal is gone and in some cases, we see folks feeling lost or purposeless.

There is more… The folks who are most fulfilled in retirement are those who reach the peak and instead of turning on autopilot and coasting, they look around. As they reminisce about their past achievements, they realize that there is more to do. They look out and see other peaks to climb.

For many, up to this point, financial planning has been about creating a pile big enough to ensure that it will last. The estate plan was meant to protect assets, minimize taxes, and dole out money to heirs.

What if planning was more opportunistic? Take your binoculars and look out at the needs. Are there children and grandchildren that you could make investments in that would last, that they would pass on to their children? Perhaps it is an education, maybe teaching them to give back to their community. The assets that you have saved may be around to pass on to future generations, but the investments you make in their lives will pay dividends for generations.

Is there an organization that made a difference in your life as a child, perhaps a ministry, a scholarship that you received, etc? Is there an organization that you can invest in? Are there individuals in your community whose lives could be better, much like yours was made better by the gift you received?

Making a difference is not always about giving away assets. Perhaps your experience could make a positive difference on the board of a non-profit. Think of the people who made a difference in your life. Maybe you could act as a mentor, spending time sharing your wisdom with a student or young professional. They will never forget the impact you make on them. Perhaps your guidance will reduce the heartache and difficulty that they will experience and set them ahead of the curve.

You have worked diligently to climb one mountain. You are there! Now is the time to take in the view and begin plotting a journey forward. I mentioned that my favorite part was planning the trip and inviting those that I care about in anticipation of the great view I know they will enjoy. Invite your family and friends along. Make sure that your trusted advisors are sharing their insight to make the road as smooth as possible. Your new journey has just begun! May you make a lasting impact.
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