From the August 2007 issue of Boomer Market Advisor • Subscribe!

Make a charitable impact on the community

This issue of Boomer Market Advisor is dedicated to charitable giving -- in particular, helping advisors and wealthy clients with their gifting strategies. With this in mind, I thought I'd switch from my normal data-driven mutual fund analysis and ask the publishers to allow a general editorial comment on charitable giving.

My nine-year-old daughter recently complained about my decision to make her wait for a new toy. She tried the proverbial guilt trip, and argued that she should have the toy because her friends were "so lucky" to have already received it. Nice try. It was an opportunity to teach her an important lesson, and I noted that luck had little to do with her friends' ownership of the toy. Luck is a function of chance, and her friends had it because they were fortunate, not lucky. She understood, and can now distinguish between luck and fortune.

Let's face it -- we Americans are a fortunate group. Our society has experienced an incredible increase in wealth as a result of positive global economic conditions. Perhaps we can attribute some of our good fortune to luck. But more likely, our wealth can be attributed to our values -- a solid educational system, respect for others, the advancement of our capitalistic system and good, old-fashioned hard work. The question now faced by many is the best method for donating excess wealth in a manner that complements these values.

They continually face the issue of deploying their contributions in a tax-efficient manner that maximizes the long-term value of their gifts. Yet all donors, regardless of wealth, face the fundamental challenge of determining how and where their gifts make the greatest impact, particularly when donating in their own communities.

After more than 25 years in the investment management business -- a period good to many of us -- I find myself willing and able to return some of my own good fortune to my community. Like others that are reviewing strategies for charitable giving, I am reminded of one of my mother's many clich?s: "Charity begins at home." It sounds trite, but for many donors the best use of charitable resources is closer to home than we may realize.

I think it's just as important to look for local charitable opportunities as it is the global community. For me, the most important gifts I provide my fellow residents are my time, support for our youth, support for local educational programs and the accompanying financial resources required to assist those of us that are less fortunate.

Schools need financial support for their libraries, computer labs, classroom equipment and lunch programs. They also need the gift of time from caring parents who make themselves available to help with after-school sports, art classes and tutoring programs. Additionally, there are local recreation centers that need support with fundraising activities to provide our youth with opportunities to participate in safe and healthy activities -- those that teach new skills and foster a sense of community that is critical to a sustainable society.

If we earmark our time and financial resources toward fostering the education of our young in all stages of life, our society as a whole benefits greatly. If the expression "time is money" holds any truth, we'll find dividends in attending to the education and development of the next generation - our future leaders. When thinking of charitable gifting, remember that time is one of the most valuable assets, and there are always those in your local community who will benefit from the personal, as well as financial, resources of your clients.

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