Designing a Generosity Strategy

A sound portfolio is designed for growth while also managing potential risks. But for many families, generosity is a key component of their financial portfolio. They want to be able to give regularly and consistently to the causes that are most important to them. A life well spent for many families means giving back to their church, community, and global causes. 

What does it look like to design a generosity strategy when considering your financial goals? Bart Rolen, chief executive officer at Southeastern Trust, serves on the board of multiple charities and foundations, in addition to his service as a ruling elder at First Presbyterian Church in Chattanooga, Tennessee. He has helped a number of distinguished families design their generosity strategy. 

Here are three guiding principles to keep in mind when it comes to generosity?

1. Generosity Requires Intentionality.

Generosity is intentionally reducing your maximum potential gain in order to support other worthy efforts. Southeastern Trust doesn’t believe a life well spent means maximizing your personal comfort. Though you want to enjoy financial security, you also want to improve the world around you whether its through your university, church, or community organizations. Generosity won’t happen unless you make a plan for it to happen.

Many people often delay generosity. They assume there will be a day when money will be lying around in need of distribution. Inevitably, there are always new demands for money. Instead of waiting, generosity has to be treated as a financial commitment like a mortgage. You build it into all your planning in order to ensure it comes to pass. 

2. Generosity Requires Solutions.

There are practical tools Southeastern Trust uses to help clients execute their charitable desires. I serve on the board of The Generosity Trust which offers a no-fee donor-advised fund. A donor-advised fund works like a savings account for your charitable giving. You put money into the fund, receive an immediate tax deduction, and can recommend grants to your favorite charities at your preferred pace.

There are more complex solutions available as well like a charitable lead or remainder trust or even establishing your own family foundation. The solution that is right for your family will depend on the type of assets you want to donate, the value of the assets, and the tax considerations. Whether you want to give every month or give a transformational gift as part of your estate plan, you will need a financial advisor who is familiar with the appropriate solutions to help you reach your goal. 

3. Generosity Requires Strategy. 

I also serve on the board of a private family foundation and have seen the benefits of having a strategy of where to distribute your charitable dollars. The family decided a long time ago the types of charitable causes that mattered most to them. It enables you to say “no” to a number of good causes and go deeper with a handful of causes that excite you the most. 

A generosity strategy needs to consider the following issues:

• Geography: what locations matter to me? For most people, it will be their immediate community while others might be drawn to an impoverished country they’ve visited.
• Issues: what issues matter to me? You need to decide whether you want to focus on education, arts, economics, workforce development, family stability, or some other cause. 
• Distribution: how do I want to spread my gifts? You can give large amounts of money to a few organizations or give smaller amounts to a larger number of organizations. 

The more clearly and confidently you are able to answer these questions, the more excited you will be to give to organizations that fall within your focus. 

Generosity should be a joyful activity, not merely a line item in our expense budgets. It enables families to have a lasting impact on their community. A life well spent is not merely about gaining and consuming. Instead, a life well spent is about giving and sharing. Southeastern Trust has the privilege of walking alongside families to help them achieve their philanthropic goals.