According to some barometers, there has been a recent surge in charitable giving over these, the first few months of 2011. Apparently, a good number of people have figured out that now is a good time to give.
As a recent article on InvestmentNews.com reports, “The Vanguard Charitable Endowment Program, the nation's second-largest, collected about $129 million during the first quarter, a 60% in- crease over the same period a year earlier. Donations out of the $4.8 billion fund totaled $87 million, a 31.2% increase from $66 million.”
Why the sudden increase? The new tax deal reached in December makes 2011 and 2012 particularly attractive years for charitable giving. Conditions are ripe for estate reduction, and charitable giving is one of the best forms of estate reduction.
There is something counter-intuitive to this giving season, though. If estate reduction is the motivation for charitable giving, and if you should be swayed into practicing it yourself, why is it important to do so now, with the estate tax exemption at an historic high ($5 million) and the rates at generous lows?
You just cannot forget the fact that these conditions are temporary, and set to expire at the end of 2012. President Obama, speaking for most liberals, has already voiced his plans on lowering the Gift and Estate tax exemptions far below their current generous rates as well as increasing taxes on the wealthiest Americans. And with the recent (and long-overdue) focus on debt-reduction, wealth transfer taxes are quite likely to experience a resurgence of popularity in Congress.
Experts are recommending that wealthy individuals and families make the most of the existing philanthropy-friendly tax provisions before they disappear. You can learn more about charitable giving in thePlanning Practice Center Charitable on our website.