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Choosing Beneficiaries For Your Charitable Trust

  • April 27, 2022

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Choosing Beneficiaries for Your Charitable Trust

Setting up a charitable trust can be advantageous for a variety of reasons. These types of trusts can be effective estate planning tools and they offer tax advantages to the individual creating the trust. Regardless of the reason for creating one, once the trust is established, it is the creator's responsibility to choose the charitable organization or group of charities that will benefit from the trust's funds. For some, choosing these beneficiaries is the easiest part of the entire process. For others, narrowing down their charity or charities of choice is an arduous task. Here are some common methods used to choose the beneficiaries of your charitable trust.

Focus on Your Passion

Choosing a charity or group of organizations that reflect your life's passions is a great way to focus your funds on causes that are meaningful to you. For example, Jeffrey Previte is an entrepreneur and executive whose family trust focuses much of their philanthropy on helping individuals battle addiction. As a sober person himself, Jeffrey is inspired by organizations that focus on supporting the sober and recovering communities. Strategic giving that focuses on specific issues can help you to avoid reactionary ad-hoc donations that, while helpful, may not serve your long-term goals. And remember, as your passions shift, you can change your philanthropic plan as needed.

Related: Why Supporting Charity Is Good For Business

Focus on Your Community

For many, ensuring that their donations stay local is a primary goal. This focus helps to narrow down the organizations to those that directly benefit individuals in a certain geographic area. You may choose to connect with a local community foundation to procure a list of relevant charities. Many find that their own community has many more philanthropic organizations than they ever imagined. In addition, connecting to local school systems will reveal scholarship programs that focus on keeping emerging talent local with incentives to study and work in the surrounding area. Giving locally allows you to connect with your community in a very special way.

Focus on the World

If you feel that your own community is already adequately funded, you may feel the need to expand the philanthropic reach of your charitable trust to other parts of the world. Giving internationally can seem scary at first. However, there is an abundance of resources available to determine which organizations are doing the most good in the international community. Non-profit grading websites are available to help you narrow down the charities whose mission and operating procedures most accurately reflect your own mission and goals.

Once you've done all the hard work of setting up your charitable trust, allow yourself to enjoy choosing the organizations that will benefit from the funds. In most cases, you can allow yourself the option of adjusting your philanthropic strategy as you go. As community and world events develop and your passions change, you can add and subtract organizations from the list of trust beneficiaries. Strategic giving may require some research, but in the end, you'll be glad that you put the time and effort into a focused philanthropic plan.