CI RegentAtlantic Private Wealth Tax Planning Philanthropy

Paying it forward – Charitable giving & senior housing

As investors get further along into retirement, it is common to reflect on what impact they have made on those around them, their communities, and the world at large. We tend to focus less on what we have accumulated for ourselves, and more on how assets and resources can be deployed for the benefit of others. And, while leaving a legacy to family is often a priority for retirees, remembering individuals and organizations who have cared for us, or our loved ones, can also be worthy of consideration.

Non-profit Communities and Endowments Funds

According to specialty investment bank Ziegler, 78% of the continuing care retirement communities in the US are established as non-profit organizations.1 These are mission-driven communities—many of which have grown out of faith-based roots. While most of them are private-pay communities, they typically have endowments or “benevolent” funds similar to other charities. These funds can be used to support senior residents who may deplete their own financial resources and are often the backstop that allows these communities to fulfill the “care for life” promise they promote.

Planned giving, or identifying how assets are gifted during and after life, may be an important goal of your individual or family financial plan. Residents at these communities are sometimes motivated to provide financial resources to these endowments as a way to support their neighbors and future generations of residents. And children who serve as estate executors may want to leave a gift in memory of a loved one who received care during their retirement. As Wealth Advisors, we help clients to determine your capacity to be charitable after first making sure you are financially independent.

Other Legacy Giving Opportunities

There are also other ways seniors can provide support to their communities and caregivers. Consider that communities often face challenges maintaining and improving facilities, as well as providing career opportunities for caregivers.

Upgraded facilities can help to attract the next generation of retirees—which helps to maintain high occupancy and financial health for current residents. And for those looking for a visible and tangible gift to last for decades, naming rights have become a popular way to support the construction and development of new facilities, such as fitness centers, theaters or dining facilities.

Labor shortages in senior housing have made it difficult to adequately reward and retain good caregivers, who essentially drive these communities. And while many set up holiday gift funds for their staff, there are ways to make a more lasting and meaningful impact on caregivers—like scholarship funds that may help defray the cost or pursuing education in the fields of healthcare, nursing and social work.

Supporting senior care communities is very similar to the way philanthropic retirees might consider supporting an alma mater. It first starts with realization of value derived from the experience (whether that be education or caregiving). From there, the idea of donating toward an endowment, naming a building or providing a scholarship is the next step.

Fulfilling Gifting Goals with Smart Tax Planning

Costs associated with senior communities may already provide tax benefits related to entry fees and monthly fees in the form of itemized medical deductions. Adding charitable giving to a financial plan may add additional tax benefits to further offset current income. Identifying the appropriate assets to gift or strategies to employ can further enhance the tax benefits, while achieving gifting and legacy goals.

We often hear the phrase “cash is king,” but that is often not the case when it comes to charitable giving. For retirees, it might make sense to reduce current taxable income by using qualified charitable distributions (QCDs) from IRA accounts to make gifts with pre-tax dollars. Additionally, we can look at donating concentrated appreciated stocks in order to minimize capital gains taxes. And finally, if we want to control the timing of deductions and distributions, we can utilize donor-advised funds, if appropriate. 

These varying approaches and their effectiveness are dependent on your unique mix of assets and income sources—implementing one or more should be discussed with your Wealth Advisor in conjunction with your accountant.


ABOUT THE AUTHOR

James Ciprich, CFP®, MBA

James Ciprich, CFP®, MBA

Partner, Wealth Advisor

Jim joined RegentAtlantic in 2007 and has served as chair of the Financial Planning Committee. Serving a broad range of clients, he has a particular focus on retirees considering care and housing options. Jim founded and co-chairs RegentAtlantic’s “Senior Solutions” practice specialty. He is often asked to speak at retirement communities, client events, and is frequently quoted in the media. Jim also serves on an advisory council to the MIT AgeLab. He holds the CERTIFIED FINANCIAL PLANNER™ designation and he has an MBA and a BA in Economics from Rutgers University. He served as an Adjunct Professor at Fairleigh Dickinson University in the CFP® program. Jim is a past president of his local estate planning council, and he has also served as a trustee for Morristown United Methodist Church. In recent summers, he has volunteered with Appalachia Service Project. In a prior career, Jim worked in the music industry where he was awarded multiple RIAA certified gold and platinum albums.




CONTENT DISCLOSURE

This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice. This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy. This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice. We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.

Different types of investments involve degrees of risk. Future performance of any investment or wealth management strategy, including those recommended by us, may not be profitable, suitable, or prove successful. Past performance is not indicative of future results. One cannot invest directly in an index or benchmark, and those do not reflect the deduction of various fees which would diminish results. Any index or benchmark performance figures are for comparison purposes only, and client account holdings will not directly correspond to any such data.

Advisory services are offered through CI Private Wealth and its affiliates, each being a registered investment adviser (“RIA”) regulated by the US Securities and Exchange Commission (“SEC”). The advisory services are only offered in jurisdictions where the RIA is appropriately registered. The use of the term “registered” does not imply any particular level of skill or training and does not imply any approval by the SEC. For a complete discussion of the scope of advisory services offered, fees, and other disclosures, please review the RIA’s Disclosure Brochure (Form ADV Part 2A) and Form CRS, available upon request to the RIA and online at https://adviserinfo.sec.gov/. We also encourage you to review the RIA’s Privacy Policy and Code of Ethics, which are available upon request.

Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.