Xerxes Mullan, Founding Partner at Avestar Capital, firmly believes in the saying, “To whom much is given, much is expected.” If you have heard this pure piece of wisdom, you know it means that we are held responsible for what we have. If we have been blessed with a unique talent, abundant wealth, knowledge, time, and the like, we are expected to benefit others from the same.
The global financial advisory boutique Avestar Capital works with several non-profits across the client networks. The aim is to possess clients who can take advantage of each other’s balance sheet for the art of philanthropy and giving. This network effect is exponential as other like-minded individuals will tend to possess similar principles.
In the United States, financial advisors should report their business and individual incomes on similar tax forms as all other small business owners. Those who function as sole proprietors must report all business income and expenditures on Schedule C, while others must file partnership or corporate tax returns. Income is taxed at the federal, state, and regional levels, and earned income is subject to additional taxations to fund Social Security and Medicare, to name some.
Buying a municipal bond primarily means lending money to a state or regional governmental entity for a set number of interest payments over a predetermined period. Once the bond reaches its maturity date, the entire amount of the original investment is repaid to the buyer. Interest on municipal bonds is excluded from federal taxes and may be tax-exempt at the state and regional level as well, depending on where you reside. Tax-free interest payments make municipal bonds more attractive to investors.
Two of the most-liked charitable vehicles are donor-advised funds and private-owned foundations. As with direct giving, they can both provide a tax deduction to offset a huge income tax year following the sale of, for example, a business, investment assets, or real estate. Some advantages to this could be tax-free growth of assets earmarked for charity and accumulation for strategic deployment and involvement of other family members, including younger generations, in decisions about giving. It will also give a legacy of charitable giving long after death.
Philanthropy’s popularly supposed, to transfer money from the rich to the poor. This is not the case. In the United States, which statistics show to be the most philanthropic of nations, barely one-fifth of the money donated by big givers goes to the poor. A major chunk goes to the arts, sports teams, and other cultural pursuits, and the rest goes to education and healthcare/medical expenses. But what the rich are giving away in their philanthropy is not entirely their own money. Tax relief adds the money of ordinary citizens to the causes selected by rich individuals. Most western governments offer generous tax incentives or rebates to promote charitable giving. This enables a philanthropist to get away with liability for tax on the donation, yet also retain control over and monitor how the money is spent, within the constraints of charity law. Donors may make tax-deductible donations to their family foundation and still, as foundation trustees, remain in control of the investment they make and management of the funds as well the final charitable disposition of the gifts.
Encourage children between the ages of 12-16 to set aside a portion of allowances and monetary gifts to be donated to charity, and at the end of the year help them or select a cause they support to which the funds will be given. This process can be as formal and easy as setting aside a separate bank account and soliciting informational packets from local non-profits, or as informal as purchasing a divided piggy bank or rinsing out an old coffee can. Being involved in the process of giving will help your offspring feel invested in the causes he or she chooses giving them a better understanding. Setting up foundations is a great way to build a family bond around giving back and an even better way to include children in wealth creation as well.
Make your offspring aware of the processes that are crucial to your family’s philanthropy, whether it be the attendance at annual board meetings, grant proposal review and decision-making, or a whole different range of activities. How you interpret and respond to the duties and activities related to your philanthropy will anticipate the way your child views his or her near future responsibilities. Discuss your hopes for your children’s involvement in your philanthropy and listen to your children’s philanthropic aspirations to get to know their mindset.
It’s often said that children learn by example and from what they see, and the greatest way to make sure that charitable donation is a significant and valued part of your children’s lives is to ensure that it plays a crucial role in your own life. Make sure that your children understand not only the charitable tasks, duties, and responsibilities that you and your family take on but also the joy and deeper meaning you derive from these things. Share your experiences with them when things go as you anticipated and share the lessons or learnings you have gained when things don’t turn out as you’d expected or planned. Look at the impact that your role has had in shaping, or reshaping, your family’s philanthropic legacy and examine/study the path you chose to arrive where you are now. And look forward to discovering the paths your children will take or plan to take, and how their talents and enthusiasm will help that legacy grow further and evolve. This will also help mold your children to be fiscally responsible and know ways of life.
A big pillar of Avestar Capital is philanthropy because Xerxes is an outcome of philanthropy. He wants it to be ingrained completely in the values of the firm and prefers clients who want to give back to the community, this as an activity brings happiness as opposed to simply having copious amounts of money, making a big impact on the community.
