Planning in the New Year

Posted on Jan 9, 2017 in Community, Family, Planning, Tax

Planning in the New Year

You all know I love to plan. The power of planning comes from setting your intention, and taking action to make it happen. It’s about dreaming, but it’s more about doing.

Starting a new year is a perfect time to set your intention on how you want to affect the world outside your personal sphere. I know I’m not alone in that while I am glad to put 2016 behind me, I’m not altogether too sure about 2017. All the more reason to have a plan about how you want things to go down. It can be overwhelming to figure out where to start. So start at the beginning:

1. FOCUS – Ask yourself what the top issue is for you – it’s overwhelming to try and solve all the world’s problems at once. Believe me, my mom and I tried over numerous cups of coffee. What is the area that you feel most concerned about protecting? Civil rights? Climate change? Women’s health? Choose one (or two, tops) and put your energies here.

When we’re talking about your portfolio, diversification is beneficial. For philanthropic investments, concentrating your giving – of time and money – focuses your precious resources on the specific goal you want to support, and can enhance your involvement in something you care about.

2. Next, DECIDE how you’d like to help. There are three main ways to support the causes that matter to you:

• Gifts to traditional charities
• Gifts to not-for-profits with a political agenda
• Gifts of action

Gifts to Traditional Charities
Our tax code currently provides some incentive for charitable giving, allowing a tax deduction for giving to not-for-profit – and generally non-political – groups. We’re entering a whole new world this year, both with potential changes to the tax code and changes in the political climate.

We don’t yet know how the changes to the tax code will affect charitable giving from a tax perspective. One thing we can know with some certainty is that there will be less spending of our collective tax dollars for social services or human rights protection. Organizations that work in these areas – food banks, civil rights groups, women’s health – are going to need your help more than ever. If they are 501(c)3 organizations, you can take a tax deduction to the full extent of the law as it stands now.

From what we have heard thus far, the new administration is proposing tax reform that stresses simplification, part of which would reduce the number of tax brackets and substantially increase the standard deduction (from $6,300 to $15,000 for single filers, $11,500 to $30,000 for jointly-filed tax returns). Meaning many people who may have itemized and received a tax benefit for charitable giving will now receive no additional tax benefit from this unless their total itemized deductions exceed the standard deduction.

Gifts for Political Action
There are many reasons to give beyond a tax deduction, and giving to groups that lobby or otherwise take political action may now be on an equal footing tax-wise with giving to tax-exempt organizations. Some not-for-profit groups which lobby or otherwise participate in political campaigns don’t have 501(c)(3) status, so your donation may not be tax-deductible.

It’s easy to get overwhelmed by the many areas of need, and you’re going to need to pick your battles. On one of his first post-election shows, comedian John Oliver of Last Week Tonight offered a solid list of organizations you may want to help. Oliver made a very serious call to action on his program, noting that until now we’ve generally felt that the rights of all Americans would be protected by those in Washington. But many may feel that will no longer be the case, and some groups will need help under the new administration. He organized his list by cause:

Women’s health: Planned ParenthoodCenter for Reproductive Rights           

Climate change: Natural Resources Defense Council

Refugees:  International Refugee Assistance Project

Civil rights: American Civil Liberties UnionNAACP Legal Defense FundThe Trevor Project,

Mexican-American Legal Defense and Education Fund

All of these groups, with the exception of the ACLU, are 501(c)3 organizations and donations to them are tax deductible to the full extent of the law. Note you can donate to the ACLU Foundation to make a tax-deductible gift to support their work on civil rights issues.  Here’s a description of the difference: Giving to ACLU or ACLU Foundation: What is the Difference?

If you want to make your own list — and not rely on one from a fake news show — check out Charity Navigator or Guidestar to search for organizations doing work you want to support. You can search by area of interest.  On Charity Navigator you can start with its Perfect 100, charities that execute their missions such that they’ve received top marks for good governance.

Gifts of Action
You may want to take action beyond writing checks. While you can blog and tweet and email and post about how the world should change, coming together with others is what creates a message that cannot be denied.

You can do this without leaving your house. Just last week, plans to alter the House of Representatives independent Office of Congressional Ethics (OCE) were scrapped after thousands of phone calls opposing the move tied up Representatives’ telephone lines. The fight to curb the power of the OCE was not new, nor was the tool used to voice disapproval. You have your First Amendment Rights for a reason. Likewise, over dinner recently with a long-time friend, she surprised me by saying if the new administration rolls out a Muslim registry, she’s planning to register. She is not Muslim nor of a targeted ethnicity. It was her way to disrupt a rounding up of people according to religion or ethnicity, and she was betting it was unlikely that the authorities would come round to arrest a white, middle-aged mom in the suburbs.

I felt obliged to remind her that that was a reasonable bet now, but perhaps not in the future. (See point #3, below).

3. If you plan to act, PLAN to act

You know this is all really leading up to some planning. Whether you give money – for a tax deduction or not – or decide to take action yourself, make sure you plan for it. It will take time out of your already busy lives, to research a charity, to call your Congressperson, or better still, to show up en masse at his or her office. To work on a committee, to meet up with others to plan, to work, to act. It will use nights, weekends, vacation, PTO. And you’re going to need to protect yourself when you do.

When I was in graduate school, a visiting professor taught a course on ethics. I was skeptical about what ethics you could teach to MBA students, but her approach was pragmatic. Specifically, she talked about how to be prepared in case you found yourself working somewhere in which you found corporate behavior to be illegal or unethical. There is often an enormous toll for speaking out, not only in legal costs but in damage to your career in the short- and sometimes long-term, to your social and professional networks, personal financial security, and to personal health. At a minimum, you need to be able to walk away. We all want to be the kind of person who acts when needed, but not everyone feels they can for some of these reasons.

One of the things she taught us was to have a cash reserve. Yes, I’ll always recommend you have an emergency fund. Beyond cash for a short-term shortfall, consider building another kind of reserve. Have “pin money,” bail money, a Go F*ck You Fund, a reserve in case you need to make a change, or end up at Santa Rita after your weekend activities.

A Brave New World
Progress often feels like two steps forward and one step back. We are at the beginning of a new cycle for social justice, and things are going to get bad before they get better. It’s going to take work and sacrifice to make progress. Civil rights, women’s rights, human rights all seem under threat as we move into this New Year.

You can leave it to others. 56% of Californians and 39% of Washingtonians did not vote, they left the decision to others. Don’t leave the work to others. Plan for your part in it, whatever that is.

I’m encouraged by the numerous people in the media, experts in disparate professions, and yes, even some politicians, who understand what is at stake and who are ready to put their time and effort towards moving us forward. Find your cause, find others working towards the same goals, find your tribe. At a minimum, it’s an opportunity to get to know your neighbors, co-workers, kids, parents in new ways. It’s our connection to others that gives us a rich life, and believe it or not, this year and beyond could prove to be some of the most moving and meaningful times we might have. It takes courage, and time and effort. Set your intention: what do you want to look back on with pride at the end of this year? It is a New World in this New Year, and we need to be brave in it.