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Steve Jobs and giving anonymously

For all that he achieved in his life in terms of his public image, Steve Jobs was famously not a public philanthropist, unlike his equally titanic tech rival, Microsoft’s former head Bill Gates.

Gates these days is almost as well known for the ongoing good work of the Gates Foundation as he is his private sector success. Jobs, by contrast, kept gates of secrecy around whatever philanthropic impulses he possessed. His giving track record remains shrouded after his passing from pancreatic cancer on Oct. 5, and while his will could shed some light on that, there’s yet no public knowledge of who has the will, when it will be disclosed, and whether charities will get anything.

Here’s what is certain: The death of Jobs has sparked conversation about the motivations and merits that surround anonymous giving. And for those who either eschew the spotlight or hold to a religious tradition that espouses anonymous donation, giving in secret sounds downright attractive.

“Giving is a very personal way of expressing one’s values,” says Kim Gerstman, associate director of development for the Population Council, an international, nonprofit that conducts biomedical, social science, and public health research. “Someone might donate to help fight a disease that impacts them personally — but they do not wish to publicly disclose that connection. And some wealthy individuals are concerned that recognition will translate into being flooded with requests.”

No doubt that highly public figures can do without any extra attention and entreaties from fundraising figures, or less-than-scrupulous people posing as such, says Jason Franklin, executive director of Bolder Giving, a website that shares stories of people pledging significant percentages of their assets to worthy causes.

Or it may involve a multitude of reasons that center around humility and privacy concerns — that “It’s not about me, it’s about the work,” Franklin says. “There’s also often an attractiveness to anonymity as an implied judgment against donors who seek significant recognition and attention for their giving — a feeling that “I’m better than person X because I don’t need my name on a building.”

In those cases, Franklin often asks givers to reconsider. “I try to point out that being public about your giving can be an act of service in and of itself,” he says. “When your name is attached to your gift, others will take notice — whether it be the world noticing a gift from Bill Gates, or, if you’re less famous, just your circle of friends and family taking notice. In being public, we lend whatever reputation and credibility we carry to the organizations we support, which can help raise their profile and inspire others to join us.”

Charitable remainder trusts: How the wealthy give it away and get it back

Though he first attended the Hollywood Bowl more than 30 years ago, Ron Moormeister remembers well those Los Angeles Philharmonic concerts. His voice waxes rhapsodic as he recalls the lineup: Mandy Patinkin, Julie Andrews, a Tchaikovsky Spectacular complete with the bombastic 1812 Overture.

So when he hit it big in 1995 — selling his insurance brokerage firm at age 49 — he decided to help the orchestra and to get a tax benefit too. He used a  charitable remainder trust, or CRT, a creative strategy that allowed him to give away his money, yet still derive funds from it based on a mix of tax deductions and investment.

He started the trust with about $350,000. “I had to get used to the idea a little bit,” says Moormeister, 64. “I thought, ‘Gosh, do I want to give away this money?’ But I wasn’t just giving it away. It was going to work well for me, for others and for my family.” He also wanted to protect his assets from the claims of creditors or lawsuits, equally important factors in his decision to implement a CRT.

So far, all has worked out well. Moormeister set up his CRT with the help of Simon Singer, principal and founder of TheAdvisor Consulting Group in Encino, California (pictured). Under the trust guidelines, Ron guarantees that 25 percent of funds go to the Los Angeles Philharmonic. Yet in setting up the trust, Ron estimates that he’s saved at least $250,000 in tax deductions over time. His initial investment was sheltered from federal and state taxes, and trust money that’s invested grows tax free, much as it does in a retirement account.

This means Moormeister can make money off the CRT without expensive tax consequences. “I could use an investment counselor, but I control the investments myself,” he says, “and I can invest in virtually anything.”

Simply defined, a charitable remainder trust allows you to transfer cash or assets to the trust — from which you may receive income for life or, if you prefer, a fixed term not to exceed 20 years. The income can be paid over your life, your spouse’s life and even the lives of your children and grandchildren. (The guidelines are outlined in IRS code section 664.) In essence, the trust takes advantage of the tax-exempt status of the nonprofit it benefits.

How to avoid phony 9/11 charities

There truly is no honor among thieves.

When it comes to scams, the 10th anniversary of the Sept. 11 terrorist attack on the U.S. is just like any other tragedy that callous crooks have taken advantage of. Fact is, from the days following Sept. 11, 2001, thieves have been using the attacks to pocket your cash by either trying take advantage of interest in donating to help those affected or by trying to get money intended to help victims and their families.

More recently, the anniversary has spurred an increase in scams using the attacks as the hook. With the enormous growth in social networking over the past decade, that is where much of the new attempts to con you can be found.

“Unfortunately, we find that in times like these there are some really, really nasty people out there with ill intentions,” said Adam Levin, chairman and co-founder of Identity Theft 911, which provides identity theft and data breach education and resolution. He warns consumers to be careful of any online solicitations that say: ‘Click on here and see pictures and remember 9/11.’”

Because many of these scams spread through Facebook and Twitter, they aim to steal your personal information — including passwords. “A lot of this has to do with inserting malicious codes in computers,” Levin said.

He warned to be particularly leery of attempts to get you to upgrade your video or picture viewing software, especially when it’s in conjunction with supposedly seeing some images connected to Sept. 11.

Paula Fleming, vice president of the Better Business Bureau in Boston, said there has been a recent uptick in the interest in charities related to Sept. 11. She cautions potential donors to be sure they’re giving to a legitimate organization. “It is wise to be wary,” she said.

Philanthropy: How the major financial institutions are helping

Ten years ago, you would have been hard-pressed to find philanthropy specialists in most private banking and investment firms.  But today, philanthropic services are a major division of most wealth management operations, offering clients a myriad of investment vehicles and services to do good.

“It was an add-on before, something extra that they did to be kind or nice, but I think it’s now a business magnet for dealing with all different parts of an individual’s wealth,” says Eileen Heisman, CEO and President, National Philanthropic Trust.

“They’re not just dealing with private equity investing or alternative investments or making sure the money is going to the next generation through tax planning – philanthropy has become a central part of relationship management because it’s so much a part of a high-net-worth individual’s life.”

Looking to give back by donating your dollars or expertise? Reuters Money interviewed executives from some of the most prominent financial institutions to see how they stack up in the philanthropic space.

Bank of America

What makes the services unique? Gillian Howell,  national private philanthropy executive with Bank of America, believes it’s the “depth and breadth of our expertise and specialization,” that differentiates the bank from its competition. With 179 people, with an average of 15 years experience each working with high-net-worth and ultra-high-net-worth individuals, they boast a national reach with regional and local expertise.

Along with services for individual investors, BofA also manages institutional philanthropy under the group’s Philanthropic Solutions umbrella. “We’ve got a nice synergy between the two of them that makes them pretty unique too,” she says.

Where young, wealthy people find help giving their money away

At an age when most guys still hone their skateboard moves, Jason Franklin got a call from his grandfather’s secretary, asking him if he’d like to get involved in the family foundation.

“Up until that point,” Franklin recalls, “I had no idea we had a family foundation.”

Just 22, Franklin (pictured) began a life-changing journey into philanthropy. Today he gives away one-fourth of his income and serves as executive director of Bolder Giving at the tender age of 31. And like many other young philanthropists, Franklin has benefited from new resources that didn’t exist a generation ago. As he has learned, philanthropy is about more than just giving a check, and that some training is involved.

Franklin hooked up with Resource Generation, a group founded in 1998 that “organizes young people with financial wealth to leverage resources and privileges for social change,” according to its website. Annual events include Making Money Make Change, a four-day conference for young people with wealth, and Creating Change Through Family Philanthropy, a retreat for young people who participate (or wish to) in their families’ philanthropy and are committed to progressive social change.

“We’re definitely training young people 18-35 to get involved in philanthropy, but also helping them get involved in grassroots movements,” says Maggie Williams, 34, who — like Franklin — serves on Resource Generation’s board. She started with the group at 25, and says it’s vast alumni network has been “invaluable in the ways that it has supported me, challenged me, and most importantly provided me with a community of peers.”

Katherine Lorenz got answers and support through The Philanthropy Workshop, run by the Institute for Philanthropy, based in London and New York. At 32, Lorenz, is already a philanthropy veteran: At 24 she co-founded Puente a la Salud Comunitaria (Bridge to Community Health) in Oaxaca, Mexico in 2003.

The Philanthropy Workshop steers 10 to 15 young people through a three-week program focused on impactful giving. “They bring in experts on issues such as the nuts and bolts of grant-making, and you do hands-on work,” says Lorenz, who served nearly three years as the institute’s deputy director. “But the biggest part is understanding what makes you want to be a philanthropist, and what turns you on.”

Young philanthropists go high-tech to reach lofty giving goals

At 29, Michael J. Greene of Chicago is a young philanthropist in the making, though he hardly fits the stereotype. He doesn’t drive a Porsche; in fact, he just sold his VW Passat with 90,000 miles and uses public transit to get around.

Nor does Greene have a huge bankroll to back his pet project, a new website called WorldPennyJar dedicated to disaster relief, health, education and the environment.

Yet Greene is light-years ahead of many in his age group to grasp how high-tech will change giving in the 21st Century. For starters, he’s using the same strategy indie artists now exploit to raise start-up capital: a concept known as “crowdfunding,” and popularized on sites such as Kickstarter and indiegogo.com. To explain WorldPennyJar, Greene produced a 4-minute video and posted it to attract donations.

Greene’s blueprint is a programmer’s dream: As he envisions it, WorldPennyJar would round up purchases made on retail websites — say, an office supply chain or pharmacy — to the nearest dollar. That change would then fill a virtual change bucket to fund a network of charities.

Greene sees WorldPennyJar as ideal for time-strapped givers. “There’s no actual step you need to take,” he says. “It’s just a quick snap decision during the checkout process. And it’s a relatively small amount to ask for, though it really can add up across the Internet.”

With $1,200 raised and another $18,000-plus to go, Greene has his work cut out for him. In addition to the programming challenges, he has yet to convince any retailers to partner up. But sites such as WorldPennyJar demonstrate how young idealists, with their understanding of digital navigation, now team giving hearts with entrepreneurial smarts.

“Philanthropy has been very slow to evolve and discover the web,” says Jason Franklin, executive director of Bolder Giving, a website that shares stories of people pledging significant percentages of their assets to worthy causes. “But being younger, I’m online from the time I wake up to the time I go to bed. My phone is by my bed and the second I wake, I check my email and my Facebook page.”

Charitable giving jumps despite slow recovery

With a depressed housing market, an unemployment rate hovering around nine percent and stocks struggling, you would think it difficult to convince people to give to those in need.  But a Giving USA Foundation report released today shows total charitable contributions — for individuals, corporations and foundations — rose 3.8 percent in 2010 to an estimated $291 billion.

Charitable bequests were up a whopping 18.8 percent last year, rising to $22.83 billion, while  individual giving rose 2.7 percent to $211.77 billion.

Religious organizations reaped the most dollar, representing 35 percent of contributions, while education rose 5.2 percent to $41.67 billion after two years of decline.

The uptick in giving speaks to the altruistic nature of Americans, says Eileen Heisman, president and CEO of National Philanthropic Trust — one of the fastest growing charities and the largest grant makers in the U.S.  She spoke to Reuters about trends in charitable giving and why we need to open our wallets now more than ever.

How has the charitable giving space evolved post-crisis?

If you look at the stats on philanthropy, giving patterns didn’t mirror the market.  I think the worst dip was around three percent, which is not anywhere near the drop in the stock market. There was a segment of wealth and super wealth that still had enough funds to give large gifts, especially with the natural disasters that have happened. Americans have this incredible philanthropic impulse that doesn’t seem to be going away any time soon. With the partial recovery that we’ve experienced, we’ve seen a real increase in our funds the last couple of years.

Has the explosion of social media made it easier for people to give back?

Developing children charity champions

Developing our children into charity champions isn’t rocket science. What it takes is a decision, direction and discipline.

Decision The first step is to decide when to introduce the concept of charitable giving to your children. “A child of about four- or five-years-old can begin to understand the concept,” says Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, Inc. The exercise of cleaning out a child’s room and then taking them, with their old toys and clothes, to a shelter can be an educational experience. It shows that other kids need stuff that they take for granted.

Also understand why you’re trying to teach them to be charitable. “We want our kids to understand compassion and empathy,” says Kate Atwood, founder of Living By Giving blog. It is also about passing down values and commitment to public service. With that understanding, it will be much easier to explain why it is important.

Direction Perhaps the most important part of developing a strategy is to model the behavior for your kids. How can you ask your kids to become involved in charitable actions if you’re not doing it yourself?  Talk about the charities you donate to and why you contribute. Get your kids to talk about what interests and inspires them. The homeless? The environment? Food for the poor?

The charity strategy will change as your child ages. For elementary school-aged kids, let them raise money with a lemonade stand or bake sale. Then have them donate the money to an organization they care about. This is a good way to get them engaged. You can also make sure a portion of their allowance is donated to a charity of their choice. One strategy is to set up the 1/3 plan — your child is allowed to spend 1/3 but must save 1/3 and share (give to charity) 1/3, recommends John Graves, managing director of the Renaissance Group.

But charity isn’t just about donating money — it’s also about giving time. “Family volunteering is a big trend,” says Atwood. “If you build it into the family routine, it will be in their paradigm,” she says. Cleaning up a local park, collecting clothes for a tornado-struck community or walking to raise money for a cause are all good examples of family outings.

As your kids get older, you can encourage group activities with their friends. “I know a family where the older generation matches volunteer time with money,” says Berman. “So if the teenagers are volunteering time, then the parents will donate money,” she says. Another strategy might be to do matching — whatever the child contributes to an organization, the parent can match. Some helpful resources include kidscare.org, dosomething.org, and kidsareheroes.org.

Dear IRS: Where is my tax refund?

Whoo hoo! A refund. Speaking personally, this is the first time in about 10 years that I’ve qualified for a refund. I think it’s because I took this full-time job at Reuters and signed up to have big bucks deducted from my paycheck. And it’s because 2010 tax breaks passed retroactively actually lowered my total tax bill (and those of many others).

This year, the average tax refund is pushing $3,000, according to the Internal Revenue Service. Many financial advisers believe that it is a big mistake to get a big refund. Getting a big refund means you’ve loaned the IRS money all year long without earning a penny in interest. “My gripe with large tax refunds… is two-fold,” Eleanor Blayney, the consumer advocate for the CFP Board of Standards, said in a recent press statement. “First, they make mincemeat of any attempt to manage your cash flow. Second, they often go unplanned.”  She advocates budgeting your taxes as closely as you possibly can to the amount you’ll actually owe when the year ends, and integrating the extra cash you’re not sending the IRS into a reasonable spending and saving budget.

That makes sense, but realistically, with interest rates at their current low levels, it doesn’t matter that much. For example, the average bank money market account is paying 0.63 percent interest a year, according to Bankrate.com. So, even you had the whole $3,000 at the beginning of the year (which you don’t, you’re having it withheld week by week from your paycheck), you would earn only $18.90 a year in interest. If sending extra to the IRS helps you to acquire a solid chunk of change in a way that’s relatively painless, go for it.

The bigger challenge is putting that $3,000 to good use now. If you blow it all on spring shoes and sidewalk cafes, you’ll be sorry. Here are some tips.

* First, find it. The IRS allows you to track your refund online, so you’ll know exactly when it is coming. Of course, if you authorized the IRS to dump it directly into your checking account, and you filed electronically, you should get it in a jiffy. Last year, TurboTax customers who fit that profile saw their money in between eight and 15 days, the company said. Paper filers who insisted on a check had to wait as long as six weeks.

* Attack those credit cards. Roughly one in five Americans expect to spend their refund paying down credit card debt, says Experian, a credit reporting company. That’s good. Because at the average credit card interest rate of 14.43 percent (also from Bankrate.com), that $3,000 will save you $432 in interest in a year. That’s a significant amount of money. If you still owe money on your credit cards and you’re getting a big refund, consider cutting the amount of money you have withheld for taxes, and using the difference for an automatic payment on your credit cards. You won’t notice the difference in your take-home pay, and you’ll be saving 14.4 percent interest on every dollar you pay off. That is better than a refund later.

* Buy more tax savings with it. If you have no credit card debt, you have more options. You can use that refund to invest in an individual retirement account or 529 college savings plan. Either will produce tax savings in the future. Use it to pay for continuing education, and it may well be deductible. Give some of it to charity and there’s another deduction. Of course, deductions are only worth a fraction of the actual cash spent, but the higher your tax rate, the bigger that fraction is. And you get the benefit and the satisfaction of learning something or helping someone.

Philanthropy: How to make even small gifts matter

Giving money away has such an emotional component to it that it’s hard, sometimes, to think about in strategic terms. But the truth is that if you pay as much attention to your giving strategy as to your investing one, you can have more impact and fund more of the organizations you care about without getting sidetracked by requests.

Tom Tierney, chairman of the Bridgespan Group, which advises both philanthropists and nonprofits, and co-author of the forthcoming book Give Smart: Philanthropy That Gets Result, has been thinking about how to make your philanthropy count for a long time. Before co-founding Bridgespan in 1999, Tierney, who has an MBA from Harvard, had been chief executive of Bain & Co. But as he reached his mid-40s, he made a career shift that few on Wall Street understood at the time. “Midway through the ’90s, I started asking, ‘Are there other ways to live my life?’ ” he recalls. “I had a couple of senior partners come into my office and shut the door, and say, ‘are you okay?’ They were expecting me to say I had gotten bad news from the doctor.”

Since then Bridgespan has accumulated heavy-hitter clients like the Bill & Melinda Gates Foundation, the William and Flora Hewlett Foundation and the Rockefeller Foundation. These foundations account for a lot more money than the rest of us, but whatever the dollar amount you’re giving — and whatever you choose to give to — you can benefit by thinking smarter about that decision. “Whether you’re giving $1 million or $1,000, ask yourself, ‘What do you want to achieve with it?’ ” Tierney says. “For most folks $1,000 is a bigger deal than $1 million is for Bill Gates.”

Here’s a few questions to ask yourself to make sure you’re getting the most out of that giving, whatever the number.

What are your values and beliefs? Yeah, it’s basic, and it’s also a hard question. And that’s why it comes first. Most of us start giving willy-nilly to people who ask, or to solicitations that come in the mail. But without unlimited time and resources (and we all face such constraints!), there’s no way to give to everything. “Most of us respond when we’re asked,” Tierney says. “If you give to everyone who asks, you’ll make a lot of $15 or $20 contributions. Maybe it would be better to spend the bulk of your giving on one thing. In business, focus matters. In philanthropy, even more.”

That’s true for the ultra-wealthy, and that’s true for regular givers. “The principles that apply to the wealthy apply also to the less-wealthy because they still have limited resources and limited time,” Tierney says. “The moral of the story is: Don’t wait too long to ask life’s most important questions.”

What’s your strategy? Or to put it another way, how do you define success? “Charitable acts are a means not an end,” says Tierney, whose personal philanthropy includes the Nature Conservancy (where he’s on the board of directors). So once you’ve figured out what you care about — conservation, say — what groups will you choose to give to, how much, and in what time period. While it’s tough to decide how much to give away (and that number depends greatly on your personal financial circumstances), a higher number isn’t always the answer. Today’s story about Madonna’s failed efforts to finance a school in Malawi are only the latest example that large sums of money are not enough. The bigger question is what impact your giving has in changing the world.