You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now, tighten those purse strings and open those ears. It's the money talk with Tiff podcast. Hey, everyone. I am so excited because I have a UNCG alum on the line. So, for those that don't know, I graduated from UNCG, and his name is Dean Castaldo, and he's here to talk to us about philanthropy, which we've never talked about on the podcast before that I can recall. So, hey, Dean, how are
you? I'm doing very well, Tiffany, and glad to be here. Thanks for having me. Yes, thank you so much for coming on and talking about this important topic. So, first and foremost, let's just lay the groundwork for our audience. What is philanthropy? Hmm. So, in the broadest sense, philanthropy is a way that virtually everyone, regardless of where you are in your career or in your life, it's a way for you to find the cause that you are most passionate about and support it. Specifically, we're
talking about with money. But money has a lot of different meanings, and you can do a lot of really good work and support your cause through a number of ways. But generally speaking, we're talking about making a donation to an organization that you care deeply about. Gotcha. Gotcha. So, if we have people listening, and they're like, well, Dean, Tiffany, you know, that sounds amazing, but what type of options do I have for this?
Like, you know, a lot of people think of philanthropy, and they think about celebrities or, you know, they might think about organizations or something, but what are the different options? If somebody was like, you know, I want to leave something later on down the road, what could that look like? Yeah, great question. So, one, I would start by saying philanthropy truly is within reach for the vast
majority of folks. And while we often think of philanthropy as being something limited for high net worth or ultra high net worth, really wealthy individuals, even if you're a young UNCG grad, there are ways that you can support your alma mater or support your local habitat for Humanity,
et cetera, in a very impactful way. And so one of the things I encourage folks in my role is, depending on where they are in their life and how much they are looking to or how much is allocated in their budget to support their cause of choice. We often talk about deferred gifts, or sometimes you'll hear them
called planned gifts. And so these are actually a really nice way to pledge your support for an organization through something like, for example, let's say you have a 401 or a 403 B, or an IRA or a small brokerage account, even a Robinhood account or acorns, any of these organization, any of these entities, when you establish an account, you have to also create a beneficiary of that account. So in the event that something happened to you,
who will be the recipient of those funds? Whether there's $5,000 or $5 million in that account, it's got to go somewhere. And for most folks, the last place you want to go to is to the government. So it's a great way, or it's a great option for you to designate an organization. So, for example, my wife and I, we did something very small, probably a couple of years ago, where we, we designated UNC Greensboro as the beneficiary of one of our
retirement accounts. And so, you know, many, many, many years down the road, when something should happen to us and life takes its natural course of action, then a certain percentage of those accounts will go to very specific programs and scholarships. And so deferred gifts is one way that designating a beneficiary of a current use account for a deferred gift is one way that you can benefit your nonprofit of
choice. Interesting. So if someone wanted to designate, you know, a charity or nonprofit or whatever as the beneficiary, could it be with any account? So, like checking savings, or is it limited to investment accounts? Yeah. So good. Good question. For the most part, you would have a transfer, what's referred to as a transfer on death designation. And
for most accounts, it's as simple as going online. You could log in whether you have a Charles Schwab account or a chase account, whatever the financial institution might be. And it's really a three to five minute process where you go online and you say, x percentage of this account goes to this legal entity. And typically organizations, certainly well established organizations like a university or let's say the wounded Warrior project or something like that, they provide you the
information on their website. So they will say, you list our official legal name, here's our exempt id number, and here's our official address. And the institution that is holding the account that you are trying to make the designation with, they ask for that information, you put it in, and you press submit, and literally within 60 seconds, you get an email confirmation that says you have a new beneficiary
designation. And the great thing about this particular option is, one, if you are uncertain of how much money you will need from that account throughout your life, this gives you some flexibility. You're promising a percentage, as opposed to committing $100,000 or $5 million. So if you live until you're 110 years old and there's only $10,000 left in that account, what you've committed is a percentage of that $10,000. And so it gives you a lot of
flexibility in that regard. But the other thing that's nice for, let's say, relatively young grad who's just getting started, not really sure what their family plans will look like, how many kids they will have, whether they will get married at any point. You can change these beneficiaries. You could make a beneficiary designation today and then three weeks from now, say, well, I've
decided to prioritize another organization. You literally go back online and you change that designation in real time. So it offers a lot of flexibility, but it also affords you an opportunity to get more closely aligned and connected with your organization of choice. And it really is a popular and meaningful way to support, at least in the interim. Very cool. Very cool. So I know that there's tax advantages
while you're living. Are there any tax advantages to, like, a philanthropy philanthropic gift like this once you pass away? Yeah. Great question. So this is where I have to put my disclaimer out there. So you should always check with your personal advisor. And in my role, my day job, we always tell folks the same thing. They should always talk with their estate attorneys and their wealth managers to ensure that whatever tax advantages may be afforded to them are, in fact,
available to them. But there's a lot of nuances as to whether or not a disbursement from your estate to a nonprofit does, in fact, create or mitigate tax circumstances. And so it's, in short, it's likely that for many people, you're not even worried about estate tax, because it's a relatively high threshold, and there's a lot of ways that you can transfer those accounts to your spouse tax free. You can transfer those accounts to children tax free, or at least tax
deferred. And so there's a lot of reasons why you would not transfer or designate a beneficiary on one of your accounts outside of immediate family members. So I'm being a little bit careful here, but the short answer is, yes, there may be some tax advantages to that estate, particularly if you're talking about higher net worth
estates. And, you know, which is why, you know, we often hear about, you know, somebody who's named a school at Harvard or MIT or Johns Hopkins, you know, how, or even quite honestly, if you read the newsletters out of UNC Greensboro, a lot of folks who have made their designation through an estate gift, why they would very carefully plan how much they are leaving to the university, because they know that if that particular dollar amount was going to some other heir or some
other recipient, that it would incur a significant tax bill associated with it. Leaving it to a nonprofit saves on those taxes, but also impacts, positively impacts their organization. Yes, yes, and yes, we do disclaimers around here. Cause, you know, this is just to spread ideas and information. It's not going to be specific to your situation. So, like Dean said, make sure that you talk to your financial planner or a financial professional to see
what works for you. But with that being said, okay, so we know that we can do beneficiaries. Is there any other way that we can leave money to causes that are important to us? Yeah, absolutely. So then the other very popular way. So we'll set aside what folks, a lot of folks understand. Of course, you can make a gift with credit card. You can always send cash and check institutions. I don't know of a single institution that would not take those kinds
of gifts. But another way is you can, depending on your family setup, if you have a will or a trust. And by the way, trusts aren't just for the extremely wealthy. You know, depending on your circumstances, many average middle class american families, you know, leverage the power of various trust structures for their financial situation. You can write, have your estate attorney write in specific organization to benefit from whatever assets are left in your
estate. And this is great, because, again, you know, when the time comes, you will not have a say. You will not be around to say how much you loved your alma mater or how much you love the humane society or whatever the cause might be. But specifically listing that in your estate plan so your official estate documents is a great way to make that gift. Additionally, if you are working with a fundraising shop to do just that, you'll also very likely be afforded certain
benefits during your lifetime. So, you know, many organizations, if you say, I'm going to leave my alma mater $15,000 in my estate, and you let them know and you provide them that documentation, you may be afforded some sort of recognition, whether that's on a donor wall or maybe you name a scholarship, or at larger amounts, you can name a particular facility or a room or something like that. And so when you go through that more formal process, there may be some advantages
of enjoying the benefit of your future gift. If you work with that institution. I won't say downside, but the other piece of that is you are very likely, unless you're an attorney yourself and you're doing all of your estate planning yourself, you will likely have to go to an attorney to get an official will or trust document created and filed and make sure that it comports with all the state laws, just to be on the safe side. Yes,
yes. That's really good information. And, you know, honestly, like, when I was walking the halls of the university and stuff, or when I get, like, the updates, I'm like, oh, I would love to have a grant in my name, or, you know, my name on the wall with a plaque so all the students can walk past my name, too. You know, it's like legacy that you leave, and I feel like that's really important. You know, maybe not for everybody, but for some people, I feel
like legacy is important. Yeah. And, you know, one of the things that we talk about, you know, if you're in the development space for a nonprofit, particularly universities or community foundations, things of that nature, we talk often about, maybe it doesn't make sense. You give it all away, either current use or in a deferred gift capacity. But maybe you create a vehicle where your children or your grandchildren can take over that responsibility of being sort of a
family philanthropist. And very popular these days are donor advice funds. These are funds that you and I could go out and establish today. Typically, they're very low minimums for some entities. So, for example, fidelity, which is one of the largest in the country, you can create a donor advise fund online, probably in about seven to ten minutes. And, you know, you put $100 in there, and you could budget into your monthly bills. You know, I want
to put x number of dollars in this donor advise fund. And then every year, or maybe not every year, you can choose when you can send gifts from that donor advise fund to your
organization of choice. And oftentimes, if you forecast 30, 40 years down the road in your life and say, well, I've got quite a bit of money in this account, instead of saying, well, I want it all to go away as soon as I pass away, I want to go to my alma mater, you could say, well, in fact, I would actually prefer my children or my grandchildren to,
to learn the value of philanthropy. You teach them throughout their life, and then they take over the responsibility of issuing grants from that donor advise fund, which is very popular. It's, you know, for anyone who's familiar with family foundations, this is very similar construct, except for it's a lot easier to establish a lot less burden in terms of annual reporting and requirements with the IR's and that kind of thing. Awesome. Awesome.
Okay, so let's recap these options. Cause I know we covered a lot. So we have adding as a beneficiary, so you can add the organization as a beneficiary. You could do it yourself online generally. Then we have just giving a gift. So, you know, credit card, debit card, check, cash, whatever that looks like. That's what people are most familiar with. We have the donor advice funds that we just talked about where you can open an account and then make gifts from that account.
And what am I missing? I feel like I'm missing something. So I don't know if we talked about it yet, but I would just add one more in there, which is advantageous to most folks if you've started to build a stock portfolio or a mutual fund or any sort of brokerage account or IRA, even if you are not old enough to be in your retirement years, if you have a brokerage account and you have stock and it appreciates in value, instead of selling that
stock and incurring a tax liability where you're going to have to pay capital gains on it, and depending on how much you make from your primary job, that could be a significant amount. You can also transfer those shares of stock directly to your nonprofit. Nonprofits.
Again, they make this process pretty easy, but you save immediate, save on the capital gains tax and you get gift credits and, you know, and, you know, most importantly, you're supporting, you know, whichever institution that you care most about. That's awesome. That's awesome. So you can just gift stock and they'll, you know, use it however they see fit. That's right. Awesome. Or how you. You could. You can be very specific, too. You could say, hey, I've got
$50,000 in Apple stock. And, you know, if I cash in on it right now, you know, I'm going to have a big tax liability. But maybe you, you consider giving that away to university. You could talk with their development team. You could say, I'm interested in learning more about endowing a scholarship or establishing a scholarship. And their team will most certainly work with you on that. Gotcha. Gotcha. Okay, so we have that. And then the other thing I forgot was trust. You can put it in a trust
in order to gift that. So thank you so much, Dean. This is a ton of information. I'm even like, oh, I gotta listen to this again. But if people were interested in learning more about you or philanthropic giving or anything of that sort, how could they find you? So I would definitely encourage I am all over LinkedIn often sharing some great tidbits from all the big financial institutions about philanthropy. So I would encourage looking me up online. So it's Dean Castaldo on
LinkedIn. You can't miss me. I work both at the Naval Academy foundation but also in the navy and fellow UNCG alum, so that's probably the easiest way to find me. If you'd reach out, connect with me, send me a note, and I'd be happy to connect by phone or email. Awesome. Awesome. Well, thank you so much, Dean, and I'll make sure I have all of that information in the show notes for you so you can just click on the little link and go to Dean's page. So thank you so much for coming on the show
and talking about this with us. I know for sure I have never talked about all of these options, so I appreciate the conversation and I'm sure the audience has taken something away from this. So like I said, I appreciate you and I hope you have a wonderful rest of your day. Thanks. Take care. Bye. Thank you for listening, joining and being a part of the Money Talk with TIFF
podcast this week. You can check Tiff out every Thursday for a new Money talk podcast, but if you just can't wait until next week, you can listen to previous podcast [email protected] or follow TIFF on all social media platforms at moneytalkwitht. Until next time, spend wise by spending less than you make a word to the money wise is always sufficient.