How to Use Your Portfolio to Amplify Your Charitable Impact
As the year draws to a close, it ushers in a period of reflection and an opportunity to contemplate charitable gifting, a practice that has inspired the term “Giving Season.” This time of year encourages individuals and organizations to consider how they can make a meaningful impact through philanthropy. One powerful way to enhance this impact is by aligning charitable goals with investments.
Here are a few examples of how this can be achieved:
Education
For those who donate to their alma mater or other educational causes, there are investment opportunities that can complement these charitable efforts. Consider investing in market-rate bonds that finance student loans and educational facilities. With nearly 30-40% of all undergraduate students taking out loans, student loan debt has become the third-largest consumer debt category. Banks finance these loans and subsequently sell them into the bond market, allowing for continued loan origination.
Additionally, schools often access the bond market to fund capital improvements. These bonds are typically issued through local nonprofits and public agencies. In states that offer tax advantages for purchasing local municipal bonds, investors can support educational institutions while potentially benefiting from tax incentives.
Environment
For those whose charitable giving to environmental causes has increased, investing in public companies that support similar initiatives can be a strategic move. The energy transition presents an attractive opportunity for growth within equity portfolios. Although these investments can be volatile, they represent durable, intergenerational megatrends expected to unfold over an extended time horizon.
A Season to Reflect
To make the most of charitable intentions, adopting a planned approach can be incredibly rewarding. Instead of a year-end rush or spontaneous donations, transitioning to a well-thought-out plan that aligns…
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