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The Inside Story

Second Quarter Meeting
The Second Quarter of 2005 meeting will include a thorough review of all of the insurances you carry and possibly suggestions for some you don’t. Please bring the most recent statements from all policies including home owners, vehicle, health, disability, long term care and any others. We will also review and discuss the need for Long Term Care Insurance, concerns about deductible amounts and using insurance for catastrophic benefits. Please also bring your 2004 tax return.

Vacation
Sylvia will be in Colorado from May 11 to 18 and in the northeast from June 29 to July 10. Bill will be in the office and will have regular contact with Sylvia so feel free to call or email Financial Freedom Associates as usual.

New ADV II forms will be available this month. If you would like a copy please contact us.

How are you doing on your “List of 50 Things to do before you die?”
I don’t know if it is spring or what has gotten in to me but I am really in to cleaning out and organizing. It is amazing how refreshing it feels and what a sense of accomplishment with each little action. If it seems overwhelming—you might want to check out: www.flylady.com It has some fun ideas. Happy Springtime!
-Sylvia

Charitable Giving

Written by Bill Holliday

Many of us have been moved by the tsunami in southern Asia to give outside of our planned annual donations. The following are some guidelines to help make sure your money is put to the best use possible.

Don’t give to whoever asks first – telemarketers are one of the least effective forms of fund raising, costing more than half of the money they raise. We recommend having a giving plan for the year (like 10% of your income or a certain amount to specific organizations).

Don’t just follow the headlines – sometimes we give to groups that have more money than they can effectively spend. While $5 billion has been pledged by governments to tsunami relief – half of that amount could help doctors gain control over malaria epidemics that kill more than 2 million people annually (according to Columbia University economist Jeffery Sachs).

Do research - GuideStar (www.guidestar.com) and Wise Giving Alliance (www.give.org) are just two sites that allow you to search charities by cause. The Institute of Philanthropy (www.charitywatch.org) and Charity Navigator (www.charitynavigator.org) rate charities on how well they spend donations. They also will give you a description of the charity and its work.

Get receipts - Make sure that the charities are recognized by the Internal Revenue Service (IRS). The IRS requires receipts for gifts worth $250 or more. A canceled check is not sufficient documentation. If you donate personal possessions instead of cash (clothes or furniture, for example) you can take a deduction for the property's fair market value, the price at which property would change hands between a willing buyer and seller. For donations of cars, boats and planes, the donor’s deduction is limited to the gross proceeds from the sale by the charities.

Donate stock that's appreciated in value - This is a win-win move. Donate stock and you won't have to pay capital gains taxes on the profits, and the full value of the stock can be deducted as a charitable donation.

Document your donations for tickets to charitable events - When you buy a ticket to a charitable event, the entire price of the ticket is not deductible. For example, if you buy a $100 ticket to a charitable event and receive a $25 meal in return, the charity must give you a statement noting that the deductible portion of the gift is $75.

Consider charitable remainder trusts - Generally, a charitable remainder trust makes annual payments to non-charitable beneficiaries for life, joint lives, or a term of years and then pays the remainder to charity. Because these transfers are irrevocable, a charitable deduction is allowed in the year of transfer. Appreciated stock as well as cash can be used to fund the trust.

Consider community investing - Community investing is financing that creates resources and opportunities for economically disadvantaged people in the U.S. and overseas who are underserved by traditional financial institutions.

When you open an account with a Community Investing Institution, your money goes towards strengthening community development. Community Investing Institutions use your deposits and investments to provide financing to communities that are overlooked by traditional lenders, creating resources and opportunities for people who need them most. Loans go towards:

Affordable housing – loans for construction of rehabilitation of housing for low-income families.

Micro-enterprise development – small loans to assist low-income people in starting their own companies.

Small business development – larger loans to low income people in disadvantaged communities to start or increase their business.

Community development – supports non-profits and cooperatives that work in disadvantaged communities.

There are several methods of investing in Community Investing Institutions, including: direct investment, community investment portfolios, mutual funds, and CDs.

Loan funds typically accept investments at rates of 0-3 % for 1-10 years. Community loan funds generally operate in specific geographic areas, with minimums as low as $2000.

A Way to Think About Community Investments

When you make a $20 donation	When you invest $1,000 in a community investment at 3%:
You give $20	You may sacrifice $20 in interest (compared to a T-Bill investment of 5%)
And only that $20 goes to work helping people.	While your entire $1,000 goes to work helping people help themselves!

Useful web-sites:
Social Invest - www.socialinvest.org
Calvert Foundation - www.calvertfoundation.org
Microcredit Summit - www.microcreditsummit.org
Co-op America - www.coopamerica.org
Social Funds - www.socialfunds.com