Reclaiming the Term Charitable Choice: A Matter of Individual Responsibility and Planned Giving

You can hardly glance at a newspaper these days without stumbling across this over-used catch phrase. Presidential candidates are tripping over themselves to promote this notion of Charitable Choice; a notion that seems to build on two basic principles.

The first principle appears to be a refreshing realization that perhaps government programs are not the best way to meet the social, spiritual, and financial needs of the neighbor next door. In fact, needs are better met at a more local level. For example, maybe I could address that need, or maybe the local church could meet the specific needs of this individual who has a unique set of circumstances, unique needs·not all of which are solved by a financial infusion. This line of thinking should be lauded and each of us should be cultivating this encouraging trend toward private charity.

The second principle is more disturbing and that is that government is the most efficient distribution mechanism that we have available to ensure that our hard earned dollars get in the hands of those non-profit organizations "of choice" located in our neighborhood. Alarmingly only a small fraction of every tax dollar we pay ends up in the hands of those organization that actually address the needs of people that we need to help. From purely a practical perspective, this mechanism of government acting as a clearinghouse for charitable choice doesnât seem sustainable as an argument; at least an argument based upon historical data.

If these practical considerations resonate with you, you may also relate to the moral ramifications surrounding the issue of Charitable Choice. Those who value individual responsibility view the government's unnecessary distribution of their financial resources as an abdication of their moral responsibility to be a good steward of their assets. Likewise, those who value the role of limited government see Charitable Choice as relinquishing our God-given personal and economic liberty by allowing government to expand their influence over charitable organizations. Notwithstanding the practical arguments for and against Charitable Choice (as a potential political concept), consider for a moment concrete ways that we can responsibly exercise the charitable choice that is currently available to us all·often times with significant tax benefit.

First of all, we need to continually remind ourselves that giving money for various worthy causes is simply one of many ways that we can exercise good stewardship of the resources entrusted to us. Using our money to invest in businesses which exist to serve the needs of society and provide employment opportunities for those in our community is yet another way of practicing stewardship of our financial resources.

Of course, investing our time and energy into the lives of people is arguably the most productive charitable activity in which we all can engage everyday. You may be interested to note, however, that making financial donations is also something in which we all engage. That is to say, everyone with is currently a financial donor. Furthermore, each has already determined their charity(s) of choice; either by default or design.

Many of us currently give to churches, charities, and other worthy causes on a regular basis. Additionally, all of us will transfer the assets of our estate either during our lifetime or upon our death. Those who have planned this ultimate transfer of wealth will leave, at least in part, their estates to those whom they have chosen. Those who have not planned this ultimate transfer of wealth will leave their estate to the government; mostly for the government to keep (up to 55% estate taxes) but partially acting as a broker for how to distribute the assets (probate).

As much time as we all spend trying to avoid paying the government any more than they are due, planning our ultimate transfer of wealth often doesn't get the equivalent amount of time and attention. Each year millions of dollars are forefeited in estate taxes alone. What's more, with thoughtful planning, not one dollar need be paid in estate taxes because estate taxes are entirely optional.

Without proper estate and gift planning, we unintentionally violate the principles that we value; that of individual responsibility and limited government. With proper planning, true charitable choice can be exercised to:

1. Ensure that our hard earned dollars get in the hands of those we deem worthy. 2. Ensure that our hard earned dollars do not get in the hands of those who violate our value system. 3. Ensure that we leave our financial legacy is distributed according to your desires as opposed to leaving that decision for the government to decide. 4. Leverage our desired contribution to worthy charitable organizations.

5. Avoid abdicating to government our moral responsibility of being good stewards of that which we are entrusted. 6. Avoid the inefficient distribution of our hard earned dollars toward inefficient government social programs.

Charitable choice is certainly a vehicle we all desire to exercise. Each of us invests our lives and our resources into those things that we deem most worthy. Proper estate planning is a significant component toward fulfilling prudent charitable choice both during and beyond our lifetime.

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