From Success to Significance

Life’s big milestones cover a lot of ground. Some are deeply personal, such as welcoming a grandchild, retiring after a long career, or celebrating a significant birthday. Other milestones are financial: selling a business, receiving an inheritance, exercising stock options, selling a valuable piece of real estate, or realizing a financial gain following an initial public offering involving stock you’ve owned for years.

Whether financial or personal, major milestone moments often bring a sense of accomplishment. They can also bring something else: an opportunity to pause and reflect and to be smart about the next big move. For many people, that is when the questions start changing. At some point along the way, instead of asking themselves, “What’s my next big thing?” they shift to “What matters most?” and “What kind of impact do I want to leave behind?” That is one reason so many charitable conversations begin after a significant financial event, which is why significant financial events often lead to high-profile philanthropy announcements, as recently occurred in connection with the sale of the Seattle Seahawks.

Many people in this situation find they have the time and flexibility to think more intentionally about the causes, organizations, and communities that have shaped their lives, especially now that they have the financial resources to act on their intentions. Some want to express gratitude for opportunities they’ve received. Others hope to create opportunities for future generations or honor family members. Still others simply want to make sure the success they’ve enjoyed continues benefiting others for years to come.

As you look ahead in your life and anticipate big milestones, consider taking steps early so that you are prepared to implement a philanthropy plan. For example, here are a few things you can do even years before a significant liquidity event:

• Consider establishing a donor advised fund at the East Tennessee Foundation so you can get familiar with the mechanics and the resources available at the East Tennessee Foundation. You will be able to set aside charitable dollars while taking the time to thoughtfully consider which organizations you would like to support over the months and years ahead, especially following a financial transaction.
• In addition to your donor advised fund, you might also want to establish one or more designated funds to provide lasting support for the specific organizations you care about. These funds can provide support during your lifetime or receive an estate gift under your will or trust.
• Some people also establish a field-of-interest fund at the East Tennessee Foundation as part of their charitable giving “portfolio” to address particular community needs, as well as unrestricted funds that allow the East Tennessee Foundation to respond to the area’s greatest opportunities for generations to come.

Remember, in the case of private business interests, from a capital gains perspective, you may be far better off establishing charitable arrangements well before a transaction is underway. Please consult your tax advisors and the East Tennessee Foundation team as you think about an exit plan for your closely held business. Of course, if you have recently experienced a liquidity event and have not yet established a charitable plan, it is not too late.

Whether you have already experienced a significant financial event or expect one in the future, the East Tennessee Foundation can help you explore charitable options that reflect your values, support the causes you care about, and create a legacy that extends far beyond a single moment of success.

This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.