Charitable Giving

Today, we're gonna be discussing charitable giving. Hello, welcome to Money Talks. My name is Zach Bachner from Summit Financial Consulting down here in Southeastern Michigan. Whether you want more information about our show or learn more about our company as a whole, visit our website at summitfc.net or give us a call 586-226-2100. Whether you find us on Apple Podcasts, Spotify, Amazon Music, make sure to give us a follow and subscribe to stay up to date on any of our future shows. Now, before I jump in, let me introduce my co-host, Tony Shore. All right.

Zach Bachner. The Zach Bachner. I love it. You've got a perfect name for radio show hosting and podcast hosting. Ladies and gentlemen, Zach Bachner. I love that. Yeah, the alliteration is great. I feel honored just to be here with the Zach Bachner today. I think our listeners and viewers may be surprised when they watch the video. If they can see the video, where's Ken? They might say, where's Ken? But we have a pleasant surprise, and we have Zach today. Zach, I'm excited about today's show because this is based on a blog, an article that you wrote, and I can't wait to dig into it. But first, Ken's not here. He'll be back probably next week or the following week. The guy is busy, but you've been busy too, haven't you?

Yeah. Yeah. So I'm the certified financial planner, the CFP of the office. So I do all of the planning, the analysis for the firm. I also handle all of my own clients as well. So especially with all of the, you know, interesting projects. geopolitical issues of volatility that we have going on lately. It's been quite interesting to say the least working with our clients, making sure people are not stressing too much about things. And then of course, you know, we're still growing. We've got a lot of clients coming in. So my workload is always, always pretty full.

Yeah, you always keep busy. And I know you love it, though. This is what you love to do. You love meeting with people. And as a certified financial planner, a CFP, you really love helping people with their finances, with their retirement income planning, their investments. So that's huge. I love that. But, you know, there at Summit Financial Consulting, you guys really focus on the community. And I've always been impressed. I've told Ken this before about how you love to give back to the community. You guys are always giving back. You're always doing something. You encourage your clients and the people you work with to give back. And that's really what we're talking about today, right?

Yeah. Yeah. We've noticed that, you know, obviously when we give back, whether it's, you know, financially, we donate to charities, everyone here at the firm really makes that effort to give 10% of their, their income, you know, that full tithe. Um, and whether it's that or just donating time, volunteering, uh, we're all trying to make an impact in our local communities. And we see that with clients that can definitely be like a mental hurdle. They try to overcome because, um, Mathematically, giving isn't the best thing for your retirement plan or your financial plan. But we definitely believe there are more causes out there than just trying to better your life, making sure that those around you are getting bettered as well. And that's kind of a big focus that we have here. So we will definitely want to dive into specifically about that here in a little bit. But before we get too deep into that, Tony, there are a couple quick tax updates I wanted to share, make sure we get these points across because 2026, there are a couple of changes to how donations and giving might be portrayed on your income tax return.

Sure. Well, you know, people think, oh, taxes, we have to talk about taxes again. But hey, who doesn't love a good tax benefit, right?

Yeah, this is this is the good side of taxes. OK, good, good. So there's like three main things that we wanted to cover. The first is starting in 2026. Even if you don't itemize, you should be able to claim at least a little bit of that donation. The first one thousand dollars for single or two thousand dollars for a married couple is Those can be deducted right away. Even if you take the standard deduction, you can still claim those lower limits for your taxes. In the past, that was not available. You had to itemize. But now, even if you do a little bit and you take the standard deduction, you can still benefit financially from that initial amount of giving.

Well, that's huge. And so that's that's brand new this year, though. That's a brand new change, right? Correct. Yeah. That came out with Trump's big, beautiful bill that they passed last year of updating, revising some of the tax code. Yeah, they really increased the standard deduction across the board and especially for married couples. But and those over 65. Right. I mean, the standard deduction now is is is pretty big. Right.

Yeah. And especially for a lot of retirees who maybe don't have a mortgage, they don't get that mortgage interest. You know, they're not working as much. They don't pay as much as state taxes. You know, it can be hard to kind of hit that standard deduction in some cases. So most people end up don't itemize. So this is a way for, you know, to motivate or incentivize those to give, even if they weren't previously getting that tax break. Now they can get a little bit of that financial benefit from their giving.

Yeah. Yeah. Well, that's huge. Now, it's probably bad news for people who want to itemize, right? That is true.

Because they're kind of giving that out up front to everybody, there is now a floor or I call like a little hurdle rate that in order to itemize your deductions or your donations need to be above 0.5% of your adjusted gross income. So everything before that level is no longer able to be claimed. So you then need to do a little bit of math, a little bit of accounting, make sure that you're giving more than this amount, 0.5% of your adjusted gross income. And then that is what would work towards your itemized deduction limit.

Yeah. But when it comes to giving, like people who donate time, money, resources, mainly money, of course, in the past, in years, you know, years past, you used to itemize and then you thought, OK, I can get a tax break if I donate. You know, it's not dollar for dollar, but you get some type of itemized deduction. Yeah. I look, though, at this and then the standard deduction came along and they really raised that quite a bit here in the last few years, especially since the one big beautiful bill. And a lot of charities, when they first raised the standard deduction, people stopped itemizing, basically, because the standard deduction was so high. So they didn't bother itemizing. And charities, some of them felt like they were taking a hit because of that. People weren't giving as much because they couldn't itemize it. However, I think that's why they did the first $1,000 or $2,000, I think, for married couples. Now you can deduct donations, at least some, up to $2,000 for a married couple, plus the standard, even if you take the standard deduction. So that's good, right? I mean, it's mainly all good news for charitable giving, isn't it? Yeah.

Yeah. Overall, we think their goal was to try to motivate those to donate or give, you know, to start. Those who are still already giving should hopefully continue to give. But I think that initial 1,000, 2,000, you know, just blanket deduction, that was a way to try to motivate those who are not currently giving to try to give and donate out of their own pocket. Because like you said, if you can, if it only costs you 75 cents on the dollar of what you're donating, you know, it's more likely that people are going to be willing to extend that handout.

Because you are getting a tax break and, you know, it shouldn't be about the tax break to give. First of all, we're not saying that, but it is incentive. And I think this is a great update. Hopefully these tax benefits can motivate our listeners out there to donate to great causes, right? I mean, whether it's your church or, charities. There are so many things and people in need, you know, as costs have risen with housing costs and food costs, things like that. And if gas stays above a hundred dollars a barrel, things are going to keep going up exponentially. Right.

Yeah. And that's the main reason why we wanted to do this show and why I wrote the blog. And the first point was, you know, just to try to motivate those who are listening or those who are reading to participate and start giving if they aren't already. Because as Christians here at the firm, like I said, we all strive for that 10% tithe. We've all seen benefits of God working in our lives, whether you believe in God or karma or whatever you believe in. Doing good tends to lead towards more good back in your life. So we don't think, you know, if you, start to give, there's no way you're going to end up regretting it. And that was kind of the point of this, you know, us meeting here today was trying to motivate those to take that first step towards that route.

Yeah. And I know it's, you know, it's part, you want to help others and it's also part of your faith and belief system as it is for me. I mean, you know, for Christians out there, if you consider yourself a Christian as I do and you, you get a red-letter edition of the Bible. In other words, in the New Testament, every word that Christ spoke, when he's quoted, it's in red. And if you get a red-letter edition of the Bible and just read the red letters, what Christ actually says, I think over 85% of it is about giving to the poor and giving to others and giving and being charitable. And that's a strong... Statement to help. That is, if you, you know, I don't know how you can call yourself a Christian and not give and be givers. It just, you will feel better. And no matter what your belief system is, it doesn't matter as far as this is concerned. Charitable giving is always going to, you'll be surprised at how much better you do and you feel. You know, the more you give, the better, right? Yeah.

Yeah. And that's, you know, that does lead me to a point. I wanted to share this verse real quick from Malachi 3.10 that says, So that was kind of one verse that I included in that blog because that does kind of highlight that, you know, what if you are, if you're out there giving, if you're out there spending your time doing good, you will receive good back one way or another in your life. And that was something that my wife and I kind of struggled with a little bit too, um, was when we got married and we wanted to go down this tithing path was, um, I'm a very big numbers guy, right? So I saw, well, if I give this money instead of investing it for retirement, how is this going to impact me 30 years down the road? Um, so it was like to be a cheerful giver was really a struggle, uh, for me personally, until we started giving and starting to see some of those benefits come back to us. Um, since then, you know, we've been fully blessed in our personal life and in our careers. So, um, The way that I explain it to people is I try to use the whole investing philosophy of compounding interest. If you invest today, your money grows, it's gonna compound on itself and exponentially grow for the future. People buy stocks, those companies invest the money, they exponentially grow. The way that I see giving is like a compound impact or like a compound giving. Just the same way you would invest in a company, you can invest in a charity or invest in your local church. The sooner you give them the money, the sooner they can put it to work, the more good, the greater good that they can do over a longer period of time. And when I took that compound interest thought process and converted it to that compound impact or compound giving, that's when we were fully on board. Really had no hesitations about giving and helping those in our community, helping those in our church. Yeah.

Yeah, I think that's great. And I know you pointed out in your blog, giving sooner rather than later is a motivation, right?

Yeah, because it's tough. Like I said, you know, I can invest this money and grow for myself in the future. So, for example, you know, you take a thousand dollars, you invest that for 10 years, you earn 10 percent. Yeah. In the future, you should have about $2,600 or so. So like there's definitely potential there, but what can that money do elsewhere if you were to donate it or give it? The way, the example that I use in the blog was, you know, it costs a thousand dollars to help someone who's homeless, you know, get their life back on track, you know, find a cheap place to rent, maybe start working on an interview, get a job. So like we just kind of use that as like our blanket threshold. So like, Yes, you could invest the money, get 2,600. You can help two and a half people in the future if you wanted to down the road. But what happens if you give that $1,000 to someone today who can turn their life around? Like I said, they get a job, they start earning more, they've been helped directly from your giving. So we think they're probably more likely to give themselves in the future. What happens if that individual then gets their feet under them, they get married, they start a family, they encourage their offspring, their children to be generous as well. Their friends and family around them see the impact that their lives had had from giving. Yep. And it all happened because you started sooner rather than waiting those 10 plus years for the money to grow for yourself or for you to then decide down the road that you wanted to give the funds.

Yeah. Well, that definitely makes sense. I mean, you could save or invest your money to grow for the future, but you could also donate your money and have a larger impact in the future as well. Yep.

Yeah. One of the reasons that I first thought about this was our church spends a good amount of time. One of the lead pastors would go overseas throughout the world, planting, starting new churches. And they took a small portion of the money the church receives and then puts it towards that effort. So the same kind of thing was like, if I give money today that plants a church somewhere, Those people learn about Christ. They can then help others and disciple to others. So it kind of creates like that ripple effect. So, you know, it might just be a small splash today, but that small splash can turn into a pretty big wave in the future. Yeah.

Yeah. And I think there's a school of thought out there. And I've heard a well-known radio show host say, hey, save a lot now. Do a lot for yourself now so later you can give like no one else. Live like no one else now so you can give like no one else later. And I know Ken says we say give like no one else, give like no one else now. So later they could live like no one else. Right. I think that's that's really good.

Yeah. And it's the same kind of thing. It's a little bit of a play on words. There are twists of words a little bit because we think giving is just that important. both your life and the people that you're helping, your life should be changed for the future. So it's one way that we try to help, like I said, convince those around us to start that path sooner rather than later.

And for people out there who say, look, I have bills and things. I don't have a lot of extra to give. There's always something to give. It's just like people say as the CFP, you see this all the time. People who think they don't have money to save for retirement, you do. It's just a matter of prioritizing, right? Yeah.

Yeah, everything goes back to that B word, right? It all goes back to budgeting. Yeah, there's things that can be cut out. There's expenses that could be minimized to try to free up cash flow for charity, for retirement savings. There's ways to find the funds to achieve those goals. And if you really are that tight and there's nothing that you can do to cut back, you should have some time, you know, an hour here, a couple hours there. We think time is very valuable as well. Donate your time, if not your money, right? Yeah, exactly.

And you were saying, I'm sorry, I didn't mean to interrupt it, volunteering, right? That's a way you can give your time. Yeah.

Yep. Yep. Um, and I, there is one thing that I did want to specify here to Tony is, um, Summit as a firm is that we've been partnered with the Gradient Gives Back Foundation for the last couple of years now, um, is the way that we internally have been helping those in our community outside of like our additional giving. Um, so we've been able to help five local families from giving, from us advisors, Gradient participated in the giving, our staff donated. We had clients who donated towards the cause as well. So over the last handful of years, there's a couple of families each year that we choose and select to receive these donations. We cover six months of their mortgage payments at least so they don't lose their home. Um, sometimes it's people in, like, abusive relationships. Sometimes it's people who are, you know, just down on their luck. They have medical issues that are consuming all of their time and their money. Um, so it's our way to, you know, help our clients and motivate those around us to give, and then we help those directly in our community. Um, because, like I said, you know, we, we don't think that donating is ever going to lead you astray and there's no way you can out give God. So it's been just absolutely amazing to kind of see this impact that we've had locally.

that's huge. Yeah. And I, I know that's a big focus and the, and the Summit Gives Back along with Gradient Gives Back. I mean, for a, for a family that's, um, you know, it's, it's not, it's not a handout. It's a hand up people who find themselves in a bad situation, uh, to help them get back on their feet is huge. Uh, I love that you do that. You, you really give back to the community in so many ways. That's important. It's important that we all do that and work together. Uh, If you see a brother or sister in need or somebody in need, a family friend or anyone, neighbor, anyone in need to help give back is great. And you gave us some financial tips and reasons. I mean, that added a thousand, two thousand dollars. Yeah. Now deduct, it's a tax benefit as well. Don't forget that aspect. And if you have questions about that, like, hey, we found ourselves in this tax situation, go to Summit Financial Consulting, pick up the phone, give Zach a call, give the team there a call. You don't charge for a consultation or to answer some questions. There's no charge or obligation. How can our listeners and viewers get a hold of you and the team there if they do have questions about this?

Yes, that's exactly right, Tony. So we don't, we don't charge for our advice. We don't charge for recommendations. Like you said, consultations. We believe, you know, all of our financial plans, just educating others is a big reason why I got into the industry. And it kind of goes back towards that giving, you know, if I just give someone some information or an education, I'm totally happy with that too. We can be contacted. Our website is summitfc.net. Our phone number is 586-226-2100. We have a team of six advisors now who are all more than happy to meet with you, answer any questions you might have, whether it's charitable giving, retirement, investments, or some of those tax benefits too. Everyone here is pretty knowledgeable and always willing to help those who are looking for it.

All right. Well, thanks so much, Zach. And again, listeners and viewers, go to summitfc.net. That's F as in Frank, C as in cat.net or a financial consulting summitfc.net. And you can also call 586-226- 2100. Great show today, Zach. Great to see you. It was fun hanging out. And what a great topic, charitable giving. And it's so important to give back to the community as you do. Listeners and viewers, thanks for hanging out with us today. That does it for today's episode of Money Talks with Summit Financial Consulting, LLC. Thank you for joining us for Money Talks. Don't head into retirement without a strategy that addresses both income and taxes. For more information, please contact Ken Wink at Summit Financial, working with people you trust. Call 586-226-2100 or visit SummitFC.net. Join us again soon for another episode of Money Talks.