Secure Your Legacy with Expert Wealth Management and Philanthropic Giving Strategies

Philanthropy is the act of giving back to improve our local community and the lives of others. In Hawaii, 93% of households participate in some form of giving, with nearly two-thirds donating money. Whether that means caring for our keiki and kupuna through social causes; protecting the environment and our fragile ecosystem; or supporting the arts, sciences, and other initiatives; philanthropic giving has a transformative and long-lasting impact.

Although altruistic giving to our community can be its own reward, there are also many financial benefits to philanthropic giving in the form of setting up a private foundation or charitable trust. While there are some important considerations to keep in mind when managing charitable foundations, such as governance of the organization, ensuring legal compliance, and making smart investments, the resources you have access to as a client of The Private Bank are able to simplify the process.

Why structured philanthropy matters

Charitable giving vehicles, such as foundations and trusts, allow people to integrate giving with wealth management strategies that can enhance their impact. A charitable foundation offers many advantages. For example, charitable foundations only pay taxes on 2% of their net investment income, and also offer tax benefits such as deductions for charitable contributions.

Charitable foundations allow for streamlined giving, which makes it easier for you, or other donors, to donate. This can increase the amount of money that the organization receives and make tracking and internal record-keeping easier. Structured philanthropy also helps you build and leave a lasting legacy by allowing your family, friends, donors, and others involved in your organization to continue giving for many years into the future. Your unique foundation can support causes that matter to you, especially if you align your charitable efforts with personal values and your long-term financial goals.

Additionally, as we approach the end of 2024, end-of-year giving, can maximize tax benefits by reducing your taxable income. (If your charitable donation is more than your typical standard deduction, the entire amount can be claimed as an itemized deduction on the year’s tax return.) Pre-planning donations now and a dedicated foundation can allow for a structured giving approach that increases your impact while reducing your tax burden. Bank of Hawaii’s services can assist with your end-of-year giving for an organized and efficient start to the new year.

Bank of Hawaii simplifies charitable giving

For more than 100 years, Bank of Hawaii’s Charitable Foundation Services Group has helped individuals and corporations manage and direct their giving through private foundations and charitable trusts. As the only trust division in Hawaii, Bank of Hawaii is responsible for overseeing $1 billion in charitable assets and approximately 130 grant-making foundations.

Working with Bank of Hawaii will give you an expert team that includes a client service officer, grants administrator, and a client service associate. Although different charitable organizations may require different types of assistance, Bank of Hawaii’s Charitable Foundation Services Group can help your foundation with financial planning, grants administration, proposal review, and budget preparation as well as organizational logistics, such as meeting coordination and ongoing support, as well as:

• Safekeeping of your foundation’s investments, which includes income collection, security processing, and trade settlement;
• Complete investment management, along with asset allocation and selecting appropriate investments and asset managers;
• Preparing and maintaining your foundation’s fiscal recordkeeping as well as transaction statements and preparing year-end records for independent auditors and tax preparers;
• Verifying and paying foundation bills and expenses;
• Reviewing your foundation’s administrative and investment plans to ensure accuracy and legal compliance as well as monitoring distributions to verify that grants meet tax rules and IRS requirements;
• Offering a daily review of transaction reports for accuracy of distributions, payments of expenses, and sale of assets; 
• and more.

Create your lasting impact in Hawaii

As you navigate your philanthropic journey, let Bank of Hawaii serve as your trusted partner and advisor. Our expert team is experienced in helping our clients make informed decisions and strategic contributions that are aligned with their values and financial goals. We understand the unique needs of our local community and can offer personalized guidance on ways to make the most of your gift in the Islands.

This was the case for a recent client with Bank of Hawaii, when a longtime local philanthropist decided to create a charitable foundation but was unsure of how to approach the logistics. Moreover, as a former business owner (who was enjoying retirement as a frequent traveler), this philanthropist didn’t want to become mired in paperwork and the daily diligence of running an organization.

Our Charitable Foundation Services Group was able to provide administration and staffing for this philanthropist’s foundation as well as arrange meetings, prepare agendas and minutes, handle grantmaking correspondence, review proposals, prepare the budget, and respond to foundation inquiries—helping this philanthropist manage his foundation and protect his assets without creating a burden on his time or energy.

Philanthropy is manageable with the right partner. Bank of Hawaii can provide you with the expertise and necessary support for a successful strategy of philanthropy that works for you.

Carol Tom is Vice President, Institutional Services admin manager and team leader for the Charitable Foundation Services group. Before she joined Bank of Hawaii, Carol did tax consulting work for Pricewaterhouse Coopers and other large accounting firms in Honolulu. She received her bachelor's degree in Speech Communications from the University of Washington. She then went on to obtain her Master of Business Administration and Doctor of Jurisprudence degrees from Willamette University. Tom is licensed to practice law before all Hawaii courts and the United States District Court for the District of Hawaii. She is also a graduate of National Trust School.

To learn more about structured philanthropy, end-of-year giving, and to explore your options for starting or managing a charitable foundation, please consult your Relationship Manager at Bank of Hawaii’s Private Bank.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax or investment advice. You should consult your own tax or accounting advisors before engaging in any transaction.