I’ve written before about “Accidental Philanthropists” who can choose to leave less of their hard-earned money to the tax department and more of their legacy to their families and the charities they care about.

This article introduces you to five different types of generous givers I’ve met over the years and provides a 10-step guide to help them become an intentional philanthropist, even if they started out as an accidental one. Let’s meet the giver types first.

Giver #1: Keep me anonymous

Some givers want to keep their donations private. Maybe that’s because they don’t want to publicize the fact that they have wealth. They may also believe that staying anonymous keeps their gift pure since it’s made for no other reason than generosity.

Giver #2: I’m setting an example

Givers may be primarily motivated by encouraging others. They may want to instill the values of philanthropy in the next generation. Or they may want to rally people in their community to change lives for the better together.

Giver #3: I want my name to live on

These are the givers who provide large donations that allow them to add their names to hospital wings, university buildings and prestigious awards. They understand that public philanthropy provides a kind of immortality.

Giver #4: I want to reduce my taxes

Giving to charity, especially when done strategically, can be an excellent tax minimization strategy. Donations can be integrated with other corporate and personal tax planning to provide the greatest possible relief from taxes.

Giver #5: It’s great for business

Now, more than ever, business owners know that customers prefer to deal with companies that are good corporate citizens. Demonstrating a commitment to a charitable giving program can give a boost to your brand and your business.

Give more with a strategic approach to philanthropy

We have worked with so many clients who were surprised by how much more of a difference they could make with some simple restructuring of their assets. By minimizing taxes, they freed up money and could leave substantially larger sums both to their families and to the causes they support. Young clients in their 20s and 30s have created donations of a million dollars or more for pennies on the dollar using Life Insurance along with appropriate planning.

The following steps are geared towards business owners, but many work well for individuals too. And, whichever type of giver you are, this kind of strategic approach to philanthropy can help you give more than expected and transition from success to significance.

Step 1: Define your “Why”

What are you passionate about? Do you want to lift people out of poverty? Help children reach their full potential? Accelerate research into a specific disease? Protect the environment? Support animal rights? Decide what resonates with you and where you want to have a meaningful impact.

Step 2: Dream BIG

If you had the means, what audacious sum of money would you like to donate to charity? For example, think about the difference you could make to your favourite causes with a $100 million donation. Shoot for the stars and we can end up on the moon. It all starts with having a philanthropic financial goal.

Step 3: Make it real

Start making it happen by committing to allocate a certain percentage of net or gross revenues or annual profits to charity. Aim as high as you can and promote the fact that the more your business earns, the more you’ll donate.

Step 4: Put structures in place

Establish a charitable foundation or Donor Advised Fund (DAF) to manage your charitable gifts. A charitable foundation is a standalone structure that has initial set-up costs and annual reporting. You invest the funds. A donor-advised fund is an account within a public charity E.g. Toronto Foundation, Jewish Foundation, Oakville Foundation, Burlington Foundation, Canada Gives, and is much simpler to set up. You can use either for your business and/or personally.

Step 5: Gift assets strategically

Consider whether it makes the most sense to donate cash or to be more strategic and give appreciated securities, flow-through shares, and life insurance. It can be the difference between donating at .50 cents per dollar to as a low as .05 cents per dollar. As a business owner, re-examine your estate plan to see if there are ways you can convert taxes into a charitable legacy after death. One of the best ways is to donate an old life insurance policy that you don’t really need or that would not move the dial on your family’s inheritance. It can generate a large tax receipt today and going forward premiums are considered charitable donations to save you more taxes.

Next week: Part 2. Steps 6-10 of Becoming an Entrepreneurial Philanthropist.

Mark Halpern, CEO at WEALTHinsurance.com is a well-known CFP, TEP, MFA-P (Certified Financial Planner, Trust & Estate Practitioner, Master Financial Advisor Philanthropy) Mark@wealthinsurance.com