How to Use Your Portfolio to Amplify Your Charitable Impact
As the year draws to a close, it ushers in a period of reflection and an opportunity to contemplate charitable gifting, a practice that has inspired the term “Giving Season.” This time of year encourages individuals and organizations to consider how they can make a meaningful impact through philanthropy. One powerful way to enhance this impact is by aligning charitable goals with investments.
Here are a few examples of how this can be achieved:
Education
For those who donate to their alma mater or other educational causes, there are investment opportunities that can complement these charitable efforts. Consider investing in market-rate bonds that finance student loans and educational facilities. With nearly 30-40% of all undergraduate students taking out loans, student loan debt has become the third-largest consumer debt category. Banks finance these loans and subsequently sell them into the bond market, allowing for continued loan origination.
Additionally, schools often access the bond market to fund capital improvements. These bonds are typically issued through local nonprofits and public agencies. In states that offer tax advantages for purchasing local municipal bonds, investors can support educational institutions while potentially benefiting from tax incentives.
Environment
For those whose charitable giving to environmental causes has increased, investing in public companies that support similar initiatives can be a strategic move. The energy transition presents an attractive opportunity for growth within equity portfolios. Although these investments can be volatile, they represent durable, intergenerational megatrends expected to unfold over an extended time horizon.
A Season to Reflect
To make the most of charitable intentions, adopting a planned approach can be incredibly rewarding. Instead of a year-end rush or spontaneous donations, transitioning to a well-thought-out plan that aligns with values and financial strategy can maximize impact. Asking key questions about motivations, timing, involvement and the best vehicles for giving can guide this process.
For those interested in exploring how their investments can support charitable goals, reaching out to a financial advisor or investment team, such as J.P. Morgan, can provide valuable insights and guidance. By leveraging sustainable investment strategies, individuals and organizations can enhance their charitable impact, making a difference in the causes they care about while pursuing financial growth.
In conclusion, the “Giving Season” is not only a time for reflection but also an opportunity to strategically align investment portfolios with philanthropic objectives. By doing so, investors can amplify their charitable impact and contribute to a more sustainable and equitable future.
Rick Barragan is the Managing Director,
Los Angeles Market Manager, for J.P. Morgan Private Bank.
[email protected] | (310) 860-3658
privatebank.jpmorgan.com/los-angeles
Source: J.P. Morgan Private Bank, October 25, 2024, How to Use your Portfolio to Amplify your Charitable Impact, by Preeti Bhattacharji, Head of Sustainable Investing, and Olivia Childs, Senior Associate, J.P. Morgan Private Bank
