We've been sitting on some highly-appreciated shares of Tweedy, Browne Global Value. (Worth over $33/share, bought at $14-$16 a decade ago.) IMO TBGVX is bloated and their currency hedging no longer justifies a 1.38% ER amid today's declining dollar. It was easy to switch the IRAs to a cheaper international allocation (Powershares International Dividend ETF, PID, 0.6%) but in our taxable accounts we've been waiting on 2008's lower cap-gains rates.
In a seemingly unrelated project we've been trying to figure out how to get more organized & efficient with our charitable giving. The obstacles have been convincing ourselves that we wouldn't "need" the money someday (perhaps for long-term care?), avoiding being a burden to our kid, finding a worthy charity, and preserving our anonymity.
The ER portfolio's last couple years' returns and our comfort with our expenses have finally convinced us that we won't need the money someday. Giving away enough to raise our SWR a tad (to 4%) is no problem. I especially like Rich's idea about hedging LTC expenses with term life insurance but I suspect that we'll stay self-insured for LTC. And we'll meet every parent's goal of being no more of a burden to our teenager than she already thinks we are.
Finding a worthy charity? Well, perhaps our standards have been a bit high. It seems to be "paralysis by analysis" to look for the world's most efficient & worthwhile charity when Oahu has a community foundation, our local Institute for Human Services, and the food bank. Might as well put the money to work now. I'd much rather give local and we can still hedge our bets someday with academic scholarships or Rabbit Kekai's keiki surf foundation.
Anonymity is still an issue but we might have figured that one out.
Spouse was also laboring under the misapprehension that we'd have to donate cash to charity instead of donating appreciated shares, which to her meant paying cap gains to sell off some of the ER portfolio. (It never occurred to me to donate appreciated shares to a local charity but, typical spouse situation, I didn't realize that she didn't know about it.) Even so it's still cumbersome to donate a few shares of TBGVX to a local charity, and anonymity is darn near impossible. However she read an article on donor-advised funds and she realized how this happens. When I read the article I realized that Fidelity can handle the donations anonymously.
We've been wrapped around the axle of figuring out a complete solution involving the amount, the recipient, and the timing. However a donor-advised fund neatly splits the whole project into smaller pieces. We can donate whenever we want. We don't have to pick a charity right away and we don't have to match our actual grant to our estimated taxes. We don't have to figure out a way to do it anonymously. Fidelity's 0.6% expense ratio ain't cheap but it's petty cash next to the effort of setting up a private foundation or of finding a cutout to handle anonymous donations.
Fidelity's been doing this since 1999 and it looks like they have the bugs worked out. Since we have a Fidelity account it'd be easy to funnel our giving through their website.
Does anyone else here use Fidelity for donations & grants? Any problems or other surprises with Fidelity or with DAFs in general?
In a seemingly unrelated project we've been trying to figure out how to get more organized & efficient with our charitable giving. The obstacles have been convincing ourselves that we wouldn't "need" the money someday (perhaps for long-term care?), avoiding being a burden to our kid, finding a worthy charity, and preserving our anonymity.
The ER portfolio's last couple years' returns and our comfort with our expenses have finally convinced us that we won't need the money someday. Giving away enough to raise our SWR a tad (to 4%) is no problem. I especially like Rich's idea about hedging LTC expenses with term life insurance but I suspect that we'll stay self-insured for LTC. And we'll meet every parent's goal of being no more of a burden to our teenager than she already thinks we are.
Finding a worthy charity? Well, perhaps our standards have been a bit high. It seems to be "paralysis by analysis" to look for the world's most efficient & worthwhile charity when Oahu has a community foundation, our local Institute for Human Services, and the food bank. Might as well put the money to work now. I'd much rather give local and we can still hedge our bets someday with academic scholarships or Rabbit Kekai's keiki surf foundation.
Anonymity is still an issue but we might have figured that one out.
Spouse was also laboring under the misapprehension that we'd have to donate cash to charity instead of donating appreciated shares, which to her meant paying cap gains to sell off some of the ER portfolio. (It never occurred to me to donate appreciated shares to a local charity but, typical spouse situation, I didn't realize that she didn't know about it.) Even so it's still cumbersome to donate a few shares of TBGVX to a local charity, and anonymity is darn near impossible. However she read an article on donor-advised funds and she realized how this happens. When I read the article I realized that Fidelity can handle the donations anonymously.
We've been wrapped around the axle of figuring out a complete solution involving the amount, the recipient, and the timing. However a donor-advised fund neatly splits the whole project into smaller pieces. We can donate whenever we want. We don't have to pick a charity right away and we don't have to match our actual grant to our estimated taxes. We don't have to figure out a way to do it anonymously. Fidelity's 0.6% expense ratio ain't cheap but it's petty cash next to the effort of setting up a private foundation or of finding a cutout to handle anonymous donations.
Fidelity's been doing this since 1999 and it looks like they have the bugs worked out. Since we have a Fidelity account it'd be easy to funnel our giving through their website.
Does anyone else here use Fidelity for donations & grants? Any problems or other surprises with Fidelity or with DAFs in general?
Another interesting fact: with Vanguard (don't know if this is true of the others), I was told by my account representative that Vanguard Charitable is bound by the IRS to distribute a minimum of 5% of the total assets held by Vanguard Charitable, not your own individual account (which is what I assumed). The IRS requires that, after the first 5 years, an average of 5% minimum of the average annual donations to the Vanguard Charitable Fund must be disbursed to charities. Since Vanguard Charitable has averaged something like 15%-20% overall for several years, that means that I can let my balance grow (hopefully! 
