For many people, giving is an important part of the holidays. That spirit often extends beyond shopping at the mall to helping out favorite causes.

Concern about the economy makes proper planning even more important than ever.

A donor should first plan to spend time deciding which charity to support. It could be an organization that aligns with someone's personal interests or it could simply be an agency that is seeing the most need.

Linda Stetson, director of planned giving for the Cincinnati Zoo and Botanical Garden, says donors tend to support organizations they care about. "When donors contact me, they are familiar with the zoo "¢ We talk about their passions, their specific areas of interest and how they first became involved with the zoo."

After choosing a charity, the next step should be to seek professional help, Stetson says.

"I always strongly recommend that (potential donors) consult with an attorney or financial adviser who can address complex issues of taxation and estate planning law," she says, noting that the zoo has a planned giving committee of 41 attorneys and financial advisers.

Timing Plays a Role

This year is a particularly tricky time for planning, as Congress has yet to take action on the lapsed estate tax and other issues such as donations from IRAs, says Thomas Bentley, a certified financial planner and senior manager at Truepoint Inc.

"Under previous law, a person could distribute assets from their IRA if they were over 70 and a half to a charitable organization" without that money being taxed, he notes. "As of this year, it's still pending. It's just one of those many questions that Congress has to figure out."

Bentley begins his conversation with clients by asking how much they want to donate and when.

"Is it their intent to leave everything to charity or just a portion to charity and the rest of future generations? Because that will determine what kind of vehicle to use for estate planning purposes," he says.

The amount of a donation can also determine the best timing, he notes.

If someone wants to donate $5,000 or $10,000, he encourages them to think about giving now rather than later because of the benefits, both in terms of taxes and less tangible rewards.

"First off, it's an income tax deduction," he notes. "Secondly, the appreciation of those assets is removed from your estate immediately. And lastly, the person receives recognition from the charity while they are living."

Valerie Newell, chairman and managing director of RiverPoint Capital Management, agrees that there are many rewards for a person who makes a charitable gift while living. But she notes that the market volatility in recent years has created some anxiety among potential donors.

"It's a challenge because people are living longer and we've got uncertain markets. They think, "Well, gee, I'm afraid to give away some money because I might need it. If I live to be 100 or if the stock market or the bond market has problems again, then I'll have 25 percent less than what I think I'll have or 50 percent less "¢ It's a tough issue for a lot of people who are very generous."

Newell serves on the University of Cincinnati Foundation's Board of Trustees, where she is seeing more donors leaving bequests as a way of ensuring they still have what they need while they are living.

Amy L. Cheney, certified public accountant and vice president of giving strategies at The Greater Cincinnati Foundation, says her organization has heard donors express those same concerns.

"We have engaged many of them in conversations about planned giving because they were feeling that they weren't in a position to make current gifts like they had done before. It seems like the natural reaction has been to turn to bequests and other planned gifts instead."

Other Options for Giving

There are many ways to give money besides an outright gift or a bequest, depending on a donor's specific situation. For those with a significant amount of wealth, donor-advised funds and family foundations are possible options.

The advantage to family foundations is that they give donors more control over how money is spent. But Newell sees advantages in donor-advised funds such as The Greater Cincinnati Foundation because they already have a network of administrators in place and benefit from a large pool of funds.

"It's a more streamlined approach," she says.

Donor-advised fund are a good choice, for instance, if you have stock that has appreciated and you don't want to give it all away in one year.

"Say you are committed to the Art Museum," Newell says. "You're going to help with the remodeling and you agree to give them $10,000 a year for five years. You could set up a fund at the Greater Cincinnati Foundation "¢ and then over that time period, pay the funds to the Art Museum."

Security for the Future

Donors who want to help a charity but also ensure financial stability for themselves or their family have several options.

"The benefits to a planned gift include the ability to get an income stream for the rest of your life and the opportunity to give assets when you no longer need them. That's why planned gifts are often the "¢ultimate gift' of someone's life," Cheney says.

One tool for generating income is a charitable gift annuity, in which a donor makes a gift of cash, securities or property to a charity; the charity then agrees to make fixed payments to the donor over his or her lifetime. Split trusts are another useful option. Two commonly used trusts are charitable lead trusts and charitable remainder trusts, Cheney says.

In a charitable lead trust, a donor places assets into a trust and every year a charity will receive a certain distribution. But after a donor dies, those assets pass on to the next generation.

A charitable remainder trust works in reverse. A donor places assets into a trust and either the donor or beneficiaries (usually family members) receives an income from the trust for a certain number of years. After the donor dies, the remainder of the money goes to the charity.

Weathering the Downturn

Despite the rough economy, Cheney says the level of giving to The Greater Cincinnati Foundation during 2009 was "pretty average "” not bad during a really bad economy."

So far, things are looking a little better than last year. "But it's still early since half of our volume happens in the fourth quarter."

Charitable giving "” including membership "” makes up 75 percent of the zoo's $25 million budget. Stetson says the zoo has not seen a drop in giving in recent years, a fact she credits in part to good stewardship and open communication.

"Transparency is important," she says. "Donors need and deserve to know that we are using their gifts wisely."