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Giving Back in Retirement: 4 Common Mistakes to Avoid

If you're thinking about joining the board of a nonprofit, donating your expertise, or simply volunteering, here's how to help make it even more impactful.

A happy man hands out canned food at a food pantry.

Giving back in retirement can offer profound benefits not only for yourself but also for the organization you’re helping. A 2017 study by United HealthCare found that 93 percent of those who volunteer notice an improvement in mood, 75 percent feel physically healthier, and 79 percent experience lower stress levels. And nonprofit organizations that work with retirees benefit from the additional time they can commit, the unique skills they bring, and the life experiences that shape their perspective.

The key to having the most impact is developing a carefully thought-out approach to how, and where, you decide to make a difference.

Below, Amanda Weitman, Managing Director – Wealth Advisor with Wells Fargo Private Bank, and Beth Renner, National Director of Wells Fargo Philanthropic Services, share four common mistakes that can derail your desire to make a difference—and the actions you should consider taking instead.

Mistake #1: Not understanding your role and goals

Understanding how the value of donating your time aligns with the organization’s goals can help avoid confusion and frustration.

One example: Implementing a process at a nonprofit based on the success it had at your company without fully understanding the implications for the organization. “I think it is important for volunteers to be patient as they introduce new ideas to recognize that the solutions that worked for their company may or may not work for the nonprofit,” Weitman says. “They’re different.”

The solution: Spend time clarifying with nonprofit staff how your role could yield the most benefits. “I see a lot of board members who bring their own set of preconceived ideas, and they sometimes override what the organization’s values or mission is,” Renner says. “That can sometimes create mission drift. Your role is to help support the mission, not necessarily override it.”

Mistake #2: Not setting realistic expectations

Let’s say you donate what you consider to be a significant amount of time, energy, or money to a cause. The results can still fall short. “It can be sign that, as a donor, your expectations are not in alignment with the reality of what is needed to accomplish the results,” Renner says. “Does your investment of time and money match with what can actually be accomplished? Are you under-investing and over-expecting?”

The solution: To avoid feeling frustrated, make sure you understand the limits of donating your time, whether it’s providing immediate relief, becoming an advocate, educating the community or other reasons. For example, volunteering at a food bank may fight hunger in your community, but it might not make a long-term impact on the problem of food insecurity. Instead, you may need to support a different organization to make an impact there. Renner adds that it’s also important to look into how the food bank is performing so you feel it’s being as impactful as possible with the resources it has. “I think that is where donors struggle,” Renner says. “They may have clarity on the cause they want to address but struggle with finding the best path forward from a giving standpoint.”

Mistake #3: Staying in your comfort zone

Putting your well-honed career skills to good use when donating your time can be a satisfying way to give back. But getting out of your comfort zone by exploring different areas of the nonprofit sector that you might not have thought about before retirement could open you to more exciting and rewarding possibilities.

The solution: Be open to suggestions from others regarding making the best use of your time and talents. Weitman recalls inviting friends to tour a prison to learn about philanthropy work related to social justice. Although one friend was nervous about going, they were all glad they went in the end. “That was really cool that they were willing to go out of their comfort zone and do that—it’s now their passion,” she says.

Mistake #4: Not planning ahead

It’s important to have a carefully considered plan for funding your donations so you’re not in a cash flow crunch or paying penalties or taxes you didn’t expect. Giving is great, but it’s a discretionary cost, and one that can generally be mapped months if not years in advance. “Make sure you set aside money for your philanthropy work so you’re not making choices between paying for personal expenses and charitable giving,” Weitman says.

The solution: Creating an Intentional Giving Plan can help you develop an effective philanthropic strategy that aligns with your values without impacting what you’re putting aside for your retirement needs.

You may also want to consider creating a donor advised fund where you can contribute to whatever 501(c)(3) organization you choose. Over time, the money from the fund is distributed to charitable organizations you designate.

“This philanthropic planning process—like a financial planning process—can give you confidence and peace of mind about enjoying your retirement to its fullest while helping causes that matter to you,” Renner says.

Michael Fuchs is senior editor on Wells Fargo Conversations.

What can Wells Fargo do for you?

Your passion for giving is unique, and your strategy should reflect that. Talk to your team at Wells Fargo to get started.

Wells Fargo Wealth Planning Center, part of Wells Fargo Private Bank, provides wealth and financial planning services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries.

Wells Fargo & Company and its affiliates do not provide legal advice. Wells Fargo Advisors does not provide tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.

Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo Advisors. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

This information is provided for educational and illustrative purposes only.

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