Giving Back: Charitable Giving Opportunities

Giving Back: Charitable Giving OpportunitiesAccomplished individuals often look for opportunities to express their values and give back through charitable giving.  In fact, Bill Gates and Warren Buffet started an initiative called the Giving Pledge, which encourages the world’s wealthiest people to give away much of their fortune to charity.  Over 100 notable contributors have made the commitment to dedicate the majority of their wealth to philanthropy, including Richard Branson, Michael Bloomberg, Diane von Furstenberg and Mark Zuckerberg.

In addition to benefitting the community or cause the giving is focused on, charitable giving can also provide benefits to the donor.  Whether you’re nearing the end of your career and looking to leave a legacy or you’re passionate about a cause or making an impact for future generations, establishing a charitable giving approach can have the added benefit of reducing your taxable income.

 So how can you incorporate charitable giving into your larger estate planning strategy?

  • Utilize Donor-Advised Funds – Donor funds are traditionally sponsored by public charities and provide a rather uncomplicated way to donate money.  Donations to a donor-advised fund are deductible in the year they are contributed but can be given to charities in other years.   Donors can enjoy a tax deduction of up to 50% of adjusted gross income for cash donations or 30% for appreciated assets.   Donor-advised funds are good for individuals who want to give back but don’t have the time to be more involved or hands on.  On the other hand, the donor does not have much control over the way the funds they donate are ultimately utilized.
  • Set Up a Foundation – Not for the faint of heart, starting a foundation is for individuals who really want to get involved, roll up their sleeves and have control over the process to benefit a cause.  Running a foundation is much like running a business, with a board of directors and trustees, and requires an extensive amount of time and focus.  Most non-profit foundations are tax exempt.
  • Start a Scholarship Fund – Not only has the cost of higher education surged by over 500% in the past 30 years, but college textbooks costs are also on the rise, having increased by 73% over the past 10 years.  A great way to give back and to personalize your giving is by starting a scholarship fund.  Whether your late father had a love of law or your mother was passionate about music, you also often have the ability to honor a loved one by setting up a fund in their name.  On the tax side, scholarship fund donations are usually treated the same as donor-advised funds.

Some other things to take into consideration when making charitable donations are the type of property being donated (which can have an impact on tax consequences) as well as how the contribution is made. 

It’s important to work with a trusted advisor who will help you to navigate the intricacies of charitable giving and to determine what is right for your goals, financial situation and desired level of involvement so that you can leave the legacy you desire.

Matt Bauer
President
mbauer@srfm.com

Giving Back: Charitable Giving Opportunities

Spring Hazards: Worker Safety During Warmer Weather

Spring Hazards: Worker Safety During Warmer Weather Spring signifies the end of winter and a season of new beginnings.  It ushers in budding trees, blooming flowers and warmer temperatures.  It can also bring with it quickly changing conditions and hazards that employers and workers need to be aware of and prepare for to ensure safety.

 While, overall, workplaces are safer today, many people are still seriously injured on the job, especially in industries like manufacturing, construction, transportation, warehousing and oil and gas extraction.  While accidents happen, many are preventable. In fact, the Occupational Safety and Health Administration (OSHA) found that more than 10,000 severe injuries were caused by workplace conditions in 2015.

 What top three hazards do employers need to be aware of during spring? 

  1. Severe Weather and Flooding- Floods and tornadoes are the most common hazards in the United States during spring.  From melting snow to sudden spring showers, flooding can happen quickly and with little warning.  Not only should workers and employers be aware of weather forecasts, but workers should be trained on severe weather plans and have emergency supplies with them to be prepared if severe weather strikes.  OSHA and the National Oceanic and Atmospheric Administration (NOAA) have partnered to provide a comprehensive resource aimed at helping businesses and workers prepare for severe weather, like flooding
  2. Outdoor Work – From construction workers on scaffolding to flagmen helping to direct traffic at highway work zones, outdoor working conditions in the warm spring weather can naturally cause hazards for workers. In fact, more than 100 workers are killed and more than 20,000 are injured in the highway and street construction industry each year, with over half of the fatalities resulting from vehicles and equipment operating around the work zone. It’s imperative that employers put controls in place and train employees to protect workers from injury in outdoor settings.  The National Institute for Occupational Safety and Health provides guides for many industries.
  3. Driving and Pedestrian Safety – As the warm weather approaches, more people get out to enjoy the warm weather – from people walking dogs to motorcyclists enjoying a ride to children riding bicycles.  Naturally, this means that there are more incidents of accidents involving driving and pedestriansIt’s important that drivers properly maintain their vehicles, exercise caution, travel at a reasonable speed, pay attention and avoid distractions like texting.    

Employers are required by law to provide their workers with a workplace free from serious recognized hazards and to comply with standards, rules and regulations issued under the OSH Act.  In addition to ensuring safety protocols, plans and training take place to prevent workplace accidents and injuries, each industry has its own nuances and risks.  At Sinclair Risk & Financial Management, we take the time to understand your company and individual situation and work with you to help you minimize your company’s risks. 

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

Spring Hazards: Worker Safety During Warmer Weather

Are you Protecting Your Construction Business Properly?

Are you Protecting Your Construction Business Properly?2016 is expected to be a strong, steady year of growth in the construction industry, with the 2016 Dodge Construction Outlook predicting that the U.S. construction starts for 2016 will rise 6% to $712 billion.  This environment is expected to be supported by the U.S. economy, with relaxed lending standards and support from state and local construction bond measures.  And while the Federal Reserve increased short-term interest rates by 0.25% at the end of 2015 for the first time since the financial crisis, long-term rates are expected to rise more gradually.

With spring’s busy season right around the corner, there are several trends that industry experts are also watching, including the overwhelming issue of a lack of access to skilled labor.  The combination of layoffs during the economic downturn along with a slowdown in immigration  is contributing to the industry’s skilled worker shortage.  This talent deficit is only worsened by the industry’s struggle to appeal to the younger, more tech savvy workforce during a time that a large number of baby boomers are retiring and companies need skilled workers at all levels.

In addition, while the outlook is good for the construction industry, businesses are facing a competitive landscape and increasing customer expectations for a quality job to be done on time and on budget with limited resources.  More and more businesses are facing a variety of risks associated with this environment, such as claims of faulty workmanship, design errors or omissions and the use of defective materials and products.

These types of claims are challenging because they can result from a number of factors and can occur years after a project is completed.  They can also be devastating to a business that may have a commercial general liability policy, which would cover property damages resulting from accidents or occurrences, but may not be protected against claims of faulty workmanship.  If you provide construction services, install products during your construction services, provide in-house design or engineering services (or subcontract design services out) and perform the construction, you are at risk.

Many businesses choose to protect themselves with Errors and Omissions coverage. Essentially, Errors & Omissions coverage provides protection for you in the event that an error or omission on your part has caused a financial loss for your client.

Regardless of how well a business is run, mistakes, errors and omissions occur and even unfounded allegations can costs thousands of dollars in defense. Additionally, even false claims can damage a company’s reputation and impact profitability.  So how do you protect your company and reputation?  Work with a trusted risk management partner that will take the time to understand your business and particular challenges and help put together the right coverage for you.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

 

Disruption Ahead: The Brave New World of Self-Driving Cars

the self-driving car is comingLike it or not, self-driving cars are coming.  A rapid increase in the use of “autonomous automobiles,” as industry savants prefer to call them, is seen by many as a foregone conclusion.  Following the early lead of Google, which has been developing the concept for over six years, virtually every carmaker in the U.S. market is working on some version of this new technology.  Some, like Tesla and Cadillac, are already introducing aspects of these systems into their cars.  The ultimate mass-market endorsement, though, was surely the recent Time Magazine cover story that devoted a whopping nine pages to the subject, mostly extolling the upsides of this “next big thing” and the vastly transformative affect it will have on our lives.

Within the US insurance industry, however, everything about the coming of the self-driving car is not so rosy.  While much about the future of these cars is open to vigorous debate — for the simple reason that their full impact on the daily lives of American drivers is unknowable at this point — many in the insurance industry see these new cars as a potential source of disruption.  And not in the happy, trendy way tech entrepreneurs like to throw that term around.  The capacity for autonomous driving to reduce traffic accidents and especially fatalities, and all of the personal, legal and emotional costs that come with them, will likely undermine much of what is currently considered accepted fact in the automobile insurance business, and not just a little.

The most dire outlook so far was laid out last year in a report by the influential accounting firm KPMG, which predicted that a steep decline in automobile accidents over the next decade would be followed by a corresponding drop in accident claims and insurance premiums.  Within 25 years, the report predicts, these declines could reduce the volume of the entire insurance industry to “40 percent of its current size.”  According to the Insurance Information Institute, research shows that even in its earliest stages, the bits of driverless technology and related safety features already introduced into American cars have begun to reduce the number of fatalities between 2008 and 2011 by as much as a third.  This trend will pick up more speed as more pieces of these systems are added will have an ever greater influence on the economics of the industry.

 Other predictions about the timing and extent of these changes vary greatly.  The most optimistic estimates for the complete adaptation of the autonomous automobile pinpoint the year 2030 as the date by which all American cars will have this technology.  Other sources see too many potential roadblocks still lying ahead for there to be complete market penetration by anything close to that date.  Most estimates see a gradual introduction of features over the next two to three decades with a proportional decline in the role of the driver as the technology is refined and the public, as well as federal and local governments become more comfortable with it.  By some accounts, the complete integration of this technology could take another 30 to 40 years, if not longer.

In addition to the fundamental economic impact of driverless cars on the insurance industry, there is also a thicket of legal and political issues about liability and culpability that has to be cleared over the next several years, a task made all the more difficult because many of those issues need to be worked out on a state-by-state basis.  If the past is any indication, the big question about who is responsible in a collision involving an autonomous car: the owner, the car manufacturer or the developer of the technology — and their respective underwriters will be pounded out one small increment at a time.  So hang on for a very bumpy ride, which is the one aspect of this automotive innovation that is not likely to be fixed by technology.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com

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