End-of-Year Charitable Strategies to Maximize Impact

Some people make charitable contributions because there are specific causes that speak to them.  Others do it because they are philanthropically inclined but there are also some great tax advantages to giving money away. Charitable contributions at year-end can reduce taxable income, enhance legacy planning, and make a real difference for the causes you care about.

Key Strategies for Year-End Giving

1. Maximize Tax Efficiency with Donor-Advised Funds (DAF)
   If interested in a tax deduction that exceeds what you want to give to charity this year consider a Donor-Advised fund.  Donor-advised funds allow you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time to support your favorite charities. This flexibility enables you to manage your charitable giving in a tax-efficient manner while supporting the causes you care about.  A great way to fund a DAF is by gifting highly appreciated assets like stocks.
2. Give Appreciated Assets
   If you have a specific charity you would like to support, you are better off donating appreciated stocks or mutual funds to avoid capital gains taxes and claim deductions for their full market value than writing a check.
3. Qualified Charitable Distributions (QCDs)
   For those aged 70½ or older, a QCD from your IRA can satisfy required minimum distributions and reduce your taxable income.  Though you don’t receive a charitable deduction, you also don’t pay income tax on this gift.
4. Evaluate Corporate Matching Opportunities
   Check if your employer offers a matching program to amplify your charitable impact before the deadline.
5. Plan Legacy Giving
   Year-end is ideal for setting up charitable trusts or revisiting estate plans to include bequests, benefiting your legacy and chosen causes.
   1. Charitable Trusts: Setting up charitable trusts can be an effective way to manage your assets and ensure that your chosen causes benefit from your generosity.
   2. Bequests: Including bequests in your estate plans allows you to designate specific assets or amounts to your favorite charities, ensuring that your legacy supports the causes you care about and it reduces your overall estate when you pas.

Giving with Purpose

By aligning your charitable goals with your financial plan, you can end the year knowing your generosity has maximized impact for both you and your favorite organizations.

Contact US to explore how charitable giving strategies can fit into your year-end financial planning.