Many people reach a point in their financial lives where they begin to think about the kind of difference they want to make. As an advisor who also believes in supporting strong communities, charitable giving can be a meaningful place to start.
Charitable giving is generous at heart, but it can also play an important role in your financial and estate plan. With a thoughtful approach and the help of a seasoned advisor and CPA, you can support the causes you care about, find potential tax benefits, and create a legacy that lasts. Here are a few giving strategies to explore.
Give While You Are Living
Giving during your lifetime can be incredibly fulfilling. You can see the impact of your generosity and possibly benefit from income tax deductions. It also allows you to be intentional with your giving so that your choices reflect your values and the needs of the community you care about.
Donor-Advised Funds
A donor-advised fund (DAF) works a lot like a personal charitable account. You can contribute money or assets, receive an immediate tax deduction, and then recommend grants to the organizations you want to support at your own pace. Many families enjoy using a donor-advised fund because it creates a simple way to make giving a shared experience.
Charitable Gift Annuities and Trusts
If you would like to give but still need a steady income, charitable gift annuities or charitable remainder trusts can offer a helpful balance. You make a gift, receive a partial tax deduction, and continue to receive income for life or for a set period. Whatever remains after that time goes directly to the charity you select.
Include Charities in Your Estate Plan
You can also plan to give in the future. Naming a charity as a beneficiary of a retirement account or life insurance policy, or adding a charitable bequest to your will, allows your values to live on. This type of planning can ensure that your legacy continues to support the people and causes that matter most to you.
Consider Bunching Your Charitable Gifts
Bunching is a way to combine several years of planned charitable donations into one tax year. When your total giving is grouped together, your deductions may be high enough to itemize for that year and potentially increase your tax benefit. In the years that follow, you can return to taking the standard deduction while still supporting the organizations you care about through a donor-advised fund. It is a simple, practical strategy that helps you make the most of the giving you already plan to do.
Look for Tax-Efficient Ways to Give
Some assets are more efficient to donate than others. Appreciated stocks, for example, can be a smart choice. When you give appreciated assets directly to a qualified organization, you may avoid capital gains taxes while still receiving a charitable deduction. This can help your gift go even further for the community.
Thoughtful charitable giving can create a ripple effect that reaches far beyond the dollars themselves. With the right plan and financial advisor, you can support your community, amplify the impact of your resources, and create something meaningful for future generations.
If you would like help exploring which strategies may be right for you, our team is here and ready to support you.