As 2019 wanes, consider the many ways charitable giving can brighten a holiday season.

Today’s giving strategies not only provide tax benefits, but also something else that may be important to givers like you: choice.

Timelessly Simple

Writing a check. This is one of the easiest ways to gift, especially for those who give sporadically to a limited number of charities. Of course, you can also donate gently used items and clothing.

Donating appreciated securities. Doing so means you’ll receive an immediate tax deduction and can help you avoid paying capital gains tax on the appreciated portion of their value. Gifts also have the potential to reduce future estate taxes.

Donor-advised funds (DAFs). Think of this as a charitable checking account. DAFs combine the ease of direct giving with the benefits of a private foundation – with less work and time commitment. Because the funds are sponsored by a charitable organization, donors avoid the cost and upkeep of creating a foundation, but still have a hand in the grant-making decisions and can even name the fund itself. To get started, you make an irrevocable contribution (e.g., cash or marketable securities) to the fund. You take an immediate tax deduction, subject to income limitations; the fund sells and reinvests the assets, and you help direct when and how the proceeds are used, often with a few simple clicks online.*

Bunching. If you’re charitably inclined but won’t have sufficient itemized deductions to exceed the increased standard deduction, you may wish to bunch deductions by making a large charitable gift during a single year, equal to the total donations you would have made over several years. This can help you take advantage of itemizing in the year of your large donation, while taking the standard deduction in future years. This strategy can work particularly well with donor advised funds, described above.

Seriously Sophisticated

Charitable remainder trusts. A significant step up for serious donors, this popular, irrevocable trust allows you to donate an asset, which the trustee will sell and reinvest the proceeds in an income-producing portfolio. You then receive the tax deduction, as well as a percentage or fixed amount of income. When you pass away, the remaining funds go to the designated charity.

Giving Wisely

As mentioned, year-end giving benefits you with a tax deduction. Because everyone’s tax situation is unique and the codes are complex, work with your financial and tax advisors first to determine how to give and at what level. Doing so can help you live comfortably while giving wisely.

Legal Disclaimer

More Articles

  • family discussion about selecting a beneficiary

    6 Questions to Ask Yourself When Selecting a Beneficiary

    January 1, 2020

    Choosing a beneficiary is rarely given the thought it deserves. You’re writing

    Read More

  • 5 Lessons From Warren Buffett

    May 15, 2017

    Warren Buffett is considered to be one of the most successful investor in the world.

    Read More

  • Elisa-Jones-Southwestern_Investment-Group

    Associate Spotlight: Elisa Leftridge Jones

    October 22, 2020

    Helping our clients build their way toward their dreams—that’s what Elisa Leftridge

    Read More

< Back to Resources