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Thoughtful Philanthropy Part II

Working the Plan

Now is a great time to assess where your charitable dollars have gone so far and to set plans for your total giving for the year. There could be tax benefits to reap, stretching what you can give to charity. (As we write this, a new tax bill is being considered in Congress. It is possible that charitable contributions will be treated differently if and when any new tax laws are passed). We always recommend you discuss tax strategies with your CPA.

Power in Numbers

Consider forming a giving group to share in research and to pool money for chosen charities. Make the charitable giving a family affair, shared among multi-generations or award the kids a chance to direct dollars.

Bag the Match

Some employers match financial contributions or contribute dollars based on volunteer time. Don’t forget to max out your allowance if your finances permit it.

Reap and pass on the tax benefits

A gift to a qualified charitable organization may entitle you to a charitable deduction if you itemize deductions. Confirm that your targeted donation goes to 501(3)(c) organizations. Always keep documentation of your gift if you seek the tax deductibility.

Tax Strategy #1: “Bunch up” multi-year giving in one year with a donor advised fund

Donor advised funds (DAF) are simply mutual fund style “holding tanks” that enable individuals to make a gift in one year to garner a charitable deduction, while allowing the donor time to decide to whom, how much and when to give to desired charities. Lumping a number of years of charitable giving into one year for tax purposes could come in handy during a year in which you have higher than normal taxable income.

While there is no limitation on when you must distribute funds from a DAF, three quarters of funds deposited in DAF’s by donors are distributed out to charities within 5 years.

Tax Strategy #2 Giving appreciated assets better than cash

If you have appreciated taxable investments, you may donate those assets directly to a charity or DAF and get a charitable deduction equal to the market value of the asset. As long as the shares or units are not sold before the transfer, you are not responsible for capital gains taxes once they are in the hands of a charity. There are limitations of how much you can deduct in any given year.

Tax Strategy #3:  IRA account owners who are taking required minimum contributions (RMDs) can direct them to charity and not report the income

This strategy helps work around the unfortunate dilemma of not being able to fully deduct contributions if total deductions including the gift don’t exceed the standard deduction.   If you direct all or a part of your RMD to charity you don’t report the income. Not only is every dollar given to charity removed from reportable income, it is possible total taxable income could decline as well -like the amount of Social Security that is ordinarily taxable.

Leave a legacy

Name a charity in your will to receive a portion of your estate, create a foundation, commission a work of art or music, create a permanent scholarship fund, leave your body to science. Options are only limited by your imagination.

Split Lifetime Gifts

There are additional tax strategies and vehicles (like charitable remainder trusts) that can involve gifting an asset but retaining an income stream from that asset while living.


We are interested in hearing about your charitable plans.




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