Clients often reflect on what matters most in their lives: family, community, and the legacy they want to leave behind. Charitable giving can be one of the most meaningful ways to express those values, while also creating opportunities for thoughtful tax planning.
If you’re already charitably inclined, year-end is the ideal time to review how you give, not just how much. A few strategic adjustments can make your generosity go further, both for the causes you care about and for your own financial plan.
Give from the right accounts.
If you’re age 70 ½ or older, consider making Qualified Charitable Distributions (QCDs) directly from your IRA to a qualified charity:
- You can donate up to $108,000 per person in 2025.
- The distribution can satisfy all or part of your Required Minimum Distribution (RMD).
- Because the money goes directly to the charity, it’s excluded from your taxable income, which can help reduce Medicare premium surcharges and the taxability of Social Security benefits.
QCDs are simple, effective, and highly efficient for retirees who no longer itemize deductions.
Donate appreciated investments instead of cash.
If you’ve held stocks, ETFs, or mutual funds for more than a year and they’ve appreciated, donating them directly to charity can provide two key benefits:
- You avoid paying capital gains tax on the appreciation.
- You can deduct the fair market value of the security if you itemize.
This allows the charity to receive the full value of your investment, and you preserve your cash for other needs or giving opportunities.
Use a Donor-Advised Fund for flexibility.
A Donor-Advised Fund (DAF) acts as a charitable investment account that lets you make a single large contribution in one year, take the deduction immediately, and then distribute the funds to charities over time.
This approach can be particularly valuable in years when your income, and therefore your tax bracket, is higher than usual, such as following a large Roth conversion, business sale, or real estate transaction.
Think of a DAF as a way to “front-load” your giving while maintaining the flexibility to support causes on your own timeline.
Bundle or “stack” contributions strategically.
Under the current tax law, many retirees take the standard deduction and no longer receive a tax benefit from annual charitable gifts. One potential workaround is to bundle multiple years’ worth of donations into a single year, allowing you to itemize that year, and then use the standard deduction in alternating years.
Coordinate giving with your broader financial plan.
Your charitable giving shouldn’t happen in isolation. It’s part of the bigger picture, your cash flow, your estate goals, and your tax strategy:
- Are your donations aligned with your required withdrawals?
- Have you reviewed beneficiary designations for your retirement and investment accounts?
- Would you prefer to leave a portion of your IRA to charity and taxable assets to heirs?
A coordinated approach ensures your giving supports both your values and your long-term financial goals.
Charitable giving is where personal values meet thoughtful financial planning. The most rewarding plans are those that align your wealth with your purpose – supporting the organizations you care about while also being a good steward of your family’s financial wellbeing.
If you’d like to review your charitable giving options, don’t hesitate to reach out. We can help you understand the financial and tax implications of each approach and collaborate with your CPA and estate attorney to make sure your plan is executed properly.
Disclaimer: The information above is for general educational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. You should consult with your CPA and/or attorney before implementing any estate planning, gifting, or tax-related strategy.