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Giving Thoughtfully ... and Strategically

Posted July 2020

Giving is a thoughtful gesture. Many of our friends and supporters give because they wish to express their gratitude or honor/memorialize a loved one. But giving can also be strategic. Here are a few ideas that can help you maximize your philanthropy.

1. Consider what your gifts can achieve

The size of your gift may determine whether you can establish a fund bearing your name, the level of recognition you receive, and whether you might claim an income-tax deduction (if you itemize your deductions). But a smaller gift can also be impactful.

Example: Jennifer wants to support a specific program she cares deeply about. The minimum amount necessary to establish an endowed (perpetual) fund is more than what Jennifer wants to donate. Jennifer plans to donate $5,000. The gift planning officer suggests that Jennifer direct her gift to an already existing fund that helps fund her preferred program. This will achieve her goal to support her preferred program—with the added bonus of providing support in perpetuity due to the nature of an endowed fund.

2. Reap the benefits from your IRA

The SECURE Act and CARES Act—which both became law earlier this year—raised the age at which we must begin taking required minimum distributions (RMDs) to the age of 72 and then waived the requirement to take RMDs in 2020, respectively. But neither law prohibits donors aged 70½ or older from making gifts from their IRAs if they choose to do so. Savvy donors know that these gifts are tax-wise because no income tax is owed on gifts up to $100,000 made directly to eligible charities. The IRA is treated by some as a bucket from which to make gifts to charity.

3. Choose appreciated stock gifts over cash

Generally, a gift of appreciated stock reaps you more benefits than a gift of cash, and many people still have appreciated stocks despite the recent downturn in the market. When you donate stock to a charity, you avoid paying tax on the gain and you can claim a tax deduction for the fair-market value of the stock. This is one of the simplest and tax-wise ways to make a gift to charity. (And your checking account will thank you!)

We would be pleased to speak with you about these and other strategic ways you can be philanthropic.

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