Giving Season Has Arrived! Here's 5 Ways to Maximize Your Year-End Giving Strategy

Key Takeaways: 

• Strategic giving can boost your tax benefits, especially when using tools like donor-advised funds, appreciated stock, or Qualified Charitable Distributions (QCDs).
• Bundling donations every few years may help you surpass the standard deduction threshold and make your giving more tax-efficient.
• Staying organized and reviewing your giving plan annually ensures your charitable efforts align with your financial goals and personal values.

Wondering if you’re as prepared as possible for the upcoming giving season?  In order to minimize stress and maximize your gifting abilities, it’s important to keep in mind a few details around charitable gifting. 

If you’re not sure how your finances match up with your upcoming year-end giving strategy, now is the time to prepare yourself by reviewing your options.  Organization is key in order to properly give this holiday season.

How to Maximize Your Charitable Giving Strategy

Follow these five tips to maximize your charitable giving strategy:

1. Do Your Research

By using sites such as Guidestar or the Better Business Bureau’s Wise Giving Alliance, you can learn more about the groups you’re interested in offering donations to. 

The organization you’re involved with should also be able to provide registration information, including 501(c)(3). You may also use the tax-exempt organization search tool available on the IRS website to obtain specific information. 

2. Bundle Your Donations

As the standard deduction has increased over the years, you may choose to save money over time and donate every few years as opposed to each year, consecutively. By doing this, you may receive your itemized deductions over the limit one year and take the standard deduction the next - so-called "bunching" donations. 

If you’re interested in accomplishing this, you might also consider a donor-advised fund, which allows you to make a charitable donation and immediately receive a tax break. You’ll then be able to recommend grants from the fund to your preferred charities over time. 

3. Donate Appreciated Stock

By donating stocks or other appreciated assets, such as artwork or antiques, you might reduce capital gains tax on investments.¹ 

In particular, high-income earners might consider a non-cash donation specifically because of the tax advantages they may be awarded. Even those who have what they might consider to be small holdings could benefit by donating appreciated investments this holiday season. 

4. Utilize Your IRA

If you’re a retiree over the age of 70, you might consider transferring money from your IRA directly to a qualified charity.  This process is called a Qualified Charitable Distribution (QCD).  These distributions can be a tax-efficient way of meeting any required minimum distribution. Additionally, there’s no need to itemize your deductions to benefit.  

According to the National Association of Enrolled Agents, you may distribute up to $100,000 per year per taxpayer. This increases to an acceptable $200,000 for married couples if they both have IRAs.² Although this strategy has existed for some time, it only recently became a part of the permanent tax code. 

5. Monitor and Evaluate Your Portfolio 

No matter the size of your seasonal contributions, it’s always important to keep up with your portfolio to give properly and confidently. Staying up to date on newsletters, annual reports, and CEO updates can be an important factor when it comes to understanding the operations of various organizations. 

It’s important to set personal reminders, at least annually, to re-evaluate your financial and personal priorities and update them if need be. Your interests and priorities are bound to change over time, and so will the causes you choose to support. Being aware of these fluctuations is key, and maintaining a thoughtful attitude is what makes the holidays meaningful.