The holiday season naturally brings a renewed focus on family, community, gratitude, and the causes that matter most. It is also one of the most popular times of year for charitable giving. While generosity begins with the desire to make a difference, thoughtful planning can help you support the organizations you care about while keeping your broader financial goals in mind.
For many people, charitable giving starts with writing a check or making a cash donation. While simple and meaningful, cash may not always be the most tax-efficient way to give. Depending on your circumstances, there may be strategies worth considering.
One option is donating appreciated investments, such as stocks, mutual funds, or exchange-traded funds. If an investment has grown in value, gifting it directly to a qualified charity may help reduce capital gains tax exposure while allowing more of your donation to benefit the organization.
Another strategy is using a donor-advised fund (DAF). A DAF allows you to make a charitable contribution, potentially receive a tax deduction in the year of the gift, and recommend grants to qualified charities over time. This approach can be especially useful during higher-income years, after the sale of a business, or for families looking to create a more intentional, long-term giving plan.
Individuals age 70½ or older may also benefit from discussing Qualified Charitable Distributions (QCDs). A QCD allows eligible IRA owners to transfer funds directly from an IRA to a qualified charity. For those taking required minimum distributions (RMDs), a QCD may satisfy all or part of that requirement while potentially reducing taxable income.
Charitable planning is about more than the amount you give. It is about aligning your generosity with your values, your goals, and your overall financial plan. Every family approaches giving differently, whether supporting local nonprofits each year or creating a lasting legacy of philanthropy.
It is also worth remembering that generosity extends beyond financial contributions. Volunteering your time, sharing your expertise, mentoring others, or simply helping your community can make a meaningful and lasting impact.
As the year comes to a close, consider reviewing your charitable goals alongside your broader financial plan. With thoughtful preparation, your giving can reflect both your values and your long-term objectives.
At Wealth Avenue, we help individuals and families explore charitable giving strategies that align their resources with the causes they care about most.
This is meant for educational purposes only, and information presented should not be considered advice or a recommendation to take any particular course of action. United Planners’ representatives do not provide tax advice. Always consult with your financial professionals regarding your personal situation before making financial decisions.
Philip Maliniak is a Registered Principal offering Securities and Advisory Services through United Planners Financial Services member: FINRA SIPC. Wealth Avenue™ and United Planners are not affiliated.
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