February 25, 2024

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Year-End Charitable Giving Strategies

While individual and corporate charitable giving receives a high profile during the holiday season and year-end, it should be a year-round endeavor.

Americans gave $499.3 billion to religious groups, charities and nonprofits in 2022; corporations gave $21.08 billion. That’s only the “treasure” component of the philanthropic giving triad that also includes time and talent, or volunteerism and expertise.

With the right strategy of purposeful giving, donors from the most modest to the very wealthy can fund their nonprofit of choice more effectively throughout the year. Below are several giving practices to keep in mind …

Budget purposefully. Put aside giving amounts for all the causes you hope to support, whether community causes, larger initiatives, even GoFundMe requests. Staying focused on the causes you support and how much you or your company can donate annually can keep giving on track and purposeful.

Do your homework. Know to whom you are giving. Many so-called charities are scams. Others are badly run and don’t achieve what they promise. Others still have large administrative expenses. Organizations such as Charity Navigator track nonprofit effectiveness and outcomes, which can help determine your giving strategy.

Consider any tax implications. With recent changes in tax law, more people don’t benefit from tax deductions given the higher standard deduction. Instead, arrange giving to get around apparent limitations. This can include strategies, such as “bunching” giving planned over several years into a single tax year; making gifts during a specific, high-income year; donating appreciated securities to avoid tax liability, or tangible assets to avoid estate tax liability; giving directly from IRAs instead of realizing taxable income, which essentially becomes a tax deduction; or buying a life insurance policy and naming a charity as beneficiary, which also allows you to “leverage” the premiums for an ultimate higher payout.

Consider “planned giving.” This is generally associated with gifts that will become effective upon death. But it can also be about giving becoming part of a financial plan during a donor’s lifetime. It takes into account not just income, but various kinds of property and use of financial instruments and charitable structures.

For upper income individuals, such strategies can involve specialized structures, including donor-advised funds, family foundations, or other ways of avoiding not only income taxes but gift and estate taxes. Anyone can make planned gifts of accumulated savings or valuable property.

The Private Wealth Service Group at Tripp Scott can sit down with you and examine strategies to help maximize the impact of your giving in this life and beyond, while also helping you ensure a secure financial future for your family.

Christine P. Yates | Director with Tripp Scott
Yates leads the firm’s Private Wealth Service group. She brings over 24 years of experience guiding her clients through the full spectrum of estate transfer issues. From small administrations to estates in excess of $1 billion, she counsels clients on estate, gift and generation-skipping planning, trust and estate administration and fiduciary litigation.

For more than 50 years, Tripp Scott has played a leadership role in issues that impact business.

Learn more at TrippScott.com.

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