Good Financial Reads: Charitable Giving Round-Up (Part Two)

At Charis Legacy Partners, our charitable legacy planning involves creating a comprehensive financial plan that includes thoughtful strategies for taxes, estate planning, investment management, and cash flow, but we also try not to overlook the obvious. While there are a plethora of potential strategies to help you increase your charitable giving impact, there are also a few simple and efficient opportunities, perhaps none more so than employer charitable matching programs.

We don’t usually think of managing gifts for tax purposes, but as you begin thinking about how you want to share your wealth it becomes very important.

There are two types of gifts I’m thinking about here, charity and the gifts to your heirs.

If a charitable legacy is a financial priority, you may think the best way to maximize your charitable giving is to simply increase your donations, but a charitable planning mindset takes the long view. This mindset is all about maximizing your charitable giving return on investment (ROI). In some instances, this may mean increasing your charitable donations, but in others it may mean cutting back on your charitable donations to prioritize paying off debt, bunching your donations, taking advantage of employer charitable matching programs, etc.

I’ve previously written about the potential benefits of donating appreciated securities instead of cash (you can claim a charitable tax deduction while also avoiding owing capital gains tax on the securities you donate), but there’s more than one way to donate securities. While most charities have brokerage accounts into which they can receive gifts of appreciated securities, another option is a donor advised fund (DAF).

Since we file taxes annually, we often think about our finances in annual terms – our income, our deductions, our charitable giving, etc. The problem is that if we completely silo individual years, we miss out on potential strategies to limit our tax burden, especially when it comes to charitable giving. One such strategy is charitable bunching.