Charitable Gifting Strategies for Giving Tuesday

November 28, 2023

Giving Tuesday has been established as an international day for charitable giving and occurs each year on the Tuesday following Thanksgiving. It’s a fitting time to consider your philanthropic goals and review or design a giving plan. For that reason, we’d like to take this opportunity to shine a light on philanthropy and the ways you can maximize your impact on causes and organizations that are important to you.

As your advisor, we can facilitate discussions that will help you define your giving goals and then build your plan, especially where there are techniques which involve your investment and financial planning. Our wealth management team is regularly on the lookout for new strategies and ideas to help guide in the creation and updating of impactful and tax-aware gifting plans.

There are two strategies that we feel are important to focus on and have summarized them below.

Maximize After-Tax Giving

  • Gift Appreciated Securities: Donors who gift appreciated securities versus cash receive the additional tax benefit of avoiding taxation on the capital appreciation. However, there are deductibility limits as a percentage of your adjusted-gross income that change depending on what type of donation you make. We can help you navigate these considerations as you make gifting decisions in each tax year.
  • Gift Private Assets: It might also make sense to prioritize the donation of complex, illiquid assets, which often also have low cost basis. Examples include private stock, alternatives, or real estate. Gifts of complex assets are governed by complex regulations, but we can help demystify the process.
  • Bunching of Charitable Gifts: Since the “Standard Deduction” amount increased several years ago, concentrating multiple years’ worth of gifts in a single tax year can maximize the after-tax benefits of giving.

Effective and Strategic Giving 

  • Private Foundation vs. Donor Advised Fund Account: One of the common questions we address is, “What is the best vehicle to achieve gifting goals: donor-advised funds or a private foundation?” The answer comes down to weighing the factors of privacy, ease of administration, cost, and control. As your advisor, we can help you learn more about these choices and lay out the differences to help you make an informed choice.
  • Qualified Charitable IRA Distributions: Once you reach age 70½, you can gift up to $100,000 per year directly from an IRA account to a charitable organization (or multiple organizations) without tax consequences. And these direct “qualified charitable distributions” help satisfy the minimum distribution amount you may be required to take each year. Even if you’ve already taken an IRA distribution this year, you may still be able to make charitable distributions from your IRA, and they may be more tax-advantageous than gifts from your other assets. We would be happy to review these options and tradeoffs with you.

For more details on some of the strategies outlined above as well as ideas on how to engage your next generation in philanthropic activities, please visit our charitable gift planning blog post written last year.

Note that all these tax and gifting techniques require careful forethought and planning, as every person’s tax situation is different. That’s why we feel it’s important to help you coordinate the discussion with us, as your advisor, as well as your tax professional. Our ultimate goal is to help you maximize your charitable impact while optimizing your tax situation.

Happy Giving Tuesday!

If you would like to discuss your charitable giving or tax–planning issues in more detail or have other year-end planning questions, please contact your advisor. 

Important Disclosure
These materials have been provided by Litman Gregory Wealth Management, LLC (“LGWM”) for informational purposes only. No statement herein is to be construed as a solicitation or recommendation to buy or sell a security. The information contained herein has been derived from sources that we believe to be reliable; however, we do not make any representation as to the accuracy, timeliness, suitability, completeness or relevance of any information. Information contained herein is current as of 11/2023. It is subject to legislative changes and is not intended to be legal or tax advice. Consult a qualified tax advisor regarding specific circumstances. This material is furnished ‘as is’ without warranty of any kind. Its accuracy and completeness are not guaranteed, and all warranties expressed or implied are hereby excluded.
For additional information about LGWM, please consult the firm’s Form ADV disclosure documents by contacting or through this link. 

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