Year End Giving!
As we enter the year-end giving season, we wanted to share some statistics about giving and some ways to make sure you are getting the maximum impact for your charitable contribution.
- Nearly 1/3rd (31%) of annual giving occurs in December
- 12% of all giving happens in the last three days of the year
- In 2018, 68% of total giving came from individuals
So in an effort to help you make the maximum impact, we wanted to outline some strategies for your giving efforts:
Make a plan: Gifting doesn’t have to wait until the last month of the year! Instead, be intentional and make a plan for your giving. Are there charities you would like to support more? Do you find yourself wanting to give more but can’t because you didn’t plan/budget to do so? Start a plan early for your charitable giving and you might be able to take advantage of the various strategies outlined below.
Donating appreciated stock: When you donate an appreciated stock or mutual fund to charity, it provides an extra tax benefit. As a donor, you are allowed to deduct the current value of the investment as a charitable contribution. Whereas you’d owe capital gain taxes if you sold the stock first and then contributed the proceeds.
Donor-Advised Fund: An individual can set up a Donor-Advised fund through many brokerage firms, mutual fund companies, and community foundations. The individual gets a tax deduction based on the date the money is donated to the fund. Once established, the donor can take their time (usually several years) deciding which charities to support, how much support, and how often.
Donate from your IRA Required Minimum Distributions (RMDs): If you are over 70 ½ , the IRS mandates that you take what is known as a Required Minimum Distribution (RMD) from your traditional IRA each year. These distributions are normally taxed to the recipient as ordinary income. However, the IRS now allows individuals to transfer up to $100,000 tax-free from your IRA to charity instead. That transfer contribution still counts towards your RMD but isn’t taxable to the individual.
Ultimately, a gift is a gift and the charity you’re supporting appreciates it all the same no matter how it’s made. But we realize that there are various tax benefits to your gifting and wanted to outline a few to think about as you consider making your gifts.
AUTHOR | Patrick Morgan
Donor Relations | 612.804.6666