Do you give wisely?

August 24, 2016

Wise giving takes more than applying the concepts of effective altruism. Maximizing your ability to give takes a deep understanding of the tools and strategies of top philanthropist. Let the experts at PIF help guide your year-end giving with a free assessment. 

Effective Altruism helps to answer the "Where?" and "Why?" questions for donors...but it does not address the "How?". Did you know that donating cash or writing a check to charity can be one of the least efficient ways to give? Donors have the ability to structure their giving more wisely to maximize their charitable deductions and further leverage their ability to give simply by being more intentional about how they give:

  • Gifting Appreciated Assets instead of cash allows you to avoid paying capital gains on the asset that you are giving. This strategy can save you 15-20% on the cost of your gift. It can also be a great way to get a step-up in cost basis on an asset - a common practice for donors gifting appreciated stock. 
  • The IRA Charitable Rollover is now a permanent law that allows taxpayers that are over 70 1/2 to transfer up to $100k per year from their IRA accounts directly to charity without having to recognize the distribution as income. Avoiding the income taxes that would otherwise be due as a result of the mandatory distribution from an IRA can create significant tax savings!
  • "Front-Loading" Your Giving can be a great strategy for high-income earners that plan to retire in the next 5-10 years. By uses a tool such as a Donor Advised Fund, donors "front-load" the giving that they plan to do during their retirement years. Doing so allows the donor to take advantage of the charitable deductions during years when taxable income is higher. The donations now in the donor advised fund can be invested so that they have the opportunity to grow over time. 
  • Charitable Bequests give donors a way to continue their impact even after they pass away. Unfortunately many donors simply name a charity in their last will and testament and do not do any additional planning. Strategies such as Pooled Income Funds, Charitable Pooled Trusts, or Donor Advised Funds can be used to plan for end-of-life giving while the donor is still living so that he/she can benefit from the tax deductions that come as a result of his/her generosity. 

These strategies are just the tip of the iceberg for savvy donors. To determine which combination of strategies you can use to increase your impact this year complete our Year-End Giving Assessment survey by clicking the link below. 

Free Year-End Giving Assessment 

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