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Firm Updates & Advisor Advice
November 30, 2021

Giving Tuesday Strategies

Aaron Evans, CFA
As you ponder philanthropy amidst your turkey, stuffing and possible awkward family interactions this November, here are a few tax-efficient giving strategies to consider.

Giving Tuesday’ is a wonderful tradition held the Tuesday after Thanksgiving since 2012. It was kick-started as an initiative of New York’s 92nd Street Y in partnership with the United Nations Foundation and is now recognized as a global day of action unleashing the power of generosity. At Strategic, the values that guide us are to Serve, Grow and Live. We believe in the power of collaboration and generosity to build a stronger community and help each other live a great life.

On this Giving Tuesday, we are grateful for the reminder that the gift of giving can come in many forms, whether it be the gift of your time, your resources, or financial – and remember that no donation is too small if it is serving each other and our community.

In this blog post, we want to serve our community with our expertise by sharing a few tax-efficient giving strategies to consider if you are making a financial contribution this Holiday season.

Appreciated Securities

Utilizing investments with long-term unrealized capital gains rather than cash is a popular tax-efficient way to give. A stock or fund donation can be claimed as an itemized deduction, with the added benefit of taxable gains being passed on to a non-taxable entity. The higher the gain, the greater the tax benefit. Check with your charitable organization on specifics regarding making a securities gift.

“Utilizing investments with long-term unrealized capital gains rather than cash is a popular tax-efficient way to give.”

– Aaron Evans, CFA, CFP®

Qualified Charitable Distributions (QCDs)

If you are over 72 and taking required minimum distributions (RMDs) from an IRA, you are eligible to utilize those RMDs to make tax-efficient charitable donations. These qualified charitable distributions (QCDs) can be made directly to not-for-profit organizations gross of any income tax liability, with the full amount being applied towards your annual RMD. This strategy is a great option to minimize income taxes while still maintaining full use of the higher standard tax deductions implemented in 2018. For more information on QCD’s, check out our blog post: Planning Your IRA Withdrawal Strategy: Qualified Charitable Distributions (QCD’s).

Donor-advised funds (DAF)

Donor-advised funds (DAF) are giving vehicles that provide donors with lots of flexibility. Appreciated securities or cash can be contributed to a DAF, allowing for a tax deduction in the year they are made. From there, donors can decide on amounts, timing, and the target charities for distributions over time. This is a great strategy to be employed in a year of high earnings or if you are uncertain about your current charitable intent. Additionally, this strategy may allow for an itemization of deductions above the new standard amounts by making larger donations to the DAF every few years, while still directing charitable gifts annually.

As always, we recommend working with your financial planning and tax professionals to guide your giving strategies.

About Strategic

Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on client assets of over $2 billion.



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