As the year winds down, clients often look to their advisors for ways to achieve their annual financial goals. Charitable giving is often part of these conversations with clients, especially when it comes to securing a tax deduction, supporting a nonprofit’s year-end fundraising campaign, or simply wishing to make a positive impact in the community.
With new tax law changes on the horizon, the remainder of the year presents a unique opportunity for clients to maximize current charitable deduction benefits while supporting causes they care about.
If your clients are interested in making a difference with their philanthropy before year-end, here are a few suggestions:
1. Utilize Donor-Advised Funds to Maximize Philanthropy
Donor-advised funds allow clients to contribute assets for an immediate tax deduction and then make grants to 501(c)(3) public charities on their own timeline. The fund’s assets can be invested and may even stay under your management, growing tax-free, and in turn can create a greater philanthropic impact.
Pro tip: Learn about the differences between establishing a private foundation and a donor-advised fund.
2. Consider Contributing Appreciated Assets
While cash gifts are a great place to start, donations of appreciated assets, such as stocks, often provide additional benefits, including avoiding long-term capital gains tax. Our comparison table of gifts of cash versus appreciated assets is a great resource to learn about the benefits.
Pro tip: Review year-end contribution deadlines here.
3. Boost Tax Benefits with the Bunching Strategy
Clients can use a donor-advised fund to “bunch” several years of charitable contributions into one tax year. By combining two or more years of gifts in a single year, they can exceed the standard deduction and receive greater tax benefits. Then, clients can continue making consistent grants to their favorite causes, even in years when they take the standard deduction.
Pro tip: Download and save this one-pager about bunching to share with clients.
In my role as Business Development Advisor, my goal is to make charitable giving as seamless and efficient as possible for advisors and their clients. I’m here to connect our teams so we can create the best possible philanthropic experience together.
Ready to help your clients make an impact this year-end and beyond? Let’s work together to make it easy for them to achieve their goals. Contact us at info@growyourgiving.org or 816.842.0944 with any questions.
Authored by: Annie Burndrett, Business Development Advisor
The Community Foundation does not provide tax, legal or accounting advice. This is for informational purposes only.