“You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.”
-2 Corinthians 9:11
Ways to Help Maximize Tax Benefits While Making a Lasting Impact Through Planned Giving
When most people think of charitable giving, they imagine writing a check or donating to a fundraiser. While those gifts are valuable, there’s a lesser-known way to give that can make a far bigger impact—for both the donor and the organization: planned giving.
Planned giving is a powerful tool that lets you support the causes you care about while also unlocking substantial tax advantages. With savvy planning, you can help reduce your tax burden, increase your income, and leave a meaningful legacy.
Let’s break down how it works—and how it can benefit you. Planned giving refers to charitable donations that are arranged now but fulfilled either over time or upon your death. These gifts can include cash, appreciated stock, real estate, retirement assets, or even life insurance. What sets them apart is that they’re designed to fit within your larger financial or estate plans.
Giving generously doesn’t mean giving blindly. With planned giving, you can help:
- Claim immediate income tax deductions
- Avoid capital gains taxes on appreciated assets
- Reduce estate and inheritance taxes
- Satisfy required minimum distributions from IRAs tax-free
Here are some of the most effective and flexible planned giving methods:
1. Charitable Remainder Trust (CRT)
Donate an appreciated asset like stock or property to a CRT, receive a tax deduction, and enjoy lifetime income from the trust. After your death, the remaining assets go to the charity.
2. Donor-Advised Fund (DAF)
Get an immediate tax deduction, then recommend grants to your favorite nonprofits over time. It’s like having your own mini foundation without the administrative hassle.
3. Qualified Charitable Distribution (QCD)
If you’re 70½ or older, you can direct up to $100,000 annually from your IRA to a charity—tax-free—and count it toward your required minimum distribution (RMD).
4. Gifting Appreciated Stock
Instead of selling stock and paying capital gains tax, gift it directly to a charity. You’ll receive a deduction for the fair market value and avoid taxes on the gains.
5. Bequests and Estate Gifts
Leave assets to a charity in your will or trust. This helps reduce estate taxes and can ensure your legacy lives on.
Real-Life Applications
- Landowners: Contribute conservation easements or remainder interests for current deductions.
- Business Owners: Use trusts or DAFs to help avoid capital gains during the sale of a business.
- Families: Use life insurance or retirement accounts to help maximize charitable impact without reducing family inheritances.
- Everyday Investors: Turn stock market growth into charitable impact while increasing retirement income.
While the benefits are real, so is the complexity. Planned giving often involves legal and tax nuances, so it’s crucial to:
- Work with a tax advisor or estate attorney
- Align giving with your overall financial goals
- Understand the tax limits and carryover rules (e.g., how much of your AGI is deductible)
Planned giving is where generosity meets strategy. It allows you to do more good—for the world and for your own financial well-being.
Whether you’re a retiree with appreciated stock, a landowner thinking about conservation, or simply someone who wants to make a difference, planned giving opens the door to tax-savvy philanthropy that endures.
Giving is evidence of God living inside us. When we are generous, we trust that God will provide. As he is loving, let us be loving. God has a heart for the poor and speaks about it throughout the Bible. Jesus, the savior of the world, was born in a manger. He humbled himself out of heavenly glory, just as we ought to. Being the servant to all that he calls us to be can mean serving financial needs of a community, organization, or person.
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