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Charitable Gifting Before Year-end

Charitable Gifting Before Year-end

November 15, 2023

November is the month of thanksgiving. It is a time when many of us pause to appreciate what we have and perhaps consider how we can share it. For those charitably inclined, this may be a time when the check book comes out.

We frequently advise clients who have been blessed with financial security to consider donating to charities through more tax advantaged ways, such as gifting highly appreciated securities. Clients often follow-up with, “Can I afford to give away my stock funds? Are you sure we have enough?” Quite often, the answer is an emphatic “Yes!”. We may suggest updating their financial plan to project how different levels of charitable giving will affect their financial security.

It seems we spend our lives saving, coupon-clipping, and buying on sale so that we might not worry about money later in life. The gnawing concern that we won’t have enough wealth is a mindset we tend to carry into retirement. Despite this apprehension, there are many reasons why charitable gifting while you are alive might be a sensible, and gratifying, strategy. By giving to your chosen charity firsthand you can experience, in real time, the impact your donation has made.

One strategy is to gift to a “Donor Advised Fund” like Fidelity Charitable. Charitable gifting this way allows you to make a single, large charitable donation and receive an immediate tax deduction while allowing you give the funds to various charities of your choice over time.

Simply put, you gift stocks, mutual funds, or ETFs with large capital gains into your charitable giving account. When you sell the asset, no tax will be paid on the gain, and you can deduct the full value of the gift off your tax return.

A win – win for you and the charity, while Uncle Sam looks on, empty handed.

Remember – We’re always here for you. Every season.

Please click here to learn more about Year-End Charitable Gifting.