Charitable Giving Strategies

Americans have a long-standing tradition of giving generously by contributing their dollars to charitable causes annually. Beyond the philanthropic impact, these contributions can serve to support one’s core values, imparting a legacy for the generations to come, in addition to the potential tax benefits that they can offer.

For those seeking to extend their philanthropic reach beyond an occasional donation, a strategic approach to charitable giving is strongly encouraged. This would entail a detailed plan outlining the “how” and the “how much” of your charitable contributions.

Consider working with a financial professional that can help you define your objectives through a series of comprehensive discussions about your estate and legacy planning goals. They can work in conjunction with your attorney to facilitate a seamless process and ensure your charitable contributions align with what you value most.

Provided are some fundamental guidelines to consider if making a charitable giving strategy part of your financial plan:

Types of Contributions: While cash donations are common, financial gifts can extend to stocks, bonds, shares of a business, real estate, retirement accounts, and even life insurance. Tax deductions can vary based on what is gifted, how you file, and other factors.

Tax Considerations: Incorporating tax planning into a charitable giving strategy is essential. Donations to 501(c)(3) organizations are typically tax-deductible and can reduce the overall income tax liability. When structured correctly, strategic charitable contributions can help lower estate taxes. Be mindful of non-cash-assets due to their impact on capital gains taxes.

Methods of Giving: There are various ways to make charitable contributions. You may be able to make a charitable contribution directly from your IRA or time a gift to maximize the impact in a given tax year. Consult with a financial professional to help you make an informed decision about your money that aligns with your legacy planning goals.

At Financial Dynamics, our team can help you incorporate charitable giving into your overall financial strategy. By including philanthropy as part of your financial plan, you can make a difference in the causes that matter most to you, leaving a meaningful legacy that extends beyond your lifetime.

Advisory services offered through J.W. Cole Advisors, Inc. (“JWCA”). Financial Dynamics & Associates, Inc. and JWCA are unaffiliated entities.