Charitable giving provides donors with joy, peace of mind, and satisfaction in knowing you are making a difference in the world around you. Giving also provides ancillary financial benefits. Using particular assets and charitable vehicles can provide you with a double win—or two ways a donor can benefit from a single gift.
The following are three double-win incentives to inspire you to maximize your giving.
- GIVE STOCK
Stock holdings—especially those that have grown in value in your portfolio—are a great asset to give. By donating shares directly to a public charity, you avoid paying any capital gains taxes at the time they’re sold, and the charity will benefit from getting the full market value of the stock. You’ll also benefit by getting a deduction on the full market value. That’s a double win for your tax bill. Note: To reap this tax benefit, you must give the stock directly to charity. If the nonprofit can’t accept it, consider creating a donor-advised fund at a community foundation and then suggest grants from your fund. Learn more about how to give stock at The Trust.
- PUT IT ON A CARD
Giving to charity by credit card has become increasingly popular, and for good reason. Many people make automatic recurring contributions every month, which is easy for the donor, and gives nonprofits steady income. Your double win: you get to rack up points on your credit card, and get a deduction on the full amount of your gift before credit card fees. Give via your credit card.
- GIFT YOUR IRA DISTRIBUTION
If you are over 72 years old, giving some or all of your Required Minimum Distribution from your IRA directly to charity may provide you with multiple benefits to your tax bill. The IRS allows an individual to give up to $100,000 annually as a “Qualified Charitable Distribution,” which means that the funds can be distributed directly from your IRA to the qualifying public charity or charities, without having to be taken into your taxable income and then deducted as a charitable contribution. Donors love the ease of the vehicle and the tax headache it spares them, not to mention the actual tax savings that sometimes result. Not all kinds of charitable gifts qualify; notably, donor-advised funds are not eligible to receive Qualified Charitable Distributions. Instead, you can give to many public charities directly, support a fund at a community foundation—like our Community Needs Fund, which supports programs that address urgent challenges facing New Yorkers—or establish a field-of-interest fund to support a particular area that you care about. Note: As early as age 70 ½, you can give a Qualified Charitable Distribution from your IRA, even if you don’t yet have to give a Required Minimum Distribution. Learn more.
This content is for general informational purposes only and should not be construed as legal, accounting, or other professional advice.