‘Tis the Season for Giving

This time of year is often referred to as the giving season and for the right reason: Americans tend to give more in the last quarter of the year than any other. According to the Nonprofit Research Collaborative, over half of the nonprofit organizations surveyed reported that they received over a quarter of their contributions between October and December, with 16 percent of all organizations receiving over half their year’s total contributions during those same months. These results may be due to the Holidays in combination with year-end tax planning. While some may already make giving a regular part of their lives, others may not have considered it. We find that many have an interest in charitable giving but are not sure where to start. This is where the development of a charitable mission statement can help serve as a guide map for your giving.

The following are some steps to consider when formulating a giving mission statement:

Think about what motivates you to be charitable:

  • What life experiences have molded you?
  • What are your core values?
  • Are there any wrongs in the world that you would like to make right?

What particular cause might you want to be your focal point?

  • What specific problems would you like to help fix?
  • Do you want to focus domestically, internationally or both?

Craft your mission statement:
Once your charitable mission statement is mapped out, the selection of the vehicle you will use to facilitate your charitable giving becomes much easier, not to mention the potential tax benefits that can follow.

Let’s review some of the ways in which you can give:

  • Qualified charitable distribution: If you are over age 70 ½ consider a qualified charitable distribution which allows you to donate up to $100,000 in a single tax year directly to a charity of your choice from your IRA. A qualified charitable distribution is completely excluded from taxable income.
  • Donate appreciated assets: directly to charity which can eliminate the unrealized capital gain tax.
  • Lump charitable gifts in a single tax year: Assuming your itemized deductions do not exceed the new standard deduction, consider lumping your charitable contributions in single tax years for the ability to be able to itemize your deductions.
  • Donor-advised fund: A donor-advised fund can help you receive the tax benefits for your charitable contribution today, but allow you more control over the timing of your gifts.
  • Charitable remainder or lead trust(s): Allow for tax benefits today while still retaining some interest from the assets for you or your family today or upon passing.

Brief Review of Potential Tax Benefits

Charitable contributions are deductible assuming you can itemize your deductions, but there are limitations against your adjusted gross income (AGI):

Feel free to contact your Planning Alternatives advisor to discuss your charitable mission statement or review your charitable planning goals. Consult with your tax professional regarding specific tax benefits for your particular situation.


Julie Hall, CFP®, MSF
Director of Financial Planning