Purposeful Giving
Giving generously can be deeply rewarding, but it can also play a meaningful role in your overall financial plan. Explore how to align your charitable goals with smart tax strategies, from bunching deductions to using donor-advised funds, so your giving has a lasting impact on both your community and your own financial picture.
Whether you give annually, support a favorite charity, or plan larger gifts in retirement, understanding how the tax rules work can make your generosity go further.
Only contributions to qualified 501(c)(3) organizations are deductible. That includes many public charities, religious institutions, and certain private foundations. Keep detailed records - acknowledgment letters, receipts, or bank statements - especially for donations $250 and over, which require written confirmation from the organization.
If you contribute non-cash items (like clothing, furniture, or vehicles), make sure to note the fair market value and keep receipts if they exceed a total of $500.
After the 2017 tax law changes, many households no longer itemize deductions because the standard deduction increased substantially. For 2025, it’s $15,000 for single filers and $30,000 for married couples filing jointly.
If your total itemized deductions (including mortgage interest, medical expenses, and charitable gifts) don’t exceed that threshold, you may not see a direct tax benefit from charitable giving, unless you plan strategically.
One effective approach is bunching, combining multiple years’ worth of charitable gifts into a single tax year to push your deductions over the standard deduction limit.
For example, instead of donating $5,000 annually, you could contribute $15,000 this year and skip the next two. This may allow you to itemize in the year you give, and then take the standard deduction in the following years.
A donor-advised fund lets you make a large, tax-deductible donation in one year — even if you plan to distribute the funds to charities gradually over time. You can invest the balance for potential growth and decide later which organizations to support.
For those with fluctuating income (such as a business sale, bonus, or Required Minimum Distributions (RMDs) you don’t need for spending), a DAF can help manage both timing and impact.
If you’re age 70½ or older, you can donate up to $108,000 per year (2025 limit) directly from your IRA to qualified charities through a Qualified Charitable Distribution.
The QCD counts toward your required minimum distribution (RMD) but isn’t included in your taxable income, which can help lower your adjusted gross income and potentially reduce taxes on Social Security or Medicare premiums.
This can be an especially tax-efficient way to give during retirement.
Instead of selling investments and donating the proceeds, you can donate the appreciated securities directly to charity. You’ll typically avoid capital gains tax and may be able to deduct the fair market value of the asset, making it a double benefit for you and the organization.
This strategy often works well for stocks, mutual funds, or ETFs that have significantly appreciated in value and are held in a taxable account.
Charitable giving can change from year to year, especially if your income fluctuates or your philanthropic goals evolve. A quick annual review with your advisor or tax professional can ensure your giving strategy continues to align with your financial plan and maximize potential tax advantages.
At its core, charitable giving is about impact, on the lives you touch, and on your own sense of purpose. By pairing your generosity with thoughtful planning, you can make the most of each dollar you give and continue supporting the causes that reflect your values.
If you’d like to review how charitable giving fits into your broader financial plan, our team can help you explore the options that make the most sense for your situation.
Giving with Intention
Charitable giving is more than a line item on a tax return. It’s a reflection of personal values, family traditions, and the causes that matter most. Yet when generosity meets thoughtful planning, your donations can also help optimize your tax situation.Whether you give annually, support a favorite charity, or plan larger gifts in retirement, understanding how the tax rules work can make your generosity go further.
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Know What Qualifies for a Deduction
Only contributions to qualified 501(c)(3) organizations are deductible. That includes many public charities, religious institutions, and certain private foundations. Keep detailed records - acknowledgment letters, receipts, or bank statements - especially for donations $250 and over, which require written confirmation from the organization.
If you contribute non-cash items (like clothing, furniture, or vehicles), make sure to note the fair market value and keep receipts if they exceed a total of $500.
-
Understand the Standard Deduction Trade-Off
After the 2017 tax law changes, many households no longer itemize deductions because the standard deduction increased substantially. For 2025, it’s $15,000 for single filers and $30,000 for married couples filing jointly.
If your total itemized deductions (including mortgage interest, medical expenses, and charitable gifts) don’t exceed that threshold, you may not see a direct tax benefit from charitable giving, unless you plan strategically.
-
Bunch Donations to Maximize Itemizing
One effective approach is bunching, combining multiple years’ worth of charitable gifts into a single tax year to push your deductions over the standard deduction limit.
For example, instead of donating $5,000 annually, you could contribute $15,000 this year and skip the next two. This may allow you to itemize in the year you give, and then take the standard deduction in the following years.
-
Use a Donor-Advised Fund (DAF)
A donor-advised fund lets you make a large, tax-deductible donation in one year — even if you plan to distribute the funds to charities gradually over time. You can invest the balance for potential growth and decide later which organizations to support.
For those with fluctuating income (such as a business sale, bonus, or Required Minimum Distributions (RMDs) you don’t need for spending), a DAF can help manage both timing and impact.
-
Consider Qualified Charitable Distributions (QCDs)
If you’re age 70½ or older, you can donate up to $108,000 per year (2025 limit) directly from your IRA to qualified charities through a Qualified Charitable Distribution.
The QCD counts toward your required minimum distribution (RMD) but isn’t included in your taxable income, which can help lower your adjusted gross income and potentially reduce taxes on Social Security or Medicare premiums.
This can be an especially tax-efficient way to give during retirement.
-
Donating Appreciated Assets
Instead of selling investments and donating the proceeds, you can donate the appreciated securities directly to charity. You’ll typically avoid capital gains tax and may be able to deduct the fair market value of the asset, making it a double benefit for you and the organization.
This strategy often works well for stocks, mutual funds, or ETFs that have significantly appreciated in value and are held in a taxable account.
-
Keep Good Records and Review Annually
Charitable giving can change from year to year, especially if your income fluctuates or your philanthropic goals evolve. A quick annual review with your advisor or tax professional can ensure your giving strategy continues to align with your financial plan and maximize potential tax advantages.
A Thoughtful Balance of Heart and Strategy
At its core, charitable giving is about impact, on the lives you touch, and on your own sense of purpose. By pairing your generosity with thoughtful planning, you can make the most of each dollar you give and continue supporting the causes that reflect your values.
If you’d like to review how charitable giving fits into your broader financial plan, our team can help you explore the options that make the most sense for your situation.