Donor advised funds can be another excellent way to optimize charitable giving. Early DAFs often had expenses around 1%, which felt a little high to me. I have been studying daffy.org as a potential vehicle for my DAF. Since this organization is a relatively recent addition to the options available, there is not a lot of history available, but their fee structure appears to be far superior to that of others. Comments from other readers with more experience or expertise than I have would be appreciated.
I use QCDs whenever possible. It reduces my RMDs and I find it more tax efficient because I can take the standard deduction as well. We give to our church, missions, other Christian organizations and local charities like food banks. We also give to Christian orphanages and other children’s charities.
Consider donating appreciated stock (or mutual fund shares), instead of cash. As I understand it, you avoid capital gains taxes on the imbedded profits of the holding, you get a potential tax deduction equal to the current market value of the gift, the charity gets a step-up in basis when it liquidates the donation, and, if you want to keep the investment, you can use the cash that you were going to give to the charity to buy the stock or mutual fund back with a current cost basis.
I agree with “bunching” and have been itemizing every other year. I also use a fidelity donor advised fund to allow me to trickle out monthly donations to my church (even during the “unbunched” year). I also contribute appreciated stock to the donor advised fund whenever possible. I have no real long term taxable gains to donate yet this year, but hopefully by December 😇
Most times I’m against writing a cheque but on occasion I do. I like to get involved and and roll up my sleeves with charities like Habitat for Humanity. I also participate in The Ride To Conquer Cancer and other similar charity events.
Good research on charitable organizations,not only those that benefit humans but animals as well. And giving to learning institutions. Need to give more thought to strategizing.
Interested on your thoughts on giving to a learning institution. I would never do that as I question how the money would be used and I view such institutions as inefficient spenders. Just my opinion.
I give to a trust fund at my local State College that is available to economically insecure students for emergency housing and food assistance, and is beyond the reach of the institutional spenders.
Be selective, understand the organization your support. Give only what you can truly afford. I know of people who struggle financially every day, but still give $330-$400 a month and they can’t afford to do that.
I’m increasingly leaning towards Qualified Charitable Distributions (QCDs), especially once you reach age 73 and can use them to reduce your Required Minimum Distribution (RMD) amounts. Jonathan’s recent article discusses: More Than Enough – HumbleDollar
For younger folks like me, bunching annual giving into a single year so that it sums to much more than the standard deduction is savvy. Also, making the donation with highly-appreciated shares is a double win (or using a donor-advised fund).
For older retirees, qualified charitable distributions are amazing for saving on taxes and maximizing your giving.
In the end, though, giving from your heart is never a bad move!
Donor advised funds can be another excellent way to optimize charitable giving. Early DAFs often had expenses around 1%, which felt a little high to me. I have been studying daffy.org as a potential vehicle for my DAF. Since this organization is a relatively recent addition to the options available, there is not a lot of history available, but their fee structure appears to be far superior to that of others. Comments from other readers with more experience or expertise than I have would be appreciated.
I use QCDs whenever possible. It reduces my RMDs and I find it more tax efficient because I can take the standard deduction as well. We give to our church, missions, other Christian organizations and local charities like food banks. We also give to Christian orphanages and other children’s charities.
Consider donating appreciated stock (or mutual fund shares), instead of cash. As I understand it, you avoid capital gains taxes on the imbedded profits of the holding, you get a potential tax deduction equal to the current market value of the gift, the charity gets a step-up in basis when it liquidates the donation, and, if you want to keep the investment, you can use the cash that you were going to give to the charity to buy the stock or mutual fund back with a current cost basis.
Has anyone utilized a Charitable Gift Annuity? If so, what was your experience?
Check out Kathleen Rehl’s recent article:
https://humbledollar.com/2023/02/better-than-cake/
Bunching years of giving into a donor advised fund. Then give freely from there.
I agree with “bunching” and have been itemizing every other year. I also use a fidelity donor advised fund to allow me to trickle out monthly donations to my church (even during the “unbunched” year). I also contribute appreciated stock to the donor advised fund whenever possible. I have no real long term taxable gains to donate yet this year, but hopefully by December 😇
Most times I’m against writing a cheque but on occasion I do. I like to get involved and and roll up my sleeves with charities like Habitat for Humanity. I also participate in The Ride To Conquer Cancer and other similar charity events.
Good research on charitable organizations,not only those that benefit humans but animals as well. And giving to learning institutions. Need to give more thought to strategizing.
Interested on your thoughts on giving to a learning institution. I would never do that as I question how the money would be used and I view such institutions as inefficient spenders. Just my opinion.
I give to a trust fund at my local State College that is available to economically insecure students for emergency housing and food assistance, and is beyond the reach of the institutional spenders.
Be selective, understand the organization your support. Give only what you can truly afford. I know of people who struggle financially every day, but still give $330-$400 a month and they can’t afford to do that.
Use a QCD if possible.
I’m increasingly leaning towards Qualified Charitable Distributions (QCDs), especially once you reach age 73 and can use them to reduce your Required Minimum Distribution (RMD) amounts. Jonathan’s recent article discusses: More Than Enough – HumbleDollar
For younger folks like me, bunching annual giving into a single year so that it sums to much more than the standard deduction is savvy. Also, making the donation with highly-appreciated shares is a double win (or using a donor-advised fund).
For older retirees, qualified charitable distributions are amazing for saving on taxes and maximizing your giving.
In the end, though, giving from your heart is never a bad move!