5 Tips for Year-End Charitable Giving

​​​This is one of the most important times of year for charitable fundraising. Nearly a third of all donations are made during the month of December. There’s nothing like a deadline to motivate you, and the end of the tax year often provides a good nudge to make a donation!

With that in mind, here are some tips when considering your year-end charitable giving.

​Do you own appreciated stocks?

Share some of that wealth with your favorite charity while managing risk within your portfolio. If you have one or two stocks that have done especially well over the years, they may now represent a larger proportion of your portfolio than is prudent. Selling the stocks could entail a large capital gains tax. However, gifting some shares to charity may help you avoid the tax while also reducing the holding to something more reasonable—plus, you get the added benefit of a tax deduction.

Are you retiring soon?

Consider using a Donor-Advised Fund (DAF) to pre-fund your future charitable gifts before you stop working and your taxable income goes down. A DAF is like a charitable savings account that you contribute to now to maximize the tax advantage. You can then make gifts from the fund for years into the future. This allows you to offset your current taxable income prior to retiring, when you may have less taxable income and be in a lower tax bracket. This can also be a useful way to offset a spike in your taxable income if you’ve had a business or residence sale, a bonus payment, an exercise of stock options or a Roth conversion.

Have you reached age 70½?

​​​Uncle Sam now stipulates that you must take required minimum distributions (RMDs) from your retirement account, which flows through your tax return as ordinary income. However, recent tax law changes have made permanent the ability to gift up to $100,000 from your IRA to charity, including the amount needed to satisfy the RMD, as long as you are at least 70 ½ years of age. This is called a Qualified Charitable Distribution (QCD). Doing so allows you to exclude the distribution from your income on your federal tax return. Depending on your situation, this may help preserve some of your deductions, which otherwise are subject to phase-out rules, reduce income-based Medicare premiums or limit the impact of the Alternative Minimum Tax (AMT).

Want help budgeting for your charitable giving?

​​​​​Many of us want to give more but struggle to fit it into our budget—especially after the flurry of holiday spending toward the end of the year. Check to see if your favorite charity has a monthly giving program. This can allow you to spread your gift out over the year and maybe even give more as a result. These programs are set up as an autopay from your credit card or checking account, making it easy to do and giving you the good feeling that comes from being charitable throughout the year!

​Don’t procrastinate much longer

Some of these strategies can take time to plan out and process, so don’t leave it too long. You don’t want to wait until the end of December only to find that you’ve run out of time.

​​​There are numerous variables and rules to consider when determining the best method for making charitable gifts that are beyond the scope of this article. ​​Check with your Corient Wealth Advisor and tax accountant to discuss the pros and cons of these giving strategies and decide on the best solution for you. 


James Sonneborn, CFP, CFA, MBA

James Sonneborn, CFP, CFA, MBA

Partner, Wealth Advisor

Jim has over 35 years of experience managing investment portfolios and providing financial advice to individuals, families and charitable organizations in the New York metropolitan region.

As a Wealth Advisor and Co-Chair of the Firm's Neighborhood Nonprofits Group, Jim works with a wide range of clients and has a particular specialty in philanthropic strategies. For donors, Jim works to construct strategies that align with the client's philanthropic goals. In the nonprofit sector, Jim focuses on helping organizations strengthen their financial position through endowment management and planned giving consulting. Jim currently serves on the boards of The Rippel Foundation and the Environmental Endowment of NJ.

Jim holds a BA in Business from Western Colorado University and an MBA in Finance from Drexel University, as well as the CERTIFIED FINANCIAL PLANNER, Chartered Financial Analyst and Certified Divorce Financial Analyst certifications.


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