Smarter Giving: How to Make the Most of Your Year-End Donations

Written By: Daniel Rivet, CFP®

As the year winds down, many of us start thinking about giving back. It’s a natural time to support causes we care about. With a little planning, you can make your generosity go further.

Recently, my colleague Brady Martin shared a great piece on Charitable Giving with a Tax Advantage: Using Your IRA for Good. I wanted to build on that idea and highlight a few ways to make your giving both meaningful and tax-efficient this season.

1. Donate appreciated investments

If you have stocks or funds that have grown in value, consider donating those shares directly instead of selling them first. You’ll avoid capital gains tax and still get the full deduction for the gift. More for the charity, less for the IRS.

2. Consider a Donor-Advised Fund (DAF)

A DAF lets you make one large contribution this year, take the full deduction now, and then decide over time which charities to support. It’s a great tool if you want to “bunch” your giving for tax purposes or simplify recordkeeping. You can fund this DAF with appreciated investments as mentioned above. Consider funding the DAF in year of higher expected taxes to get the most out of your deduction.

3. Use your IRA for good

As Brady explained, if you’re 70½ or older, you can give directly from your IRA through a Qualified Charitable Distribution (QCD). The money goes straight to the charity, counts toward your Required Minimum Distribution, and avoids being taxed as income.

4. Make it part of your bigger plan

Charitable giving isn’t just about this year’s tax return but rather a reflection of your values and a chance to build a legacy and impacting causes that are important to you and your family. Whether you’re supporting local causes, your alma mater, or a donor-advised fund your family manages together, the most effective plan is one that connects your heart and your finances.

The bottom line

Year-end giving can be both generous and strategic. If you’d like to review your options or explore which approach makes the most sense for your situation, we’re here to help you make the most of it.