Tis’ The Season To Give Charitable Gifts


Face it at the end of the year for some reason we all feel a little happier. Most likely it is all the food we eat, but somehow in December we start thinking of others. Maybe it’s this holiday called Christmas … either way, here are some ideas for charitable giving:

Gift that high value stock

“But Nick I could never gift that away” gifting stock can be a great benefit not just for the intention, but the tax deduction and the use the charity gets out of it. For example if you have a stock worth $100 and you bought it for say $10. You could gift the stock to the charity who would then sell it and use the $100, while you were able to get a tax deduction for the $100. If you were to sell the stock and gift cash, you would actually owe taxes on the gain you had. This my readers is a great winning strategy for you and the charity. Most charities have a system set up to do this, even your local church.

Donor Advised Funds

Do you have trouble finding a charity to give to? Another way to make a charitable gift is to contribute money to a donor advised fund. Doing this, works like a charity, although you don’t get to control where the money goes. You gift money into a Donor advised fund throughout the year, then a committee decides how to gift the money out via grants or gifts to other charities. Donor advised funds are the poor man’s foundation. Although they may not get a lot of love, it may help to give annually to a Donor advised funds as a deduction.

Private Foundation

You really don’t have to have a lot of money, just a desire to create and sustain a foundation that will gift out money in whatever way it sees fit. Foundations take time and effort to run, just like a business. Once set up though, a foundation can enjoy the freedom of making the decisions from those in charge. The more involved version of a Donor Advised Fund.

Charitable Trust

By setting up a Charitable Lead Trust, or Charitable Remainder Trust you can set aside your estate to go partly to a charity and either revert back to you or to a beneficiary of your choice. This technique helps to get the assets out of your estate if you are looking to avoid the Estate taxes on a large estate. Even if you aren’t, by doing a Charitable Trust it helps out a specific charity of your choice via a long term commitment from you.

Outright Gifts

The best way though, is to just gift something. It doesn’t have to be flashy or special, anything will do. Gifting cash, check or maybe your time to help anyone in need. Even though you may not get a tax deduction you can get the joy of helping others.

One final thought … get everyone involved! It’s more than just giving. With a DAF or setting up a Foundation, you can involve your kids and have them help you to make decisions on where the money goes. What better way to get your family involved than by letting them choose where to gift the money! A multi generation foundation could be a lasting legacy when you are gone!

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