During the holidays, many of us feel inspired to give to the causes we care about. While writing a check is a classic way to make a difference, there are plenty of other impactful ways to support charities. These nine strategies not only offer creative ways to contribute but can also have financial benefits for the giver.
1. Explore Donor-Advised Funds (DAFs)
A donor-advised fund lets you contribute cash, securities, or other assets, receive an immediate tax deduction, and decide later which charities you want to support. It’s an easy way to plan your giving while maximizing tax benefits.
DAFs can make it easier to “stack” donations. By combining several years’ worth of contributions into one tax year, you might exceed the standard deduction and qualify to itemize your charitable gifts.
2. Consider Qualified Charitable Distributions (QCDs)
If you’re 70½ or older, you can donate directly from your IRA to a charity through a qualified charitable distribution. This approach allows you to meet required minimum distributions (RMDs) while lowering your taxable income. It can be a win-win for you and the causes you care about.
3. Use Tax Loss Harvesting to Fund Giving
If you have investments that have lost value, selling them can reduce your taxable income by offsetting gains elsewhere in your portfolio or directly reducing overall taxable income.
You can then use the proceeds to donate to a charity and potentially claim a tax deduction if you itemize. This can be a great way to turn a financial loss into a positive impact.
4. Donate Appreciated Assets
Donating appreciated securities like stocks or mutual funds can be a tax-smart way to give. By gifting these assets directly to a charity, you can avoid capital gains taxes and potentially deduct the full fair market value of the donation. It can be an efficient way to maximize your impact.
5. Give Your Time and Talents
Charitable giving doesn’t have to involve money. Many nonprofits rely on volunteers to help with programs, events, or expertise. Whether it’s mentoring, serving meals, or sharing your skills, your time can be a valuable gift.
6. Leave a Legacy with Charitable Bequests
Consider including a nonprofit organization in your will or trust to create a lasting impact. You can leave a specific amount, asset, or percentage of your estate to a charity so that your values live on for years to come.
7. Take Advantage of Matching Gifts
Your contributions could go further if your employer offers a matching gift program. Many companies will match the donations their employees make, doubling—or even tripling—the impact of your gift. Be sure to check with your HR department to see if this is an option for you.
8. Give Through Everyday Activities
Programs like AmazonSmile or credit cards that donate a portion of each purchase to charity are simple ways to contribute while going about your daily life. While small, these contributions can add up over time.
9. Host a Fundraising Event
If you enjoy organizing, consider hosting a fundraiser to benefit your favorite cause. From bake sales to virtual charity runs, these events raise both money and awareness for nonprofits while bringing people together for a good cause.
The Christmas season is a perfect time to reflect on how we can give back, but generosity doesn’t have to be limited to December. By incorporating some of these strategies into your giving routine, you can make a meaningful impact all year long. And if you’re looking for ways to align your giving with your financial goals, consulting with a financial advisor can be a helpful step.
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