5 Ways to Maximize Your Year-End Giving Strategy

Are you prepared for the upcoming giving season?

The holidays have arrived, and in order to minimize stress and maximize your gifting abilities, it’s important to keep in mind a few details that you may or may not be aware of. 

If you’re not sure how your finances match up with your upcoming year-end giving strategy, now is the time to prepare yourself by making your lists and checking them twice. Organization is key in order to properly give this holiday season. Follow the five tips below to maximize your charitable giving strategy this year.

1. Do Your Research

There are many resources to aid in your decision to gift. You probably already have an organization you feel closest to, such as your local church or a non-profit you support. There are also other online resources to consider. Two such sites are Guidestar or the Better Business Bureau’s Wise Giving Alliance. These online resources allow you the opportunity to learn more about the groups you’re interested in offering donations to. 

The organization you’re involved with should also be able to provide registration information, including 501(c)(3) status and tax identification number. You may also use the tax-exempt organization search tool available on the IRS website to obtain more specific information about the organization. 

2. Bundle Your Donations

As deductions have increased over the years, you may choose to save money over time and donate every few years as opposed to consecutively each year. By doing this, you may receive your itemized deductions over the limit one year and take the standard deduction the next. 

If you’re interested in accomplishing this, you might consider a donor-advised fund, which allows you to make a charitable donation and immediately receive a tax break. You’ll then receive recommended grants from the fund to your preferred charities over time. 

3. Donate Appreciated Stock

By donating stocks, mutual funds or other appreciated securities, you might reduce capital gains taxes on investments.¹ 

In particular, high-income earners might consider a non-cash donation specifically because of the tax advantages they may be awarded. Even those who have what they might consider to be small holdings could benefit by making a donation of appreciated investments.

4. Utilize Your IRA

If you’re a retiree over the age of 70½, you might consider transferring money from your IRA to a qualifying charity. These distributions can be a tax-efficient way of meeting any required minimum distribution. Additionally, there’s no need to itemize your deductions in order to benefit.  

You may distribute up to $100,000 per year, per taxpayer. This increases to an acceptable $200,000 for married couples if both have IRAs.² Although this strategy has existed for some time, it only recently became a part of the permanent tax code. 

5. Keep Tabs on Your Portfolio 

No matter the size of your seasonal contributions, it’s always important to keep up with your portfolio in order to give properly and confidently. Maintaining consistent communication with your advisor is key to determining the amount and frequency you should be giving to ensure your portfolio is doing it's primary job right - helping you achieve your financial goals. 

It’s important, at least annually, to re-evaluate your financial and personal priorities and update them if need be. Your interests and priorities are bound to change over time and so will the causes you choose to support. Being aware of these fluctuations is key, and maintaining a thoughtful and reflective attitude coincides perfectly with the holiday season. 

Spiritual Application

The Biblical principles of Giving and Stewardship are littered throughout the whole Bible and are foundational to our social, mental, and spiritual well-being as human beings. Thoughtful intentionality is what truly creates the best giving experience for both those that are giving and receiving. While the Bible is clear that the focus should be on the act of giving, not the gift itself, it is important to evaluate how we can best give. One of those choices is to decide how the gift can be utilized by those receiving it. 

Luke 14:28-29 states, "For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—  lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him." While the whole idea of gift giving is to give up something yourself for the benefit of someone else, we should be looking for opportunities to give that, while still providing the same value to the receiver, might actually cost us less. Why would we consider giving something of the same value that costs us less? Because, as givers, we have a desire to continue giving more - it's not only part of our nature, but it's also God's nature as we are created in his image. When we find ways to make our gifts go farther, we will continue to have a greater and more meaningful impact on everyone and everything we give to. 

Evergreen Financial Group is a Fee-Only Financial Planning and Investment Firm located in Billings, MT serving clients in Montana, Wyoming and virtually across the country. Evergreen Financial Group specializes in working with Christian families, including Young Professionals, Current and Future Retirees and Church Staff Members.