December is filled with travel, events and other to-dos, so year-end giving tips can help you rise above the chaos and keep the joy of giving alive.
Some people have professionals advising on tax planning matters, while others tackle all the technical details themselves. No matter how you approach year-end giving and tax planning, the details and techniques below will come in handy. They can help you plan last-minute giving accordingly or help guide your conversations with an attorney, accountant or financial advisor.
We’re also standing by to help you with your charitable giving in the weeks ahead and beyond. Just make sure to keep our end-of-year deadlines in mind, which are detailed below. But first, let’s get to those time-saving, year-end giving tips and reminders.
Year-End Giving Tips and Strategies
Tax-smart giving always starts by looking at the standard deduction. The 2023 standard deduction for single taxpayers ($13,850) and married filing jointly ($27,700) is up nearly 7% over 2022. While this increase allows for more relief from income tax for most filers, it also sets a higher bar to exceed for those who itemize deductions. Keep your household’s standard deduction amount in mind when you tally your deductible expenditures, including your gifts to charity. We recommend that you reach out to your tax advisor for help.
Year-End Giving Tip #1
Ditch itemization and adopt a “bunching” strategy.
You may benefit from “bunching” or pre-funding your giving with a Donor Advised Fund if you have a particularly high income this year and your total deductions are at or under the standard deduction amount for 2023. This giving strategy reduces your 2023 taxes by combining multiple years of donations into one current-year gift that surpasses the standard deduction threshold. Then, you can support your favorite organizations with a grant from your fund at any time, whether this year or next.
If you don’t already have a Donor Advised Fund, we can establish new fund in one meeting, so reach out to set up a time. Keep in mind that depending on the assets you’re contributing, the deadline for giving may vary. Refer to our end-of-year giving schedule below for specific deadlines on different assets.
Year-End Giving Tip #2
Remember, you can use stock shares as a gift.
As you dive into year-end giving, don’t automatically reach for the checkbook! Contributions of long-term appreciated stock to a Donor Advised Fund or other funds at the Community Foundation are one of the most financially savvy ways to give. You avoid taxes on any capital gains, which allows you to provide more support to your favorite causes.
Please consult your tax advisor because there are some deduction limits to stock donations depending on your income and situation. To realize these tax benefits in the current year, donors must initiate mutual fund and stock gifts by Thursday, December 20.
Year-End Giving Tip #3
Take advantage of a QCD from your IRA.
Don’t let the acronyms scare you off. The Qualified Charitable Distribution (“QCD”) is a very smart way to support charitable causes. If you are over the age of 70 ½, you can direct up to $100,000 from your IRA to charity, which includes open funds at the Community Foundation such as our General Scholarship Fund or Community Giving Fund. Donor Advised funds are not eligible to receive QDCs.
If you’re subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs. That means you avoid income tax on the funds distributed to charity. Our team can work with you and your advisors to go over the rules for QCDs and evaluate whether the QCD is a good fit for you. To take advantage of this opportunity funds must leave your IRA before the RMD deadline. You should begin the process now to ensure the gift is received this year.
Year-End Giving Deadlines
Our team is here to help! Please reach out to the Community Foundation if you or your advisor have questions about the strategies above or details about when certain transactions must occur to be legally completed during this tax year.
For instance, gifts of marketable securities need to be fully transferred by December 31, so please work with your advisors to contact us in plenty of time for our team to process and receive the transfer. Here is an overview of other common forms of year-end giving and their related deadlines for 2023.
| Gift Type | Initiate Date | Details |
|---|---|---|
| IRA Rollover | December 27* | Gift up to $100,000 to charity. Funds must leave IRA before RMD deadline. |
| Public Securities | December 20 | Donating appreciated securities reduces exposure to capital gains. Call us at (360) 694-2550 for details. |
| Wire Transfer | December 27 | Often used for larger cash gifts. Call us at (360) 694-2550 for specific instructions. |
| Check or Cash | December 31 | Must be postmarked by December 31. Gifts can be made online until midnight. |
*NOTE: Please contact your advisor or custodian to inquire about processing deadlines, which may vary by institution.
Planning for Giving in 2024
While giving is top of mind this month, the new year also brings an opportunity to plan. So here is an unconventional year-end giving tip: incorporate philanthropic giving into your 2024 resolutions. Do you need to start or finish your estate planning? Or maybe you’ve been missing out on some of the strategies listed above? We are always here to help.
The Community Foundation partners with donors in ways that amplify community impact. We bring the knowledge and expertise to help you weave new ideas, best practices, and data-driven approaches into your giving.
If you don’t have a favorite local charity, our team can be especially helpful. We work side by side with a long list of local nonprofits and community-based organizations that align with your passions. So, connect with us today, and let’s design a strategic and personal giving plan for the new year.