TBH Advisors | Three Reasons to Consider Charitable Giving at Year-End

Three Reasons to Consider Charitable Giving at Year-End

By Travis Anderson, Managing Member at TBH Advisors

Philanthropy is a personal choice and reflection of your values and goals. As we begin December, it’s a critical time to consider charitable contributions. In fact, 30% of all annual giving happens this month. At TBH Advisors, we view the end of the year as a great opportunity for individuals to align their financial planning with their philanthropic aspirations. Here are three reasons to consider charitable giving as the year draws to a close.

The Impact of Charitable Giving: 

At TBH Advisors, our role is to ensure that your philanthropic goals are thoughtfully woven into your financial planning. With that said, charitable giving is not a one-size-fits-all endeavor. Each individual has unique giving preferences—some choose to donate annually, while others target specific causes or projects. Whether it’s supporting an organization that works to eliminate homelessness, an animal welfare cause, or funding a long-term project such as building a new school, your contributions can make a significant difference.

Before making a donation, it’s important to vet and confirm it’s a reputable and legitimate 503(c) organization. You can reference websites like GuideStar or the IRS website to confirm a charity can receive tax-deductible contributions.


Charitable Giving Tax Benefits: 

The tax benefits of charitable giving are particularly impactful at year-end. It’s not the only reason to give, but if you’re charitably inclined you can reap tax benefits. And moving beyond traditional cash gifts can amplify the impact of your contributions. Donating highly-appreciated assets like stocks can increase the value of the gift while avoiding capital gains taxes. Here are a few tax-efficient vehicles to consider:

  • Donor Advised Fund (DAF): DAFs can distribute funds to charities over time, enabling thoughtful, long-term giving. This strategy can be beneficial for offsetting higher income years, as it helps to avoid capital gains taxes on appreciated assets.
  • Trusts: Ideal for those with specific, long-term philanthropic visions, this strategy is particularly effective for less liquid assets and can play a crucial role in legacy planning involving larger donations, such as an endowment.
  • Qualified Charitable Distribution (QCD) from an IRA: For those aged 70½ or older, donating directly from an IRA to a charity can satisfy your required minimum distribution (RMD) for the year, while the donated amount is excluded from your taxable income. This strategy is particularly beneficial at year-end, as it can lower your taxable income and reduce the tax impact of your RMD.

At TBH Advisors, we are adept at navigating legislative changes and can help proactively tailor your charitable giving strategy to optimize both your philanthropic impact and tax efficiency in anticipation of changes in tax laws, such as capital gains tax adjustments.


Creating a Legacy Through Charitable Giving: 

Philanthropy can be an integral part of your legacy, reflecting your life’s values and commitments. We work closely with clients to ensure their charitable giving aligns with their broader estate planning goals. This can be done by implementing some of the tax-efficient strategies previously mentioned, such as a trust. In order to ensure your desires are met beyond your living years, you can include your specific philanthropic goals in your will.

Charitable giving at the end of the year can make a positive impact in a way that aligns with your financial goals and personal values. Whether it’s leveraging tax-efficient strategies or crafting a lasting legacy, TBH Advisors is here to guide you every step of the way.

Are you looking to integrate your philanthropic goals into a tailored financial plan? Contact TBH Advisors to discuss how we can help optimize your end-of-year giving in a way that resonates with your personal and financial aspirations.

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