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With the holidays quickly approaching, it’s naturally a time to reflect on the people and causes you care about most. While you may know whom or what you’d like to support, the question of how to give back can have a meaningful impact on the amount you’re able to donate as well as the benefits you realize in return.

With different gifting strategies to choose from, along with a host of other factors to consider, how do you know which approach is right for you?

In this article we discuss the basic tenets and key advantages of charitable giving strategies you may wish to consider this holiday season.

Where to Start?

Charitable giving comes in many shapes and sizes, so begin by asking yourself whom or what you wish to support. Search tools like Charity Navigator or the IRS’ Tax Exempt OrganizationSearch are great resources for researching charitable organizations across a variety of causes.

What are the Benefits of Charitable Giving?

Of course, the opportunity to pay it forward is the driving force behind most people’s decision to give back. Nonetheless, there are several other benefits to charitable giving that should not be overlooked.

1. Gifting can reduce your tax liabilities.

2. Gifting during your lifetime can aid in the proper distribution of your estate.

3. Gifting certain assets enables you to transfer the tax liability while maximizing the gift to charity.

Donor-advised Fund (DAF)

A donor-advised fund is a private investment account used to manage and facilitate charitable donations. DAFs are ideal due to their ease of administration and the control donors retain over the placement of their gifts. Contributions to donor-advised funds can be made in several forms:

1. Cash (min of $5,000)

2. Public stocks, bonds or mutual funds

3. Private stock

4. Money from your IRA and 401(k)

5. Life insurance

Contributions to DAFs are tax deductible in the same year the contribution is made. This provides donors an immediate tax benefit with the freedom to later decide how and where to place donations. This feature is particularly attractive if you require a large tax deduction to offset a portion of your taxable income for a particular year.

You can deduct up to 60% of adjusted gross income for cash contributions. Securities held for over a year may be deductible at 30% of AGI. (Securities held less than a year would only be allowed a deduction on the cost basis amount.)

Gift a Highly Appreciated Asset

Gifting an appreciable asset, such as public stock, is an increasingly popular strategy due to its unique tax benefits. There are two key benefits to this strategy:

1. When gifting an appreciable asset to a 501(c)(3)organization, you can claim a federal income tax deduction (up to the IRS limit) that is equal to the market value of the asset.

2. Any appreciation on the asset is not subject to capital gains tax if donated before selling, allowing you to donate more than you otherwise could with a cash donation.


Following the recent increase to the standard deduction—$12,950 fora single tax filer and$25,900 for married couples—many people lost the ability to claim a year-end charitable tax deduction.

Bunching is a gifting strategy that consolidates multiple years of giving into one tax year, allowing for a large taxable deduction in the year of giving and zero in the subsequent years.Because of this unique feature, bunching is an effective strategy for those looking to reclaim charitable tax benefits at year-end.

Combining a bunching strategy with a DAF also allows the donor to reap the donation when needed and later dole out contributions to charities in the years to come.

Private Foundation

A private foundation is an independent legal entity set up solely for charitable purposes, offering similar tax advantages to donor-advised funds but operating on a much larger scale.

There are more complexities and rules associated with a private foundation. For example, there is an IRC Code requiring private foundations to distribute 5% annually for charitable purposes.

Because of the larger scope of operations, private foundations provide families an attractive opportunity to give back to others while simultaneously reducing estate assets and, in-turn, estate taxes.

About Venturi:

Venturi Private Wealth is an independent fee-based wealth management firm for founders, entrepreneurs, corporate executives and wealthy families.

To discuss how you can optimize your charitable giving, schedule a free consultation with a Venturi advisor click here.

Disclosure: Venturi Wealth Management LLC is a registered investment adviser. Registration does not imply any level of skill or training. Additional information about Venturi and its investment adviser representatives is available on the SEC’s website at adviserinfo.sec.gov. As always, we invite you to visit our website at venturiwealth.com at any time to read more about the firm and the services we provide.


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