Strategic Giving 101: Going Beyond Cash

Why do you give?

Take a moment to think about the organization or cause closest to your heart. The one that truly inspires you when you see its work in action. For many people, charitable giving is deeply personal. It’s an expression of values, faith, family priorities, and a desire to leave the world better than we found it.

But impactful giving isn’t just about generosity, it’s also about strategy.

With the right planning, you can give more to the causes you care about while being thoughtful about taxes, cash flow, and your long-term financial plan. Below, we’ll explore smart charitable-giving strategies that can help you move from being a generous donor to a strategic philanthropist.

Strategic Giving 101: Going Beyond Cash

Cash donations are common—and meaningful—but they’re often the least tax-efficient way to give. Fortunately, there are several tools that can help you stretch your charitable dollars further.

1. Give Appreciated Stock Instead of Cash

If you own stock that has increased significantly in value, selling it can trigger capital gains tax—up to 20% federally, not including state taxes. Even if you donate the proceeds, you still owe the tax.

A better approach? Donate the stock directly to a charity or a Donor Advised Fund (DAF).

The double benefit:

• You avoid paying capital gains tax on the appreciation.
• You receive a charitable deduction for the full fair market value of the stock.

For many donors, this is one of the most tax-efficient ways to give.

2. Use a Donor Advised Fund (DAF) to Simplify and Supercharge Giving

A Donor Advised Fund is essentially a personal charitable giving account managed by a public charity (such as a community foundation or a national sponsor).

How it works:

• You make an irrevocable contribution to your DAF and receive an immediate tax deduction.
• The funds are invested and grow tax-free.
• You recommend grants to qualified charities over time.

This flexibility makes DAFs an excellent tool for thoughtful, long-term giving.

The Power of Charitable “Bunching”

Since the standard deduction increased in 2017, nearly 90% of taxpayers no longer itemize—meaning many charitable gifts provide no tax benefit at all.

This is where a DAF becomes especially powerful.

Instead of donating $5,000 every year for five years, you could:

• Contribute $25,000 in one year to a DAF.
• Itemize deductions in that year and claim a significant tax benefit.
• Continue making annual grants from the DAF over the next several years.

Your favorite charities still receive consistent support, and you gain a tax deduction you might otherwise miss.

DAFs vs. Private Foundations: A Simpler Legacy Option

Families who want to build a charitable legacy often assume they need a private foundation. While foundations offer control, they also bring high costs, complexity, and administrative burdens.

A Donor Advised Fund offers a simpler alternative:

• No legal setup or annual tax filings
• Higher deduction limits
• No mandatory annual distribution requirement
• Easy succession planning by naming children or grandchildren as successor advisors

By funding a DAF with appreciated assets today, families can create a tax-efficient, multi-generational charitable legacy—without the headaches of running a foundation.

3. Qualified Charitable Distributions (QCDs) for Retirees

If you are age 70½ or older, a Qualified Charitable Distribution (QCD) can be one of the most powerful tools available.

How it works:

• You can transfer up to $105,000 per year directly from your IRA to a qualified public charity.
• The distribution is excluded from your taxable income.
• If you are age 73 or older, the QCD counts toward your Required Minimum Distribution (RMD).

Unlike a deduction, this income never shows up on your tax return—potentially reducing taxes on Social Security, Medicare premiums, and more.

Important note: QCDs must go directly to operating charities. They cannot be used to fund a Donor Advised Fund or private foundation.

Legacy Giving: Making an Impact Beyond Your Lifetime

Charitable giving doesn’t end during your lifetime—it can play a powerful role in your estate plan.

1. Include Charity in Your Will or Trust

You can name a charity or your Donor Advised Fund to receive a specific dollar amount or percentage of your estate. This is one of the simplest ways to leave a lasting legacy.

2. Use Retirement Accounts for Charitable Bequests

Retirement accounts like IRAs and 401(k)s are often the most tax-burdened assets for heirs, who must pay income tax on distributions.

Charities, however, receive these assets tax-free.

By naming a charity as the beneficiary of retirement accounts, you:

• Eliminate income taxes on those assets
• Maximize the charitable impact
• Leave more tax-efficient assets (like brokerage accounts or cash) to your family

3. Consider Other Assets

Life insurance policies, real estate, or other non-cash assets can also be excellent tools for charitable bequests—often without affecting your current lifestyle.

Next Steps: Turning Generosity Into Strategy

To make the most of your charitable giving, consider these action items:

1. Review your assets. Are you giving cash when appreciated stock might be a better option?
2. Talk to your advisor. If you’re over 70½, ask about Qualified Charitable Distributions.
3. Think long-term. Are your most tax-efficient assets going to your family, and your most tax-burdened assets going to the causes you love?

Charitable giving is one of the most meaningful ways to reflect your values. With thoughtful planning, you can increase your impact—without increasing the amount you give.

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