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Four Tips for Year-End Giving By Nakia Lipscomb

Four Tips for Year-End Giving

By Nakia Lipscomb, Senior Director, Development


Nakia Lipscomb

With the holidays just around the corner, now is a great time to talk to your clients about year-end giving and how you can help them maximize their tax savings for 2023. These four tips will help you help your clients fulfill their charitable goals now and throughout the year.

1. Donate appreciated stock. One of the most efficient and advantageous ways to fund donor-advised funds is by donating long-term appreciated securities when the market is high. By donating the stock directly to a fund at The Dayton Foundation rather than selling it and contributing the after-tax proceeds, your clients can avoid paying capital gains tax on the appreciated value while setting aside dollars for future gifts to their favorite charities. The Dayton Foundation offers several charitable fund options that can accept these gifts.

2. “Bunch” donations. To help your charitably inclined clients get over the tax deduction threshold, you may want to recommend that they bunch their charitable donations to their Dayton Foundation fund. With bunching, your clients can combine multiple years of their typical annual gifts into a single tax year and itemize their deductions, thus allowing them to receive a larger deduction in the year when it’s most needed. In the other years, they can switch to the standard deduction. An advantage to bunching is that your clients receive the tax benefit in the year when they make their contribution, but they can choose to distribute these funds to charities over multiple years.

3. Maximize giving through a traditional IRA. For clients who are age 70 ½ or older, there are benefits to making charitable gifts from IRA assets. Although the required minimum distribution (RMD) age has been delayed to age 73, the qualified charitable distribution (QCD) age remains at 70 ½. Clients who meet the RMD age requirement are eligible to make a tax-free charitable gift of up to $100,000 from IRA assets ($200,000 for married couples with separate IRAs) directly to a qualified charity through The Dayton Foundation. Clients who aren’t yet eligible to take an RMD, they may not be aware that their QCD can count towards the satisfaction of their IRAs’ RMD. This will not generate federal income taxes because the QCD is not recognized as income, thus making it a great tax-savings approach. One thing to keep in mind when leveraging IRA assets for year-end giving is that donor-advised funds and Charitable Checking Accountsâ„  do not qualify for a QCD. However, The Dayton Foundation offers a variety of fund options to support charities through IRAs.

4. Be in the “know” with a Charitable Checking Account. We encourage you to be in the "know" about this free service, which is a great solution for all your clients’ charitable giving needs. Whether gifting appreciated stock to avoid capital gains taxes when the market is high or "bunching" charitable donations to earn a tax break in one year while distributing the assets over multiple years, your clients can use their accounts to give online to the charities of their choice, locally and around the world. Accounts can be opened in a matter of minutes, which is a great option for those clients who wait until the last minute to contact you about year-end giving. Plus, the service is free. No minimum deposit or balance is required!

The end of the year can be terribly busy for everyone. Please know that we are here to help at no cost to you or your clients. For more information about year-end giving options available through The Dayton Foundation, contact me or Michelle Lovely at (937) 222-0410.