Charitable Giving
Jessica Dillon

Article by
Jessica Dillon, Foundations & Endowments Financial Advisor Triangle Financial Services, Inc.

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Tax Reform may have changed the landscape, but strategy still matters.

With the end of the year approaching, many of us are considering annual gifts to the charities that matter most in our lives.  Tax reform under the Tax Cuts and Jobs Act has changed the landscape of charitable giving and made the impact of our charitable gifts more unclear.

First and foremost, the biggest tax advantage for charitable giving remains unchanged ─ donations to IRS qualified charitable organizations remain deductible.  What may have changed is your need to deduct the gifts since there have been substantial increases in the Standard Deduction ─ from $12,700 to $24,000 for married couples and from $6,350 to $12,000 for single filers.  Additionally, many previously popular itemized deductions have been reduced or eliminated.

While giving comes from the heart, tax incentives remain an important consideration. Here are a few strategies to help maximize your giving power:

 IRA Qualified Charitable Distribution

Donors aged 70 ½ or older should donate directly from an IRA. This qualified charitable distribution is better than a deduction because the income is not reported and the gift counts toward the required minimum distribution. 

Charitable Clumping

“Clumping” involves bunching multiple years of charitable deductions into a single year. Clumping provides immediate tax benefits not received if the contributions were made annually over multiple years. Donors benefit from both the itemized charitable deduction in certain years and the higher standard deduction in alternate years.

Donor Advised Funds

A Donor Advised Funds (DAF) is a charitable investment account that allows a donor to receive a tax deduction in the same year the donation is made, while making contributions from the DAF to various charities of the client’s choice over a number of years. The charitable funds grow tax free, allowing growth for larger gifts to charities over the years.  

Gifts of Appreciated Assets

Giving appreciated stock that has been held for more than one year is better than giving cash.  With nearly a decade of market gains behind us, it is likely that you own stocks, ETFs or mutual funds with appreciated value.  If you itemize deductions, you can take a charitable deduction for the stock’s fair market value, which can be significantly higher than the amount paid, and you can avoid capital-gains taxes on the increase in value over time.

With recent tax reform, it is more important than ever to work with an advisor to ensure your financial and charitable planning are maximizing value.  Triangle Financial Services can help you create a multi-year giving strategy and ensure your gifts of money and assets are completed in the most effective way.

Information provided by Jessica Dillon, Financial Advisor, Triangle Financial Services, Inc.,, 515-371-8201, Advisory Services offered through Harbour Investments, Inc.