We’re officially in the holiday season, when many of us start focusing on ending the year with family, friends, and celebration. With #GivingTuesday around the corner, you may also want to start building your giving strategy, so you’re not scrambling at the end of the year and potentially missing out on tax benefits.
Supporting Your Values
All charitable giving dropped 10.5% in 2022 compared to 2021 when adjusted for inflation. And even more starkly, individual giving dropped by 13.4%.[i]
We’ve rarely seen such a dramatic decrease in giving in the last few decades, and many non-profits are struggling to maintain services with reduced funding. Perhaps more distressingly, in 2022, individual giving as a proportion of income hit 1.7%, the lowest in almost 20 years.[ii]
Building a Giving Strategy
Now is a great time to consider the causes and values you most deeply care about and set aside time or resources to support their efforts.
If you’re overwhelmed by the breadth and depth of need, here are a few key questions to consider to help you decide where and how to allocate your giving.
Would you rather make a direct impact in your community, or would you prefer to give in a highly distressed region?
Funding can often stretch further and make an outsized impact in developing countries or other highly stressed areas. But if you’d like to see your impact and feel more directly connected to the work, giving locally may be a great choice.
Is there a particular issue that you’re passionate about?
Health, nutrition, education, gender equality? There’s a charity for almost every cause; picking one and centering your giving on that cause can help streamline your giving process.
Immediate vs. Long-Term Need
Do you want to provide immediate and critical assistance or help cultivate long-term change? For instance, when a disaster strikes, people require immediate and essential resources and support. Giving to specific disaster relief can feel very tangible and is often life-saving.
Or you may be interested in giving to charities that work with communities and individuals in systemic poverty or difficulty, like providing financial education for women or job re-skilling. Pledging a gift to an organization that does this kind of work can have a long-term impact.
Whether you want to ensure distressed communities have access nutritious foods or a local youth sports program can keep engaging kids, there are plenty of opportunities to give back in your community or around the word.
How to Give to Maximize Your Benefit and Impact
Once you’ve decided where and to whom you want to give, the next step is to determine how. There are many ways to give that maximize your impact alongside your tax and financial situation, below we’ve outlined a few ways that could work for you.
If you’d like to pursue one of the gifts below or any other, we encourage you to get personalized advice from a qualified financial planner who can help you understand your specific tax situation and needs.
Donor Advised Funds
A Donor Advised Fund (DAF) is a giving account you establish with a third party. You can add to the account as it suits you, typically receiving an immediate tax benefit from it, and you can make grants through the DAF to eligible entities over time.
DAFs are an increasingly popular way to give cash and non-cash assets like stocks, bonds, and mutual funds. In fact, over the last decade, DAF grants have grown over 400%.[iii]
Individuals, families, or even corporations can create DAFs, but it is important to note that they differ from private foundations. You can continue charitable giving through either, but they are subject to different tax laws and administrative regulations around to whom they can give.
Qualified Charitable Distributions
If you’re over 70.5, you could consider giving directly from your IRA to a qualifying non-profit. The funds withdrawn from an IRA to give to a charity typically are not counted towards your taxable income, which can give you a break.
Charitable Gift Annuities
It is possible to receive income from a gift with a charitable gift annuity (CGA). Larger non-profits, like universities, may accept CGAs, which can benefit both of you.
Simply put, you would make a gift, which the non-profit sets aside and invests. You receive a fixed payout for the rest of your life, and at the end of your life, the non-profit keeps the remainder of the gift.
As with any type of giving, you should work with a qualified financial advisor to structure a gift that makes the most sense for your values and financial situation.
Giving Time and Expertise
One of the most straightforward and often rewarding ways to give is with your time. If you have expertise that could be valuable to charities or those in need, you may be able to volunteer your specific knowledge.
Otherwise, you could sign up to serve food, wrap or distribute presents, or even sit with the elderly or infirm during a difficult time of year. If you’re looking for opportunities, resources like VolunteerMatch can help.
Whether you’re giving your time or money, you can make an incredible difference for others, set an example for your family, friends, and colleagues, and feel more connected to your community.
By taking a little time now to work with a qualified tax professional and decide on your giving strategy, you can maximize your potential tax benefits and make an impact where it matters most to you.
DISCLOSURE: The information above is educational in nature and should not serve as the primary basis for your investment or tax planning. Reynders, McVeigh Capital Management, LLC (“RMCM”) does not provide legal or tax advice. Please consult an attorney or tax professional regarding your specific situation. This material is proprietary and may not be reproduced or transmitted to any third party without the prior, written consent of RMCM.
By clicking on hyperlinks, you are leaving the RMCM website and entering a third-party site. RMCM is not responsible for information contained on the third-party sites.
[i] Amy Silver O’Leary and Tim Delaney, “It’s Real: Charitable Giving Plummeted Last Year,” National Council of Nonprofits, June 21, 2023,
[ii] Steve Biever, “Giving USA 2023 Report Insights,” BWF, June 20, 2023.
[iii] “The 2022 DAF Report,” National Philanthropic Trust, https://www.nptrust.org/reports/daf-report/#:~:text=Number%20of%20DAF%20Accounts%20Approaches,to%202020%20is%2020.1%20percent.