With ever changing tax laws and unexpected life events, how one has given to charity in the past might not be the most tax efficient way to do so in the future. We have also discovered many people are charitably inclined and know what they want to do but don’t know how to do it. We have many years of experience working with non-profits and believe that we are charitable planning experts. Here are a handful of charitable tools and scenarios which we have assisted with in the past:

• Donor Advised Fund:
  • Client sold their small business and created a significant long term capital gain. They donated $250,000 to a Donor Advised Fund and ‘prepaid’ the next few decades of their charitable giving.
  • Client had a stock that had tripled over the past few years and wanted to sell. Rather than selling and paying the capital gains tax, client donated the stock to a Donor Advised Fund and sold it tax-free within the Fund. Client then reallocated the money and invested it for future tax-free growth for charitable giving.
  • Client was very charitable and wanted to pass those values onto her children after her death.  The client established a Donor Advised Fund for her children to inherit and it was funded by her pre-tax IRA at her passing (i.e. no income taxes were due on the IRA then). It promoted generosity with the kids and forced them to help others. The children supported their Mom’s favorite charities, their own and used the charitable funds to go on mission trips.
• Qualified Charitable Distribution
  • Client did not have enough deductions to itemize as a result he took the standard deduction every year. When he turned 70.5, he was forced to take a required minimum distribution from his pre-tax IRA. Rather than taking the distribution and paying the applicable ordinary income taxes on, he sent this amount to his favorite charities. By doing this, he was able to keep his Social Security from becoming taxable.
• 501(c)(3) Organization
  • Client was very keen on helping those unfortunate in third world countries. We worked with her by providing guidance on how to establish a new charitable organization and assisting with the reoccurring expectations required by the IRS.
  • Client wanted to start an educational legacy for his alma mater. We worked with the client to provide market research, tax implications and other investment-related considerations on starting a charitable foundation.

Disclosure: These examples do not constitute a recommendation and are for illustrative purposes only. Charitable donations may not be suitable for everyone and results may vary.