October 29, 2019

10 Tips for Successful Year-End Giving

David Koehler

As the community’s foundation, we are privileged to play a role in the extraordinary generosity of our neighbors − particularly at year’s end. To be most effective, here are a few tips to keep in mind as you plan and direct your year-end giving.

1. Talk to your advisors. Before making any significant gifts to charity, consult with your CPA, attorney or other advisors to learn about tax-wise giving strategies for your unique financial situation.

2. Consider giving appreciated stock. If you have stocks that are worth more than you paid for them (and you’ve owned them for a least one year), consider giving them to charity – you’ll avoid capital gains tax and receive a charitable deduction for the full market value of your asset. You can deduct up to 30% of your adjusted gross income for these gifts, and can carry forward the remainder of their value for up to five tax years.

3. Double down for greater tax savings. Last year’s tax law changes (limiting deductions for state and local taxes to $10,000 and increasing standard deductions in 2019 to $12,200 for individuals and $24,400 for couples) mean that more tax payers will be able to take the standard deduction rather than itemizing. Ask your tax advisor whether doubling up your charitable donations into one tax year and itemizing will help you save considerably on taxes. Read A “Bunch” of Tax Planning Ideas for a simple illustration and additional details on this smart strategy for giving.

4. Make a gift from your Individual Retirement Account (IRA). If you are 70.5 or older, you are eligible to transfer up to $100,000 from your IRA directly to charity. This qualified charitable distribution counts toward your required minimum distribution and reduces your taxable income, effectively giving you the standard deduction plus the charitable deduction!

5. Give now, decide later. If you would like to take a charitable tax deduction this year and distribute gifts to charities over multiple years, consider opening a donor-advised fund with MCF. Donor-advised funds work great with the “double down” strategy outlined in #3.

6. Complete your giving on time. To qualify for a 2019 tax deduction:

  • Mailed gifts must be postmarked by December 31, although the check can be cashed in the following year.
  • Gifts made via credit card gifts must appear on your statement as having been made on or before December 31.
  • Start early: Stock, mutual fund and real estate gifts, and qualified charitable distributions from your IRA are more complex and may require several weeks to complete.

7. Make a distribution from your fund. If you already have a donor-advised fund with MCF and want to ensure your approved distributions reach charities before the end of the year, please submit your recommendations to MCF by December 15.

8. Plan your giving. Working with a philanthropic advisor at MCF gives you access to our deep knowledge of the local nonprofit community and opportunities to make a difference throughout our region. We can also help you think strategically about how you give to which organizations. This ensures that your gifts make the greatest impacts for the causes you care about while maximizing tax savings. 

Bonus tip: Consult MCF’s Greater Madison Nonprofit Directory for a comprehensive guide to charitable organizations in our region. Sort by cause; learn about an organization’s financial health, programs, operations and impact.

9. Looking for the perfect gift? Consider a gift in honor of a loved one while making an impact for our community in an area that is important to you or your gift recipient! Learn about Donor Opportunities to Strengthen the Madison Area.  

10. Smile! Shopping for holiday gifts online this year? Your holiday giving can support Madison Community Foundation through Amazon Smile. Make a difference while you shop!

Need assistance? Give us a call! We’re here to help you or your clients achieve your philanthropic goals.