The end of the year is a time to reflect on the past and make positive changes moving forward. It’s also a time when many generous Americans think about giving back to the causes they care most about.
But amid the holiday season's crunch, many donors fail to make a thoughtful plan for their philanthropy. They may see a cause their friends and family are supporting and quickly volunteer to open their wallets — and though any act of generosity is commendable, donors can make the impact of their charitable giving go further by being strategic in their approach.
If you’re considering giving back this holiday season, here are five tips to help you maximize your gift's impact and ensure that you’re taking every advantage available to you.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Align giving with your core values
It might seem tempting to give to the latest cause du jour, but ask yourself: Does the organization you’re giving to comport with your core values? Sometimes, organizations most visible during high-profile tragedies have a broader mission at odds with your deeply held beliefs. Or the organization might have taken some stances you’re unaware of and would otherwise be uncomfortable with.
Before you decide to give, list the causes you’re most passionate about and the values that must accompany your giving.
2. Evaluate the charity
In the United States, there are 1.97 million nonprofit organizations. With so many options, donors must do their due diligence to ensure they give to highly reputable organizations that effectively serve their causes, not enrich their leadership or serve as a PR platform. Consider consulting a resource like Charity Navigator, which rates organizations on a scale of one to four across various metrics, such as finance and leadership. You can also use it to connect you to the best charities aligned with your core values.
3. Consider making a recurring donation
Charities can better use your dollars when they know they have a recurring source of revenue. Consider making a monthly or multi-year donation, which is important for nonprofits looking to fund capital campaigns or other significant endeavors.
4. Maximize tax benefits
We all know it’s better to give than receive, but who wouldn’t want the bonus of writing off some of your tax liability? For 2024, the maximum cash contribution you can deduct is 60% of your gross adjusted income (AGI) and 30% of AGI for appreciated non-cash assets, for taxpayers who itemize deductions on Schedule A.
High earners can consider additional strategies, such as creating a charitable remainder unitrust (CRUT) or charitable remainder annuity trust (CRAT), either of which allows an individual to receive a tax deduction now for future donations of assets contributed to a charity via an irrevocable trust while also generating income for their own use, or by starting a donor-advised fund (DAF), allowing a tax filer to write off donations into the DAF while doling out grants at their convenience later on, which might enable a larger deduction in one tax year.
5. Give back in other ways
Though every charity requires funding, donating your time can help strengthen your commitment to a cause. In addition to writing a check, consider other potential ways to give back. Do you have a skill that might be of use to the organization? Pairing financial giving with volunteering is also a good way to create relationships that can further your future business and philanthropic endeavors. I’ve known many people, who after starting as a regular volunteer, began to become more involved in the organization, rising to the level of a board member — roles that have had a profoundly positive impact on their lives.
Philanthropy is personal. Everyone has a different reason for giving to a particular charity. Sometimes, they give to a nonprofit focused on issues that have impacted their lives or those of their loved ones. Other times, though, they may not have a personal connection, they see a problem in their communities and are inspired to make a difference.
Whatever your reason, you can make your end-of-year gift go even further by taking a few simple steps:
- Identifying a reputable charity that aligns with your values
- Structuring the donation to best fit the needs of the organization
- And pairing your financial gift with something even more valuable — your time
With some planning and foresight, you can make the holiday season more cheerful for the causes nearest and dearest to your heart.
Related Content
- When Should Retirees Consider a Donor-Advised Fund?
- How to Make a Charitable Plan That Won't Break Your Bank
- How to Give to Charity and Also Generate Retirement Income
- We're Only Human, Which Can Be a Problem for Investors
- How to Donate Your Life Insurance Policy to Charity
-
Do You Need a Family Office? Four Signs for the Very WealthyYou may need a family office if you are a high-net-worth individual, because being wealthy turns a family into a family business.
-
Wealth Advisers: In Estate Planning, the End Is Just the BeginningWe need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
-
Wealth Advisers: In Estate Planning, the End Is Just the Beginning
We need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
-
Stood Up by a Radio Show: But Was It a Breach of Contract?A conscientious financial planner reschedules his clients after being invited onto a talk show and ends up losing one of them at a cost of $5,000. What does the radio show owe him, if anything?
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears EbbConstructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
Over 50 and Still Paying Student Loans? Here's Some HelpIt's the club no one wants to join. But if you are over 50 and still paying student loans, there are ways to tackle both debt and retirement savings.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
