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Looking to make a difference on Giving Tuesday? Learn how to maximize your donations with these charitable giving strategies.
What is Giving Tuesday?
Giving Tuesday is a global generosity movement that takes place on the Tuesday after Thanksgiving. Established in 2012, this initiative encourages individuals and organizations to come together and support charitable causes and make a positive impact in their communities.
The idea behind Giving Tuesday is to shift the focus from consumerism and commercialism that often surrounds the holiday season, and instead, encourage people to give back and help those in need. It serves as a reminder to be generous and compassionate, and to support causes that align with our values and beliefs.
At Blue Bell Private Wealth Management, we are proud to be actively involved with numerous nonprofits across the United States. We strongly believe in the importance of community support and giving back to those in need. Looking to make the most of your donations on Giving Tuesday? In this blog post, we’ll explore strategies to increase your philanthropic impact while also reducing your tax liability. By implementing these tips, you can make a difference in the causes you care about while maximizing the benefits for yourself. Let’s dive in and discover how you can make the most of your generosity this Giving Tuesday.
Specific Giving Strategies to Maximize the Impact of Your Donations
When it comes to making donations on Giving Tuesday, there are specific giving strategies that can help you maximize the impact of your contributions. Two such strategies are Qualified Charitable Distributions (QCDs) and Appreciated Stock Donations. Let’s take a closer look at each of these strategies and how they can benefit both you and the charitable organizations you support.
Appreciated Stock Donations
Another effective giving strategy is donating appreciated stock. If you own stocks or other securities that have increased in value since you acquired them, donating them directly to a charitable organization can be a tax-efficient way to give.
When you donate appreciated stock, you not only receive a charitable deduction for the full market value of the stock, but you also avoid paying capital gains tax on the appreciation. This means that you can potentially give more to the charity of your choice while reducing your tax liability.
To make an appreciated stock donation, give us a call and we can determine if it makes sense for your situation and then assist in facilitating transfer. It’s important to keep in mind that there are specific rules and requirements for this type of donation, so seeking professional tax advice is advisable.
Qualified Charitable Distributions (QCDs) – Individuals over 70-1/2
A Qualified Charitable Distribution (QCD) is a direct transfer of funds from your Individual Retirement Account (IRA) to a qualified charitable organization. This strategy is particularly advantageous for individuals who are 70 ½ years old or older and have a traditional IRA.
By making a QCD, you can satisfy your Required Minimum Distribution (RMD) for the year while also supporting a cause you care about. The amount transferred as a QCD is excluded from your taxable income, which can provide significant tax benefits. It’s important to note that there are certain rules and limitations associated with QCDs, so consulting with the advisors at Blue Bell Private Wealth Management is important.
Pennsylvania Educational Improvement Tax Credit (EITC) Program
One effective strategy to maximize the impact of your donations on Giving Tuesday is to consider making a donation through the Pennsylvania Educational Improvement Tax Credit (EITC) program.
The EITC program allows businesses and Individuals in Pennsylvania to receive tax credits in exchange for donations to eligible educational organizations. These organizations include scholarship organizations, educational improvement organizations, and pre-kindergarten scholarship organizations.
By donating through the EITC program, you not only support educational initiatives but also receive a tax credit that can significantly reduce your state tax liability. For every dollar you donate through the program, the cost to you as a donor is only 10 cents, “turning Dimes into Dollars.” This means that your donation has a multiplied effect, allowing you to make a more significant contribution to the causes you care about without affecting your overall financial situation. The 90% tax credit may require a two-year commitment.
Other Giving Strategies to Consider
In addition to QCDs and appreciated stock donations, there are other giving strategies that can help you maximize the impact of your donations. These include donor-advised funds, charitable gift annuities, and charitable remainder trusts. Each of these strategies has its own unique benefits and considerations, so it’s important to explore them further and determine which one aligns with your goals and financial situation.
Conclusion
By utilizing specific giving strategies like Qualified Charitable Distributions (QCDs) and Appreciated Stock Donations, along with exploring other options such as donor-advised funds and charitable gift annuities, you can make the most of your donations on this Global Day of Giving. These strategies not only allow you to support causes you care about, but they also provide potential tax benefits. Remember to consult with a financial advisor from Blue Bell Private Wealth Management for further information and to ensure that these strategies align with your individual circumstances and fundraising goals.
So, mark your calendars and get ready to participate in the global movement on Giving Tuesday. Together, we can make a difference, bring awareness and inspire others to do the same.
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