Charitable giving has always been an important part of my financial plan and life. At Duncan Williams Asset Management, we believe in our mission: "Serve Our Clients | Improve Our Community." That's why I'm always looking for ways to support causes that matter to me while being wise about my finances. With some planning, I can maximize my donations, reduce my tax bill, and make an even more significant impact. This not only benefits the community but also brings a sense of personal growth and fulfillment.
If you're like me and want to maximize your charitable contributions in 2024, here are a few key strategies that can help.
Strategic giving: Quality Over Quantity
One of the biggest mistakes I used to make was writing checks to charities without thinking about how to structure my donations. Giving was giving, but it turns out that how you give can make a huge difference.
For instance, instead of donating cash, I now prefer to donate stocks or other assets that have increased in value. Why? When I donate appreciated assets, I don’t have to pay capital gains taxes on the increase in value. That means I can give more to charity and get a more significant tax break. It’s a win-win.
Another approach I’ve found helpful is bundling my donations. Instead of spreading my contributions evenly yearly, I sometimes combine multiple years’ worth of giving into a single tax year. This helps me clear the threshold for itemizing deductions and allows me to maximize my tax benefits in a way that wouldn’t be possible if I spread the donations.
Using a Donor-Advised Fund
Consider looking into a donor-advised fund (DAF) to be strategic with your giving. It’s a great way to separate the timing of your tax deduction from when you distribute the money to charities.
Here’s how it works: I can contribute to a DAF today and get an immediate tax deduction, even if I don’t decide where the money goes immediately. The funds can even be invested and grow tax-free while I select charities to support. It’s handy when I have higher-than-normal income and want to offset my tax liability.
Giving from My Retirement Accounts
I haven’t hit the required age yet, but I’ve been watching Qualified Charitable Distributions (QCDs) from IRAs. Once I turn 70½, I can donate directly from my IRA to a charity without paying taxes on the withdrawal. For retirees who have to take Required Minimum Distributions (RMDs), this is a great way to support causes you care about while lowering your taxable income.
Making Sure I Get My Tax Deduction
One lesson I learned the hard way is that the IRS has strict rules for deducting charitable contributions. Just giving money isn’t enough—you have to keep records. For cash donations, I always get a written acknowledgment from the charity. For non-cash contributions (like stocks or real estate), I work with my financial advisor to ensure everything is documented correctly.
If you plan to make significant charitable contributions this year, it’s worth checking with a tax professional to ensure you’re following the latest IRS guidelines.
Final Thoughts
Charitable giving isn’t just about generosity—it’s about being intentional. By thinking through my strategy, I’ve given more, saved on taxes, and made a more significant impact. Whether donating appreciated assets, using a donor-advised fund, or planning for future tax years, there are plenty of ways to make giving work smarter for me and the causes I care about.
SEC Disclosure
This blog post is for informational purposes only and should not be considered tax, legal, or financial advice. Please consult a tax professional or financial advisor to determine the best strategy for your situation. Investing in securities involves risks, and past performance is not indicative of future results. Duncan Williams Asset Management does not provide tax or legal advice. For official IRS guidance, visit www.irs.gov.
This material is not intended to serve as personalized tax, legal and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Duncan Williams Asset Management is not a legal or accounting firm. Please consult with your legal or tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.
Sources
· RS Tax-Exempt Organization Search Tool: https://apps.irs.gov/app/eos/
· IRS Official Website: https://www.irs.gov/
David Scully
David Scully has over 20 years of experience in investment research and team management. As President, he oversees the company’s daily operations and implements its strategic objectives. David holds the Chartered Financial Analyst (CFA®) and Certified Financial Planner (CFP®) designation. A graduate of the University of Georgia with a bachelor’s degree in economics, David is a proud Memphis native deeply committed to his community. He actively contributes to numerous organizations, holding leadership positions such as: • President, Board of Directors, Wolf River Conservancy • President, Board of Directors, Memphis Botanic Garden • Treasurer, Board of Directors, Assisi Foundation • Vice President, Board of Directors, Economic Club of Memphis • Member, Boards of Directors, University of Memphis Foundation, St. Agnes Academy, and CBHS Alumni Board David also serves on the Greater Memphis Chamber of Commerce’s Chairman’s Circle and Small Business Council. Previously, he was Treasurer for the University of Memphis Research Foundation Board and remains an engaged Young Presidents’ Organization (YPO) member. Beyond his professional and civic endeavors, David values his role as a husband to Michelle and father to their two daughters, Ruthie and Mae Carter. He is an enthusiastic coach who supports his daughters in basketball, soccer, and softball. Faith and family are central to David’s life, and the Scully family are active members of St. Peter Church.
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