How to Create a Charitable Giving Strategy

By Steven M. Rogé, MBA, CFP®, AIF®
Managing Director & Chief Investment Officer

Did you know that 37.2 million Americans live in poverty according to the Census Bureau? That is roughly 11% of all citizens in this country, even though Americans gave over $471 billion to charities in 2020, up 5% from 2019. There are many ways to give back to society, but to make the most of your charitable giving you should have a plan in place. Outlined below are the issues to consider when establishing a charitable giving strategy.

At the core of any giving strategy is to identify what motivates you to give? There are six primary motives, including trust, altruism, social benefits, tax benefits, egoism, and constraints. We tend to experience a mix of these motivations that encourage charitable giving and volunteering.

Create a plan. Consider creating a written giving plan. This plan will help you stay on track, allowing you to create a more meaningful impact with the charitable gifts you make. A written giving plan also acts as a deterrent when responding to charitable solicitors. While their solicitation may be for a good cause, the framework laid out in your giving plan will prevent you from deviating from your primary goals and objectives.

Select an amount. One major component of any giving plan is to quantify how much you can afford to give. Any well laid plan won’t be worth the paper it is written on if you can’t execute it. If your income fluctuates from year-to-year, consider how this may impact your taxes and ability to make, or forego making, gifts in any one year. Consider your personal future cash flow needs as well.

Maximize your gift. Substantial gifts can be made to a charity using a charitable gift annuity. Appreciated stocks and other assets may be donated today in exchange for a fixed stream of income from the charity for your lifetime. Conversely, you may make a substantial gift to benefit a charity for a term of years, but ultimately retain the assets for yourself or your heirs. You can also gift appreciated securities held for more than one year and provide additional opportunities for charitable giving. Gifts in kind to a charity allow you to avoid recognition of capital gains while marking a gift of full market value to the security or asset as of the date of the gift. Deductions for gifts of appreciated property is generally limited to 30% or 20% of your adjusted gross income depending on the type of charity. If you have a traditional IRA and are over the age of 70.5 you may consider marking a Qualified Charitable Contribution (QCD) of up to $100,000 (per tax year), which would be excluded from taxable income. This QCD can count toward satisfying your Required Minimum Distribution (RMD).

Volunteer your expertise. If you have time or a skill that you can contribute toward a charitable activity, you be able to deduct unreimbursed expenses that you incur as a direct result of the services you perform. Be careful if you receive anything of value in exchange for your charitable services. You may need to deduct to the “gift” if it exceeds the full market value of the goods and services you received in return.

Consider a Donor Advised Fund. If you want to take an immediate charitable deduction this year but want to spread out the distributions to charities over time, consider creating a Donor Advised Fund (DAF). This fund allows you to make a gift and take an immediate charitable deduction while delaying delivery of the funds to the charities of your choosing. You can use your DAF to “bunch” several years of gifts in one tax year, taking advantage of the itemized charitable deduction when your gifts might have otherwise been covered by the standard deduction.

Regardless of how you decide to give back, developing a plan prior to making your first charitable gift is advisable. If you need a helpful checklist for establishing a charitable giving strategy, click here.

If you are interested in learning more about how to create and implement meaningful charitable strategies into your financial plan, please contact our team of knowledgeable CERTIFIED FINANCIAL PLANNERS™ (CFP®) at 631.218.0077 or We would be happy to go into further detail and answer any questions you may have.

R.W. Rogé & Company, Inc. is a fee-only financial planning and wealth management firm serving clients locally and virtually across the country, with Long Island, New York, Beverly, Massachusetts, and Naples, Florida office locations. We help clients Plan, Achieve, and Live® the life they want since 1986. To learn more about how we do this, click here.

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