Most clients give because it feels right. The planning win is helping those dollars work harder without turning generosity into homework. When I frame charitable strategy, I start with one question: are we trying to give more, give smarter, or both? The answer sets the table for how we choose assets, timing, and the way gifts show up on the tax return.
Start with how taxes actually see the gift
Two ideas go a long way in client conversations. First, cash gifts are simple but not always the most effective. Second, the tax return only “sees” certain gifts if the client itemizes deductions for that year. Once clients hear that, they stop asking for fancy structures and start asking which dollars to give and when.
That opens the door to a few moves that usually matter.
Appreciated shares instead of cash
If a client holds investments in a taxable account that have grown meaningfully, giving shares can do double duty. The charity receives the full value. The client avoids realizing gains they would have paid tax on, and the deduction amount reflects fair market value if the holding period rules are met. In practice this feels like swapping which dollars do the giving. The charity gets the same support, while the portfolio sheds high-gain lots and resets basis over time.
Clients often ask whether this changes their risk. It does not have to. If they want to keep the same market exposure, they can repurchase the allocation with new cash rather than selling the appreciated shares. The gift becomes both generosity and portfolio housekeeping.
Bunching gifts so itemizing makes sense
Many households bounce between taking the standard deduction and itemizing. If their annual charitable gifts are meaningful but not quite enough to push them over the standard deduction each year, bunching two years of gifts into one tax year can make itemizing worthwhile that year and then returning to the standard deduction the next. A donor-advised fund can help, but it is not required. The point is to match generosity to the way the return is computed, not to force generosity into a schedule.
When a donor-advised fund does make sense, it is usually because the client wants to take a deduction in a high-income year but still grant to charities over time. They contribute once, get a receipt, and then send grants on their own calendar. That separation between deduction timing and gift timing is the value, not any investment feature inside the fund.
Qualified charitable distributions for IRA owners
Once a client reaches the eligible age for QCDs, gifts can come directly from IRAs to qualified charities. The amount given is excluded from adjusted gross income and can count toward required minimum distributions. For clients who no longer itemize or who care about keeping AGI lower for other reasons, this is often the cleanest path. The charity receives cash. The tax return stays quieter. Clients like that it feels like giving from income rather than selling something first and then giving.
A small but useful detail is that QCDs get recorded on the return differently than a typical charitable deduction. It is worth showing clients where it will appear so they know what to expect.
Timing gifts with income spikes
Windfall years create opportunity. A business sale, a large bonus, or a Roth conversion can push a household into higher brackets. Coordinating a larger charitable gift in the same tax year can soften the spike. Sometimes that means funding a donor-advised fund during the event and granting over several years. Sometimes it is as simple as gifting appreciated shares at year-end after rebalancing. The decision is not only about deduction size, it is about keeping a consistent marginal rate path and documenting why you chose it.
Two quiet client sketches
The Kellers, mid 60s, long-time givers
They give a few thousand dollars to several local nonprofits every year and usually take the standard deduction. We reviewed their taxable account and found a group of positions purchased years ago with large unrealized gains. Instead of writing checks, they started gifting shares each December, choosing the highest-gain lots first. They kept their overall allocation by investing new contributions where those shares used to be. In 2 of the next 5 years they bunched gifts into a single calendar year to make itemizing worthwhile, then returned to the standard deduction the following year. Nothing exotic. Same support for the causes they love. Less tax friction and a portfolio with fresher basis.
Nora, 73, living largely on Social Security and IRA withdrawals
She did not itemize, but she still wanted to give to her church and a health charity. We set up QCDs from her IRA to cover those annual gifts. The amounts satisfied part of her required minimum distribution and stayed out of adjusted gross income. For Nora, the win was not about bigger deductions, it was about simplicity and keeping her tax return predictable.
When charitable trusts enter the chat
Most households do not need a trust to give effectively. When they do, it is usually because they are balancing competing goals over time. A charitable remainder trust can turn a concentrated, low-basis asset into an income stream for the donor while committing the remainder to charity. A charitable lead trust can front-load gifts to charity while aiming to transfer assets to heirs with reduced transfer tax effects. These tools ask for careful drafting and clear intent. I only raise them when the client has both the complexity and the charitable ambition to match.
Records and the human part
Great giving plans fall apart in April if the receipts are scattered. I ask clients to decide on one home for confirmations and grant records. The folder can be paper or digital, it just needs to exist. I also encourage clients to name the organizations they plan to support at the beginning of each year and review that list in the fall. When generosity is proactive, the tax plan follows easily.
There is also a personal rhythm to this. Some clients want to involve kids or grandkids in choosing causes. Others prefer quiet gifts that simply get done. The strategy should respect those preferences. The cleaner the plan feels, the more likely it will repeat.
A gentler bar for success
You can tell a charitable plan is working when three things are true. The client knows which dollars they are giving and why. The timing makes sense relative to how the return is computed. And the portfolio is healthier, not messier, after the gifts go out. If those boxes are checked, you have likely moved the tax needle without putting complexity in the way of generosity.
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