Thoughtful Charitable Giving

Charitable  giving  not  only  improves  the  lives  of  others  but  has  been  shown  to  increase  happiness  more  than  personal  spending on oneself[1]. Additionally, improved happiness and health have been linked to reduced rates of stress and lower blood pressure2. To make your giving the most thoughtful, ask yourself these three questions.

Which Charity? We recommend finding a charity that aligns with your values.  Begin by searching for charities that help  causes  that are important to you. Searching on websites like can provide details about how the charity uses the donations. After finding a few charities that inspire you, we recommend scheduling on‐site visits to your top charities  and interviewing managers involved with the charity before making any significant gift. If time allows, volunteering is a great way to get to know the charity from  the inside and to see firsthand how they run their business and whether they accomplish  their stated goals. You might even ask your children and grandchildren to volunteer with you for a few hours to share in the health  benefits  of  giving  back  and  creating  lasting  family  memories.  Community  foundations  are  another  good  way  to  get  connected to local charities as the staff can provide further details of charities working for causes you may want to support.

What to Give Considering Taxes? Donations to 501(c)(3)  charities  result in  an itemized  deduction,  which reduces taxable income for taxpayers that itemize. The standard deduction in 2024 is $14,600 for single filers and $29,200 for married filers which means taxpayers will not itemize their tax deductions and therefore, will benefit from the charitable tax deduction. For charitable donors, the best way to give might be to switch from giving annually to giving every few years. “Bunching” two or three years’ worth of charitable  donations into one year might result in itemizing deductions in that year while taking advantage  of the now higher standard deduction the other years (example of married filers in chart below). Cumulatively, this results in greater  tax  deductions which translates to tax savings. If you would like to bunch gifts for tax purposes but benefit the charity  over time, consider using a donor advised fund (discussed below) which allows you to take the charitable deduction in the year of the gift, but  allows you to make distributions to the charities over time.

Charitable Bunching to Maximize Itemized Deductions (Filing Jointly)

Most gifts to qualified charities, except for the gift of time, qualify for a deduction for taxpayers who itemize. The most common gifts are cash or check, highly appreciated stock and personal property (including clothes, furniture, books, etc.). But other property such as highly appreciated real estate, cars, old life insurance policies and qualified direct distributions to charity from retirement plans make attractive giving options as well.

Long‐term  capital  gain  assets  like  highly  appreciated  real  estate  or  company  stock  held  for  more  than  one  year  are  great  assets to donate because not only do you get the benefit of a charitable tax deduction, but you also avoid paying tax on the capital gain – the difference between your cost basis and the current market value. Many business owners about to sell  their  company donate a portion of their company stock to charity before entering into a letter of intent about the potential sale. When structured  properly, the business owner may take  an income  tax  deduction  [hopefully  in  the same  calendar  year  when  adjusted gross income (AGI) is high] of the fair market value of his or her company stock donated without charities, the amount of the income tax deduction is the fair market value of the asset but is limited to 30% of your AGI. A special election can be made for long‐term capital gain assets that would allow you to deduct up to 50% of AGI. However, it  would be based on the adjusted cost basis of the asset donated. Any excess amount donated not currently deductible can be carried forward for up to five years.

For gifts of cash, inventory or short‐term capital gain property to qualified public charities the amount of the deduction is the adjusted cost basis of the asset but is limited to 50% of your AGI (60% of your AGI for cash gifts). These limits are based on gifts to qualified public charities, some supporting organizations and private operating foundations.

If you have a life insurance policy that you no longer need, consider the leverage of donating it to charity.  Life insurance  policies  are great to give because they do not affect your cash flow as an out‐of‐pocket expense, you get a current income tax deduction (assuming you itemize) and the eventual benefit to the charity is usually much greater than your previously  incurred cost. A  donation of a life insurance policy to a qualified public charity can yield a current income tax deduction of the adjusted basis in the policy, limited to 50% of AGI. In order to take advantage of the current income tax deduction,  you  must  irrevocably  assign all incidents of ownership to the charity.  Donations to pay any future premiums should be  made to the charity and are also  income tax deductible (assuming you itemize). The donation of a life insurance policy to a charity should be carefully coordinated  by  your CPA, insurance company and charity to ensure the  charity  retains  an  insurable interest in the donor  insured and the absolute assignment of all rights in the policy has been made[4].

Large donations to private charities, like private foundations  or  certain  fraternal  organizations, are subject to lower limitations. Specifically, for long‐term capital gain property, the deduction is the fair market value of the assets donated limited to 20% of your AGI rather than 30%. For short‐term capital gain property and cash, the deduction is the adjusted cost basis on the assets donated limited to 30% of AGI rather than 50% or 60% for public charities.

Have You Considered Alternate Ways of Giving? The  simplest  way  to  give  to  charity  is  by  giving  directly  to  the  charity.  However, putting thought into the way you give can create flexibility. To make a charitable donation with a lasting impact, consider using a donor advised fund (DAF). DAFs allow you to get a charitable tax deduction in the year you make  the contribution,  while allowing you to stretch the gifts to charities over your lifetime. From your DAF you have the flexibility to set up auto payments to your church or any qualified charity, or simply make a gift once a year. You can also  give the joy of giving to others  by  allowing  them to direct a donation to a charity of their choice from your DAF. DAFs are inexpensive to set up  with  a  minimum initial contribution of typically $5,000. The contributions can be invested, so even a little can go a long way. Keep in mind, just like any charitable donation, there can be no quid pro quo (the donor  cannot receive anything in return for the gifts)  and a DAF cannot distribute to a charity to satisfy a personal pledge.

Charitable trusts are another way of giving  but are more complex and expensive to set up and maintain. Charitable remainder  trusts provide an income stream to the donors for a set term of years or throughout their lifetimes and ultimately leave the remaining assets to a charity. A charitable lead trust pays income to a charity during the donor’s lifetime and the remaining  assets  are passed to the heirs of the donor. Charitable trusts are not as popular as they once were because there are significant costs to establish and maintain the trust, the tax law change in the late 1990s requiring more to be paid to the  charity, and  the recent period of low‐interest rates yielding minimal income to donors from a CRT.

Everyone Can Give Even if you don’t have highly appreciated stock or much cash to give, making simple gifts of time,  old clothes, or  weekly  donations to your church  will still go a long way.  We  encourage you  to  enjoy the gift of giving by incorporating philanthropy into your life.


If you could benefit from a conversation with our advisory team, we would be happy to provide a complimentary consultation.  


[1] “Money Spent on Others Can Buy Happiness,” The Harvard Gazette, (April, 2008)‐spent‐on‐others‐can‐buy‐happiness/

[2] “Social Support and Ambulatory Blood Pressure: An Examination of Both Receiving and Giving,” International Journal of Psychophysiology, (November 2006). 

[3] How to Donate Your Life Insurance Policy to Charity,”, (October 2023).‐insurance/donate‐to‐charity/

Important Disclosure: This material is intended for general informational purposes only. Beacon Pointe Advisors does not offer legal or tax advice. Please consult with the appropriate tax or legal professional regarding your circumstances. This information is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice. Only a tax or legal professional may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement any  design  discussed  herein.  Nothing  herein should be relied upon as  personalized  investment advice, nor should it be considered an individualized recommendation, offer or solicitation for the purchase or sale of any security or to adopt a specific investment strategy. An investor should consult with their financial professional before making any investment decisions. Beacon Pointe provides links for your convenience to other providers’ websites. Beacon Pointe is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve or endorse the information provided.

© Beacon Pointe Advisors. All Rights Reserved.


You are now leaving the website of Beacon Pointe Advisors and will be entering the website for Institutional Intelligent Portfolios®, an automated investment management service made available to you exclusively through Beacon Pointe Advisors. Beacon Pointe Advisors is independent of and not owned by, affiliated with, or sponsored or supervised by Schwab. Schwab has no responsibility for the content of Beacon Pointe Advisors' website. This link to the Institutional Intelligent Portfolios website should not be considered to be either a recommendation by SPT, Schwab, or any of their affiliates, or a solicitation of any offer to purchase or sell any security.

Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.