National Philanthropy Day is celebrated this year on November 15th, recognizing what a difference charitable giving, volunteering, and community involvement make in our lives and communities.
Anyone can be a philanthropist, and thoughtful planning can help you make the most of the financial resources you can give. Sometimes, it’s simply a matter of choosing a giving strategy that aligns with your financial situation, charitable goals, and plans for the future. Here are six strategies worth exploring.
• When you want to support a cause you care about while providing for the people in your life, a charitable gift in your will or trust can help you do both.
You might leave a specific dollar amount, securities, real estate, or a percentage of your estate to a qualified charitable organization. You can generally update your plans as life changes as long as you follow the applicable legal requirements.
A gift in your will or trust allows you to create a lasting legacy without necessarily giving away assets during your lifetime. Depending on the arrangement, it may also offer estate or tax benefits.
• One relatively simple way to make a future gift is to name a qualified charity as a beneficiary of an eligible retirement account, life insurance policy, or certain bank or investment accounts.
In many cases, all it takes is completing a beneficiary designation form through your financial institution or plan provider. Review your choices periodically and coordinate them with your will or trust.
You can also explore naming a charitable organization or donor-advised fund sponsoring organization as a beneficiary where permitted.
• Retirement accounts can be an important part of your legacy plan, and they may offer a tax-efficient way to support charity.
When retirement assets pass to individual beneficiaries, withdrawals may be subject to income tax. A qualified charity generally doesn’t pay income tax on retirement-account distributions it receives. That can make retirement assets worth considering for charitable gifts, particularly when you want to leave other types of assets to family members.
The best approach depends on your account, beneficiaries, and estate plan. Talk with your financial and tax advisors before making changes.
• What if you could support a favorite charity and receive payments in return? A charitable gift annuity (CGA) may make that possible. With a CGA, you transfer assets to a qualified charitable organization in exchange for its promise to make fixed payments to you or another designated annuitant, typically for life. After the annuity payments end, the charity retains the remaining funds for its mission.
Depending on your circumstances, a CGA may provide a charitable income tax deduction and other potential tax benefits. If you donate appreciated assets, some capital gains may be recognized over time, so the tax treatment isn’t the same for everyone.
If you’re 70½ or older, for 2026, you may be able to use up to $55,000 from your IRA to fund a CGA through a special one-time election. There are specific rules about who qualifies and how the payments work, so check with your tax advisor.
• If you own a business, charitable giving may be part of your broader financial and succession plan. Depending on the structure of your business, you may be able to donate eligible interests in a C corporation, limited partnership, or limited liability company to a qualified charity. In some circumstances, donating appreciated interests before a sale may help avoid capital gains tax that could arise if you sold the interests first and donated the proceeds.
These gifts can be complex, so consult your financial, tax, and legal advisors well before a potential sale.
• Looking for a simpler way to organize your charitable giving over time? A donor-advised fund (DAF) may be worth considering. A DAF is an account administered by a sponsoring charitable organization. You contribute assets to the fund, may qualify for a charitable tax deduction when the contribution is made, and then recommend grants to eligible charities over time.
Potential advantages include simplified recordkeeping, flexibility in planning your gifts, and the ability to contribute certain appreciated assets. The tax treatment depends on the gift, your circumstances, and applicable rules.
DAFs can often be funded with cash and publicly traded securities, and some organizations accept other types of assets. Acceptance policies and fees vary.
Lindsey D. Rhea, CFP, is owner and wealth strategist at Alia Wealth Partners, connect@aliawealth.com.
