Charitable giving, in the context of financial advisors is a wealth management strategy that allows investors to donate assets—including appreciated securities, real estate, and other holdings—to qualified charitable organizations while optimizing their investment portfolio and tax efficiency.
Investors can donate appreciated securities directly from their portfolios to avoid capital gains taxes that would otherwise be triggered by selling. This approach allows donors to contribute at full market value while eliminating embedded gains—a particularly valuable strategy for long-held positions or highly appreciated stocks.
A popular vehicle for portfolio-focused donors, DAFs allow investors to contribute appreciated assets, receive an immediate tax deduction, and distribute to charities over time. The funds are invested and can grow tax-free, providing a way to build charitable capital while maintaining investment flexibility.
These vehicles enable investors to transfer appreciated securities into a trust, receive income distributions during their lifetime, and have remaining assets go to charity. This strategy creates liquidity for concentrated stock positions while generating ongoing income and tax benefits.
Charitable giving can serve as a portfolio management tool, allowing investors to donate underperforming or unwanted holdings while maintaining their target asset allocation—without incurring capital gains on the disposition.
For investors managing significant portfolios, charitable giving strategies integrate with broader estate planning, allowing them to reduce taxable estates while supporting causes aligned with their values.
Dollar giving was up 13% in fiscal 2021, while the number of grants rose 24%.
Grants increased by 27% in dollar terms from the same period last year, with more than 123,000 charities benefiting from the donations.
Although the biggest reward of giving is psychological, the tax benefits can make doing good feel even better financially.
Introducing clients to tax-efficient ways to give, such as using a donor-advised fund, can help them do more with their gifts. But charitable intent, rather than tax benefits, should be the primary motivation for clients to give.
The measure in the Senate would create 15- and 50-year limits on amount of time money could remain in DAFs.
Women are still more generous than men and became even more interested in philanthropy in 2020.
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In the final part of a three-part series, the authors examine planning's role in the changing preferences of next-generation clients.
The new tool, called PracticeLab, is similar to the services advisers are getting from custodians and other business partners.
Take advantage of an environment that's favorable for charitable giving to engage in tax-smart, high-impact philanthropy.
Donor advised funds can be used to support increasingly popular impact investing.
It’s as much about returns as about values, IN ESG Summit participants say
Here are some strategies for clients eager to lock in tax-efficient financial decisions before year-end
Tax rates are more advantageous now for realizing compensation and capital gains than they likely would be after a hypothetical 'blue wave' election
The six-part online series is co-sponsored by the American Heart Association and qualifies for six continuing education credits
