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Charitable Giving Strategies for Delaware Residents

Tessa MacDonald

Donation Boxes

Charitable giving is more than just a way to make a positive impact on the world—it’s also a powerful financial planning tool. Whether you want to reduce your tax burden or incorporate giving into your estate plan, it can help you reach your philanthropic goals while also benefiting financially.


If you’re a Delaware resident looking for ways to maximize the impact of your charitable donations, this guide is for you. Here at B.I.G. Investment Services, we help clients like you align their charitable aspirations with their financial goals through effective charitable giving strategies.


What Are Your Charitable Giving Options?

Direct Donations 


One of the easiest ways to support a charity is through direct donations. You can choose to give a one-time gift or make ongoing contributions to your favorite organizations. Also, most people go for cash donations, but did you know you can also donate appreciated assets like stocks or real estate? Yes, and that can come with some great tax benefits too (more on that later)!


Donor-Advised Funds (DAFs) 


A great way to make a charitable contribution while getting an immediate tax deduction. You can recommend grants to your favorite charities over time, too. They're also quite flexible and easy to set up, which makes them a fantastic option for folks in Delaware who want to simplify their giving and enjoy some nice tax benefits!


Charitable Trusts


A smart way to handle your charitable giving while also planning your finances. There are two main types to consider:

  • Charitable Remainder Trusts (CRTs): With these, you can donate assets but still get income from them for a while. Then once that period is over, whatever's left goes to the charity you choose.

  • Charitable Lead Trusts (CLTs): In this case, the charity gets the income from the assets for a set time, and after that, the remaining assets come back to you or your beneficiaries.


These trusts can be fantastic tools for estate and tax planning as they let you support causes you care about while also keeping wealth for future generations.


Private Foundations 


Now if you want to keep long-term control over your charitable donations, a private foundation could be a great choice for you. It lets you make grants to different charitable organizations over time. Just keep in mind that they do need a bit more administrative work and can also come with higher costs than other options like donor-advised funds.


Charitable Giving Taxation Planning and Strategies


Donations Volunteer

Crafting a smart charitable giving strategy is a win-win: it helps the causes you care about and can lighten your tax load too!


Donate Appreciated Assets


One of the smartest ways to give is by donating appreciated assets like stocks or real estate. If you've held these for over a year, you can skip capital gains taxes and still deduct the full fair market value. So, the charity gets more, and you save on taxes—it's a win-win!


Qualified Charitable Distributions (QCDs) 


If you're over 70½, have you heard about qualified charitable distributions (QCDs)? They let you donate straight from your IRA to a charity you love!

The best part? QCDs count toward your required minimum distribution (RMD) but won't hit your taxable income. It’s also a great way for retirees in Delaware to give back to their favorite causes while keeping their tax bills lower!


Bunching Contributions


Have you ever thought about "bunching" your charitable contributions?

By stacking several years' worth of donations into one year, you might surpass the standard deduction and be able to itemize your deductions. This can boost your tax benefits! It’s especially effective with donor-advised funds, where you can make a big contribution in one year and then spread out the grants to charities over time.


Charitable Deduction Limits


If you’re aiming to get the most out of your tax savings, it’s good to know about charitable deduction limits. Usually, you can deduct up to 60% of your adjusted gross income (AGI) when you make cash donations to public charities.

Just keep in mind that this limit can still change depending on the type of donation and the organization you’re giving to.


Charitable Giving Tax Strategies: Incorporating Philanthropy Into Estate Plans 


Including charitable giving in your estate plan is not just a generous gesture; it’s a fantastic way to create a lasting impact on the causes you care about. Not only does it help ensure that your values carry on, but it might also provide you with some tax benefits—who doesn’t love that?


Leaving a Bequest 


This is your chance to leave a specific amount of money, a percentage of your estate, or even particular assets to a charity that’s close to your heart. The beauty of bequests lies in their flexibility—you simply can adjust them as your financial situation or charitable goals evolve.


So, whether you’re passionate about educational initiatives, environmental causes, or local community support, you can tailor your bequest to match your vision!


Charitable Trusts in Estate Plans 


Options like charitable remainder trusts and charitable lead trusts allow you to take care of your loved ones while also championing the causes you believe in. Imagine supporting a charity you love and providing for your family at the same time!

Plus, these trusts might even come with some sweet estate and income tax benefits. Win-win!


Beneficiary Designations 


And here’s a little-known gem: did you know you can name a charity as a beneficiary on your retirement accounts, life insurance, or other assets? It’s a straightforward way to weave charitable giving into your estate plan. Not only does it simplify your giving, but it can also help reduce your taxable estate.


Planning Charitable Giving: Find Causes That Align With Your Values


The Man is Wearing a Jacket

Effective charitable giving is not just about tax advantages and financial planning; it's also about supporting causes that resonate with your personal values.


Identify Your Passion


Let’s kick things off by figuring out what really matters to you. Are you super passionate about education, protecting the environment, healthcare, or fighting for social justice? When you zero in on causes that resonate with your values, your charitable giving becomes way more personal and fulfilling. So, what’s your cause?


Research Organizations


So, you’ve figured out what interests you—great! Now, let’s look for organizations that focus on those areas.


Check out some reputable charities that are known for being transparent and using their funds wisely. Websites like Charity Navigator and Guidestar are incredibly helpful for checking out different organizations. Plus, they also make it easier for you to find the right fit and feel good about your choices!


Local vs. National Charities


When it comes to giving back, have you thought about whether to support local charities or go with national ones? Local charities really make a difference right in our own backyards, while national organizations can reach a wider audience. Both are great options! It all comes down to what feels right for you and your goals for giving.

So what are you leaning towards?


FYI: Resources For Your Charitable Giving Planning


Professional Advisors


Connecting with financial planners, estate planning attorneys, and tax advisors is a great start! These experts can help you craft a comprehensive giving strategy that not only aligns with your financial goals but also ensures your generosity reaches the causes you care about most.


Charity Evaluation Tools


Before you donate, why not do a little homework?


Websites like Charity Navigator and Guidestar are fantastic resources that provide insights into the effectiveness and financial health of charities. And with just a few clicks, you can find out which organizations are making a real difference and how your contribution can help them thrive.


B.I.G. Investment Services


At B.I.G. Investment Services, we’re passionate about helping you make the most of your charitable contributions. We’re here to work closely with you to develop a personalized strategy that not only maximizes your tax advantages but also aligns perfectly with your long-term goals.


Your Successful Charitable Giving Financial Planning Starts Here!


Let us help you achieve your philanthropic goals with our expertise and personalized approach. Contact B.I.G. Investment Services today and start your impactful and strategic giving!


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