Intelligent Giving Strategies for the Holidays

Broadway Wealth Management can advise on intelligent giving strategies to fulfill your generous spirit while keeping an eye on your wealth.

As we approach the end of the year, the pace on charitable fundraising is picking up. There are several options for making gifts, each with benefits to the charity and the donor. With Broadway Wealth Management, fulfilling your philanthropic goals can also be a wealth strategy that maximizes the financial benefits of giving.

With just a few months left in the year, the pace of charitable fundraising is picking up—that means events of every type fill the calendar with opportunities to make gifts of time (volunteering), talents (board service) and treasure (donations).

For donors, the end of the year can also mean a final push to meet a voluntarism goal, a fundraising goal, or for those making donations—a closing tax window in which to get those gifts made. There are several options for making such gifts, each with benefits to the charity and the donor.

When making lifetime donations to qualified charitable entities there is no limit as to how much can be donated, but there is a limit to how much of the donation can be deducted on your income tax return. For an outright gift of cash, the donor can deduct an amount up to 60% of their adjusted gross income. Rates are lower for gifts of ordinary income property, tangible property and long-term capital gain property (appreciated securities). For gifts made to private foundations, the rates range from 20-30%.

Savvy charitable donors often make gifts of appreciated marketable securities instead of cash because the charity gets the full market value of the shares while the donor gets a deduction AND the added benefits of avoiding capital gains tax on the appreciation and the potential bump into a higher tax bracket had the donor instead sold the shares and donated the proceeds.

For donors facing a required minimum distribution (RMD) from an IRA, a qualified charitable distribution is an option that benefits the charity, meets the RMD requirement, avoids the RMD funds being included as taxable income and distributions can start earlier—at age 70 ½ even though the required minimum distribution age is now 73.

Methods of gifting that take a little more planning but provide benefits to both donor and charity include:

• Charitable Remainder Trusts—The donor creates a trust that pays a set amount/percentage to a non-charitable beneficiary (typically the donor) during the period of the trust and the remaining assets pass to a named charity at the termination of the trust.
• Charitable Lead Trusts—Set amount or percentage passes to the charity during the term of the trust and then to specified non-charity beneficiaries (donor or donor’s heirs) upon trust termination.
• Charitable Gift Annuities—The charity receives a lump sum outright in exchange for an agreement to pay specified payments to the donor for a period of time.

With Broadway Wealth Management, fulfilling your philanthropic goals can also be a wealth strategy that maximizes the financial benefits of giving. Whether it be establishing a trust or planning for lifelong contributions, we will advise you on intelligent giving strategies to fulfill your generous spirit while keeping an eye on your wealth. If you would like to know more about Charitable Giving, please visit broadway.bank or call (210) 283-6700 and ask to speak to a Wealth Advisor.

Broadway Bank Wealth Management

The Broadway Bank Wealth Management team is comprised of highly credentialed, best-in-industry experts with decades of experience. We provide custom-tailored advice and guidance paired with premium modern banking solutions and services and a dedicated team to address any financial need.