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Strategies for Structuring Your Charitable Giving Plan

Strategies for Structuring Your Charitable Giving Plan

| October 26, 2023

Giving back through charitable donations is one of the most fulfilling parts of a sound financial plan. And you can make a larger impact on the causes you care about through a thoughtful and strategic donation strategy.

We’ll explore smart techniques for structuring your charitable giving to maximize benefits for the recipients and safeguard your own financial situation.

Focus on Your Passions

Think about what matters most to you. Are there global issues you feel passionately about? Do you have a personal connection to certain local charities or causes?

Focus your giving on where you feel emotionally invested for the most meaning and impact. If you’re not sure where to start, consider these popular causes:

  • Education
  • Health care
  • Scientific research
  • The environment
  • Human rights
  • Ending poverty
  • Providing clean water access

Charitable causes come in all shapes and sizes, so take the time to identify where your desires to give back are strongest. Make that the cornerstone of your approach.

Strategic Giving Vehicles

Once you determine your priorities, the next step is choosing the right philanthropic tools. Some options include the following.

Donor-Advised Funds

Donor-advised funds allow you to make charitable contributions of cash or other assets. As a contributor to a donor-advised fund, your contributions are immediately tax-deductible, and you can recommend grants from the fund over time.

Private Foundations

You can give to other private foundations, or you can create your own. A private foundation is a legal entity that funds grants to other charities. This option requires a more complicated legal setup, but it allows full control over investments and grant decisions.


You make a bequest by designating a charity to receive assets from your estate upon your death. You can note your bequest through either your will or a trust.

Charitable Gift Annuities

Charitable gift annuities provide fixed payments to you from a charity during your lifetime in exchange for a donation. The payments may be partially tax-exempt.

Charitable Remainder Trusts

With a charitable remainder trust, you transfer assets into an irrevocable trust that pays income to you or your beneficiaries for life. The remainder goes to a charity upon your death.

To know which of these vehicles is right for you, you should research which structure aligns with your giving goals, values, time horizon, and assets.

Giving Methods

You can make charitable contributions in various forms:

  • Cash
  • Appreciated securities
  • Real estate
  • Retirement plan assets
  • Life insurance

Each method has different tax implications to consider.

For example, donating long-term appreciated securities allows you to avoid the capital gains tax you would owe if you sell the assets. That increases the impact of your gift at no added cost to you. Of course, you want to consult qualified financial and legal advisors about the best asset type to contribute based on your personal situation.

Timing Matters

Remember that strategic timing of your charitable giving can increase tax benefits. Bunching multiple years’ worth of donations together may allow you to itemize deductions only in those years. This can maximize the tax benefits of your donations.

Strategic timing can also help you offset income spikes from the sale of a business or the reception of a bonus.

Tax Incentives

You can take advantage of several tax incentives that encourage charitable giving. Your financial advisor will help you determine how to maximize benefits like itemized deductions, gift tax savings, and estate tax savings.

Tax planning is crucial if you want to optimize impact. Certain assets gifted at death, like IRAs, can minimize taxes for your heirs as well.

Legacy Planning

As part of your estate plan, consider creating a charitable legacy for causes you care about. This sends a powerful message to future generations about what matters most.

You may name a charity as a beneficiary of your IRA or life insurance policy, or you can include it in your will or living trust.

Give While Living

Many people donate to charity through their estate plans, funding causes after they pass away. But you should consider the benefits of giving during your lifetime as well.

These donations allow you to see your contributions in action, work closely with the charity, and form meaningful relationships. They also provide immediate funding for current initiatives.

Professional Charitable Giving Strategies

With intention and forethought, your charitable giving can make a meaningful difference in causes close to your heart. Take a strategic approach that allows you to optimize your taxes, your legacy, and your donation’s impact.

For professional assistance, contact us to schedule an introductory meeting. We’ll help you explore your passions, priorities, and giving possibilities. Together, we can build a plan that maximizes the impact of your generosity while fitting seamlessly into your overall financial strategy.