The holiday season is the most generous time of year. Between family traditions, community events, and the spirit of giving, December naturally inspires people to support the causes closest to their hearts. But thoughtful giving isn’t just about writing a check, it’s also about making sure your generosity has the greatest possible impact. With a bit of strategic planning, you can support the organizations you care about and take advantage of meaningful financial benefits before the year ends.
Here are a few smart charitable giving strategies to consider this holiday season.
Donate Appreciated Securities Instead of Cash
If you’re planning to make a larger gift, donating appreciated stocks, bonds, or mutual funds can be far more efficient than giving cash. When you donate securities that you’ve held for more than a year, you avoid paying capital gains tax on the appreciation and you can deduct the full fair market value of the asset if you itemize. That means the charity receives more, and you potentially save more.
Many nonprofits are set up to receive securities donations, so this strategy is easier to use than most people realize.
Use a Donor-Advised Fund for Flexible, Long-Term Giving
A donor-advised fund (DAF) is a great tool for people who want to give but aren’t sure exactly where or when. With a DAF, you make a charitable contribution now, and potentially take an immediate tax deduction, but you can distribute the funds to your favorite charities over time. It’s a simple way to create a long-term giving strategy while maximizing the tax benefits of a single contribution.
DAFs are especially helpful in higher-income years when you want to offset taxable income or bundle charitable contributions to exceed the standard deduction threshold.
Consider a Qualified Charitable Distribution (QCD)
If you are 70½ or older, a Qualified Charitable Distribution from your IRA can be one of the most powerful giving tools available. A QCD allows you to donate up to $105,000 per year (2025 limit) directly from your IRA to a qualified charity. Because the funds go straight to the organization, the IRS doesn’t count the distribution as taxable income, and if you must take RMDs, you can use a QCD to satisfy all or part of that requirement.
For retirees hoping to support causes they love while also reducing their taxable income, QCDs can be a win-win.
Give Thoughtfully and Intentionally
No matter which strategies you use, the most meaningful gifts are the ones that reflect your values and long-term goals. Take time to review the missions of the organizations you support, ensure they’re aligned with your priorities, and consider how your giving fits into your overall financial plan.
A little planning can turn holiday generosity into long-term impact — for both your favorite causes and your financial life.
If you’d like help choosing the right charitable giving strategy or integrating philanthropy into your year-end financial plan, Montgomery Financial Partners team is here to guide you every step of the way.
Questions?
If you need guidance with charitable giving this holiday season, please reach out to me at 301-990-9170 or email geoff@montgomeryfinancialpartners.com.
Recent Comments