Tax strategies to give more to the causes you love
Giving is one of the most powerful ways to make a difference. Whether it's supporting a local nonprofit, funding scholarships or helping a cause close to your heart, generosity creates ripples that go far beyond dollars.
But here's something many donors don't realize, with a little planning, you can amplify that impact (sometimes dramatically) without spending more. The tax code actually rewards charitable giving, and understanding those rules can help you give more to the organizations you care about while reducing what you owe in taxes.
Here are some practical ways to make the most of your giving in 2025 and beyond:
- Donate appreciated assets instead of cash
If you've held stocks, mutual funds, ETFs, or real estate that have grown in value, consider donating those assets directly rather than selling them first. Why? Because selling triggers capital-gains tax, up to 23.8% for high earners. By transferring the asset to a qualified charity or donor-advised fund (DAF), you avoid that tax and can still deduct the full fair-market value if you itemize.
Example: Shares bought for $10,000 and now worth $100,000 would incur over $21,000 in federal taxes if sold first. Donating them directly means zero tax and a full $100,000 deduction, more for charity, no extra cost to you.
- “Bunch” donations with a donor-advised fund
With the standard deduction at $15,000 for singles and $30,000 for couples, many taxpayers don't itemize. A strategy called "bunching" can help contribute multiple years' worth of donations into a DAF in one year. This allows you to claim a larger deduction and then distribute funds to charities over time. Bunching often saves thousands in taxes while keeping your giving consistent.
- Use qualified charitable distributions (QCDs)
If you're 70½ or older, you can transfer up to $108,000 annually from your IRA directly to charity. These QCDs count toward your required minimum distribution, aren't included in taxable income, and work even if you don't itemize. For retirees in higher tax brackets, this can be a powerful way to give and reduce income-related surcharges.
- Consider charitable remainder trusts (CRTs)
For large, appreciated assets like concentrated stock or real estate, a CRT can provide lifetime income, an immediate charitable deduction and help avoid upfront capital-gains tax. When the trust ends, the remainder goes to your chosen charities, a win-win for donors and causes.
- Don’t forget state tax credits
Some states offer tax credits for donations to specific programs, such as scholarships or conservation efforts. These credits can sometimes offset 50-100% of your gift, and when paired with federal deductions, the net cost of giving can be surprisingly low.
Charitable giving isn't just generous; it's one of the few legal ways to significantly reduce your lifetime tax burden while supporting causes you care about. By matching the right asset with the right strategy, you can often give more without spending more.
Before making decisions, consult a financial advisor or tax professional to ensure you're maximizing every benefit. The tax code rewards generosity, make sure you take advantage of it.
