The final months of the year signal a surge in charitable giving. Advisors and clients often find themselves caught in a last-minute Giving Season scramble to maximize tax benefits and finalize donation plans by year-end. By encouraging clients to start planning now, financial advisors can help them reduce stress and leverage the advantages of donor-advised funds before the holiday rush.
Maximize Tax Efficiency by Acting Now
Starting charitable planning now offers significant tax benefits. With donor-advised funds, clients receive immediate tax deductions upon contribution, even if they decide to grant the funds to charities at a later time. By making contributions before the year-end rush, clients can take time to consider the charities they wish to support while securing tax deductions.
Moreover, early contributions give clients the flexibility to contribute more complex assets such as publicly traded securities, restricted stock, or private equity interests. These non-cash assets provide differentiated tax advantages, such as avoiding potential capital gains tax while still allowing the client to deduct the full market value of the donation.
Avoid the Year-End Bottleneck
Waiting until December to make charitable contributions can complicate the philanthropic process and lead to unnecessary stress. Advisors can guide clients in setting up a donor-advised fund now, giving them the freedom to spread out their giving over time without the pressure of immediate decision-making. This strategy also allows clients to avoid mistakes commonly made in the final weeks of the year when rushing to meet deadlines.
In addition, clients may experience windfalls throughout the year—be it through stock sales, business transactions, or unexpected income. By “bunching” donations into a single year, clients can reduce their taxable income during a high-earning year while maintaining the flexibility to grant those funds to charities over several years.
Waiting until December leads to unnecessary pressure. By acting now, clients avoid the pressure of last-minute giving and reduce the chances of making hasty decisions, all while enjoying greater control over their philanthropic strategy.
Engage Family and Build a Legacy
Starting early gives clients the opportunity to involve family members in their charitable plans. Donor-Advised Funds are a great way to engage the next generation, fostering meaningful conversations about values and philanthropy. Advisors can help families develop giving plans that engage the entire household and align their long-term charitable and financial goals.
By using a donor-advised fund to facilitate multi-generational giving, clients can build a philanthropic legacy that not only maximizes tax benefits but also strengthens family bonds and creates a lasting impact on the causes they care about.
The TIFIN Give Advantage
TIFIN Give provides advisors with a modern solution to integrate charitable giving into their services. The platform allows for seamless creation of donor-advised fund accounts, flexibility in managing non-cash asset contributions, and tools for family engagement in giving. By adopting a modern approach to charitable planning, advisors can provide an enhanced, personalized experience for their clients.
By encouraging clients to get started early with their charitable giving plans, particularly through the use of Donor-Advised Funds, advisors can help them avoid the chaos of the year-end rush, maximize tax benefits, and create a lasting family legacy. Now is the perfect time to begin planning and help clients make the most of the giving season.