Strategic Philanthropy

By Adam Bruno, Author of They Lied: The Real Cost of Your Retirement

Americans made more charitable donations in 2020 than in 2019. In fact, gifts soared to a record $471 billion – a 5.1% increase from the prior year. This is even more remarkable given the fact that the vast number of regular charitable fundraising events, such as walks and runs, were put on hold during the pandemic.

While individual contributions typically comprise the majority of charitable donations, the biggest increase last year came from foundations, which posted a 17% increase to the tune of $88.5 billion in contributions. That’s the largest share of donations ever from foundations. By contrast, corporate contributions dropped by 6% last year, which was no surprise since those gifts typically align with pre-tax profits and the national gross domestic product – both of which declined in 2020.1

For those seeking to make donations, consider some of the following strategies.

Windfalls
You may have received a stimulus check last year and it’s been sitting in your savings account because you really didn’t need that money. One good use is to donate those dollars to a charitable cause, perhaps to help out a food bank or other local organization. Note that for the 2021 tax year, single filers may donate up to $300 in cash ($600 for married couples filing jointly) as an above-the-line deduction. This means you don’t even need to itemize to make a small but meaningful charitable contribution.

Donor-Advised Funds
A donor-advised fund (DAF) is similar to having your own personal foundation. You basically make a gift to a tax-deductible account which is administered by a public charity that permits donors to recommend gifts to eligible charities. Contributions are deductible in the year they are made, even if the money isn’t dispersed that year. A DAF also enables donors to invest the money for a larger donation to the charities of your choice sometime in the future. Donor-advised funds can even accept stock donations, which is a good way to offload a highly appreciated stock in your portfolio without having to pay capital gains.

Qualified Charitable Distribution
Investors older than age 70½ can make qualified charitable distributions (QCD) of up to $100,000 a year. By giving instructions to have assets transferred from your IRA custodian directly to the charity(s) of your choice, you can reduce your IRA tax obligation and the balance subject to subsequent required minimum distributions (RMD). 2

If you have questions, please call my office at (239) 771-8696 and schedule your confidential visit with me.

For more information go to taxfreefortmyers.com to see my upcoming webinar schedule or to download a complimentary copy of my book.

Evolution Retirement Service
12500 Brantley Commons Court, Suite 3
Fort Myers, FL 33907
(239) 771-8696
www.evolutionretirementservices.com
info@evolutionretirementservices.com

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1 US News & World Report. June 15, 2021. “Charitable Giving in the U.S. Reaches All-Time High in 2020.” https://www.usnews. com/
news/business/articles/2021-06-15/ charitable-giving-in-the-
us-reaches-alltime-high-in-2020. Accessed Aug. 9, 2021.

2 Christine Benz and Susan Dziubinski. Morningstar. May 24, 2021. “Charitable Giving Strategies in 2021.”
https://www. morningstar.com/articles/1035577/ charitable-
giving-strategies-in-2021. Accessed Aug. 9, 2021.