Skip to content

Charitable Donations & Contributions [Video]

by Financial Design Studio, Inc. / November 1, 2021

This time of year people are thinking about charities and year-end donations.  Even events like recent hurricanes prompt people to consider how they can give. This is one item on our year-end tax planning checklist.  Be sure to download your copy! (This article has been updated since its original post date)

Let’s talk through the number of options you have.

How to make Charitable Donations & Contributions

Monetary Options:

Cash: Give cash directly to the charity you wish

Check: Write a check to the charity

ACH: Have the funds pulled directly from your bank account

Credit Card: For a recurring payment

Stock: Stock with large gains can be good for donating so you do not have to recognize the gain

RMDs or QCD: If you don’t need your RMD you can donate that money up to $100,000 per year

Non-Monetary Options:

Clothing

Furniture

Household Items

These are typically things you donate to the Salvation Army or Goodwill.  With these items be sure to keep a receipt. If you’re donating things that are worth over $5,000 you need to get an appraisal.  This is required by the IRS. For example, you may be remodeling your kitchen and giving away all the cabinets or appliances to Habitat For Humanity.

Donor Advised Fund:

Another strategy that can allow you to give cash or stocks when you don’t know which charitable organization you want to give to can be using a Donor Advised Fund or Charitable Trust.  You donate or contribute money into this account. The gift is irrevocable meaning that it can’t be undone. In the year you make the contributions you get the tax deduction. Then when you decide to make gifts to one or more organizations over time you can do so.  The funds can be invested so it can be growing year by year too.

When would a Donor Advised Fund make sense to use?

  • If you don’t know which organizations you want to give to, but still want to get the tax deduction in this year.
  • If you have a high income year.  Whether you have a large bonus or extra earned income.

Download our year-end tax planning checklist. If charitable donations & contributions are important to you this may be a great option.  We’re happy to help you set this up!

Ready to find out more?

Contact us today for a free 30-minute consultation!

Recommended Reading

Investing vs. Speculating… Are You Feeling Lucky? [Video]

Are you someone who likes to buy a lottery ticket, hoping yours is the winning number? Let's compare investing vs. speculating.

Fee Only Financial Advisor Deer Park Barrington Chicago Your Beneficiaries Matter

Your Beneficiaries Matter: Check Who They Are [Video] 

It’s time to do a really quick check of your beneficiaries. This is something that is really easily overlooked. I want to review some of the common accounts where you need to set a beneficiary because this is what states who inherits the funds that are in these accounts. 

Financial Design Studio, Inc.

We are financial advisors in Deer Park and Barrington, IL. A team with a passion for helping others design a path to financial success — whatever success means for you. Each of our unique insights fit together to create broad expertise, complete roadmaps, and creative solutions. We have seen the power of having a financial plan, and adjusting that plan to life. The result? Freedom from worrying about the future so you can enjoy today.