As we approach the holiday season, many of us start thinking about ways to give back, both to the people we care about and to the causes that matter most to us. Charitable giving is one of the most rewarding parts of financial planning. Not only can it make a real difference in your community, but it can also be an important part of your overall financial strategy.
Whether you’re giving a few hundred dollars or creating a legacy gift that lasts for generations, a little planning can help your generosity go further.
Start with Your Values
Before deciding where or how to give, take a moment to think about why you want to give. Are you passionate about supporting local families, animal welfare, education, or environmental causes? Do you want to honor a loved one or simply help those in need? Think about some non-profit organizations locally that you may want to gift to.
By identifying what matters most, you can focus your giving on organizations that align with your personal values. This not only makes the experience more meaningful, but it also ensures your dollars are used in ways that reflect your goals.
Choose the Right Giving Method
There are many ways to give, and each come with their own advantages. Here are a few common options:
- Cash donations: The simplest and most direct way to give. Be sure to keep receipts or confirmation letters for tax purposes.
- Donating appreciated investments: If you own stocks or mutual funds that have gone up in value, you can donate them directly to a qualified charity. You may avoid paying capital gains taxes and still receive a charitable deduction for the full market value of the asset.
- Donor-Advised Funds (DAFs): These accounts let you make a charitable contribution now, receive an immediate tax deduction, and then recommend grants to your favorite charities over time. It’s like having your own mini charitable foundation without the administrative burden.
- Qualified Charitable Distributions (QCDs): If you are at Required Minimum Distribution, you can donate directly from your IRA to a charity (up to $100,000 per year) and count it toward your required minimum distribution. The gift won’t be included in your taxable income, which can help come tax season.
Even small changes, like setting up a recurring monthly donation or adding a charity to your estate plan, can make a lasting impact.
Understand the Tax Benefits
While the main motivation for giving should be generosity, it’s also smart to understand how charitable contributions fit into your broader financial picture.
If you itemize deductions on your tax return, your charitable gifts to qualified nonprofits may be deductible, reducing your taxable income. However, recent tax law changes have made the standard deduction higher, meaning fewer people itemize.
One additional tidbit to note – depending on your income bracket, you may want to bunch deductions into specific years to maximize your benefit. In 2026, there will be changes made to the tax deductibility of charitable contributions if you are in the 35% income bracket.
And remember: the rules for deducting non-cash donations (such as clothing, furniture, or vehicles) can be more complex, so keep detailed records and ask a tax professional for guidance.
Involve Your Family
Charitable giving is also a wonderful opportunity to teach the younger generations about gratitude, empathy, and community responsibility. You might hold a family meeting to decide which causes to support this year, or volunteer together at a local shelter or food bank.
When children and grandchildren see the joy that comes from giving, it helps build a lifelong habit of generosity—and a shared sense of purpose.
In families we have worked with we have seen an increasing desire to incorporate charitable planning into the family’s estate plan. In doing this we are looping in the children to help them see the impact that giving can have on the community around them.
In Summary
Charitable giving doesn’t have to be complicated. With a little planning, anyone can make a meaningful impact while also strengthening their own financial future. I always remind clients that giving is most powerful when it’s intentional. Start with your values, know your options, and make a plan that fits both your heart and your budget.