Smart Charitable Giving Before Year-End

Smart Charitable Giving Before Year-End: 3 Simple Ways to Make a Bigger Impact

For many people, the holiday season isn’t just about celebrations — it’s also about giving. Whether you support a local charity, your place of worship, or a cause close to your heart, year-end is a perfect time to make a difference.

But here’s something most people don’t realize:

There are easy ways to give that can also help reduce your taxes and stretch your retirement income even further.

Here are three simple, consumer-friendly strategies that help your generosity go further — without adding complexity. 

1. Give Directly From Your IRA (If You’re 70½ or Older)

If you’re 70½ or older, you may be able to donate directly from your IRA to a charity. This is one of the simplest and most powerful ways to give.

When you give this way:

• The money goes straight from your IRA to the charity
• The amount you give does not count as taxable income
• If you’re required to take yearly withdrawals from your IRA, the donation can count toward that amount

In plain English:
You support a charity you care about, and you may lower your taxes at the same time.

A Simple Example
If you plan to give $1,000 anyway, giving it directly from your IRA instead of your checking account can keep that $1,000 from being counted as taxable income. That often results in paying less.

2. Give Investments Instead of Cash

If you own stocks, mutual funds, or ETFs that have grown in value over the years, donating those investments may help you more than giving cash.

Why?
Because when you donate an investment that has increased in value:

• You don’t have to pay taxes on the growth
• The charity receives the entire current value
• You free up cash you may want to keep or use elsewhere

Example
If you bought a stock for $500 and it’s now worth $3,000:
Giving the stock means the charity receives all $3,000 — and you avoid taxes you would have paid if you sold it first.

If you plan to give anyway, this can be a smart option.

3. Use a Donor-Advised Fund If You Want Flexibility

A donor-advised fund (often called a “DAF”) is a simple way to organize your giving.

It works like this:

• You place money — or investments — into a charitable account
• You can give to any charities you choose from that account
• You decide the timing of your donations

This is especially helpful if:

• You want to give consistently over time
• You want your giving organized in one place
• You want to donate now but choose specific charities later

It removes stress and keeps your giving simple.

How to Choose the Best Option

You don’t need to use all three — just choose the one that fits your situation.

Here’s a quick guide:
If you’re 70½ or older

Giving directly from your IRA is often the easiest and most helpful choice.
If you own investments you’ve held for a long time

Donating them instead of cash may help you avoid taxes you’d face if you sold them.
If you want to plan your giving over time

A donor-advised fund keeps everything organized in one place.

Each of these options lets you support the causes you love while also helping your retirement dollars stretch further.

Is Smart Giving Right for You?

Most people give because it feels good — and because they want to help others. Smart giving simply helps you do more good with the money you were planning to donate anyway.

Here are a few questions to consider:

• Do you want your donations to have the biggest possible impact?
• Do you want simple ways to potentially lower your taxes?
• Do you want to support causes you care about in a thoughtful, meaningful way?

If so, smart charitable giving can help you combine generosity with financial peace of mind.

The Bottom Line

You don’t have to give more — you just have to give smarter.

By choosing the right type of year-end giving, you can:

• Support organizations you care about
• Keep more of your income
• Reduce financial stress in retirement
• Enter the new year feeling confident and generous

A few thoughtful steps before December 31 can make a meaningful difference.

Tootsie’s Takeaway

“Give from the heart — and give in a way that helps you too.”

Authored by Brent Meyer, founder and president of SafeMoney.com, with over 20 years of experience in retirement planning and annuities. Learn more about my extensive background and expertise here.

Disclaimer: SafeMoney.com provides financial education only. For guidance on your specific situation, consult a licensed professional.

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