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As the end of the year approaches, many donors look for ways to support the causes they care about while also taking advantage of available tax benefits. Here at the Foundation, whether through helping explain the benefits of a donor-advised fund, processing gifts of appreciated stock, or identifying giving opportunities that are meaningful to you, we're here to help you make the most of your philanthropy. Below are strategies to maximize the community impact and tax efficiency* of your giving.
Use a Donor-Advised Fund for Strategic Giving
A donor-advised fund (DAF) allows you to make a charitable contribution and receive a tax deduction in the year the gift is made, while recommending grants to nonprofits over time. A DAF can be especially helpful if you experience an unusually high-income year, sell a business, receive a large bonus, or simply want to organize your giving in a more intentional way.
Give Appreciated Stock Instead of Cash
If you own stocks, mutual funds, or other publicly traded securities that have increased in value, donating them directly to a charitable fund or nonprofit organization can be one of the most tax-efficient ways to give. In many cases, donors may receive a charitable deduction for the full fair market value of the asset and avoid paying capital gains taxes on the appreciation. This allows more of your gift to support charitable causes. The Foundation provides stock processing services.
Consider a Qualified Charitable Distribution (QCD)
For individuals age 70½ or older, a Qualified Charitable Distribution allows funds to be transferred directly from an IRA to a qualified charity. QCDs may help satisfy Required Minimum Distributions while reducing taxable income, making them a valuable giving tool for many retirees. QCDs must be made directly to qualifying charities and cannot be directed to a donor-advised fund.
Bunch Multiple Years of Giving
Some donors choose to combine several years' worth of charitable giving into a single tax year. This strategy can increase available deductions in years when income is unusually high while allowing charitable support to continue over time through a donor-advised fund or other charitable vehicle.
Remember Year-End Deadlines
Many charitable gifts, particularly gifts of stock, IRA transfers, and other non-cash assets, require additional processing time. Starting early can help ensure your gift is completed before December 31 and qualifies for the current tax year.
To learn more about how the Yampa Valley Community Foundation can help you explore giving options and achieve your charitable goals, visit yvcf.org/ways-to-give or call to arrange a meeting with our Philanthropic Services team.
*Because each donor's financial and tax situation is unique, we encourage you to consult your tax, legal, and financial advisors before acting on any strategy discussed in this publication. The Yampa Valley Community Foundation does not provide tax or legal advice.
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