Give Back, Get Ahead: Mid-Year Strategies to Amplify Your Charitable Impact 

As the summer sun shines bright, we’re reminding you to take a closer look at your charitable giving strategy. At Greater Houston Community Foundation, we’re committed to helping you make the most of your philanthropic efforts. With our guidance and expertise, you can turn your charitable aspirations into a lasting impact that benefits the community you love. 

From maximizing your tax benefits to planning your legacy, we highlight mid-year reminders to help you stay on track with your giving strategy and equip you with actionable and practical guidance to amplify your charitable impact. As we embark on the year’s second half, it’s essential to remember that charitable giving is an ongoing process, not just a seasonal event.

Maximize your giving: how to give to charity effectively

Charitable gift types for tax savings

Donors are encouraged to explore creative gifting options that can help them reach their charitable goals while reducing tax liabilities. Before writing that check, consider donating appreciated stock to your fund at Greater Houston Community Foundation. Not only can you claim a charitable giving tax deduction, but donating appreciated stock may allow you to avoid capital gains taxes when the Community Foundation sells the shares. 

Additionally, contributing real estate—such as a vacation home or investment property—can provide a tax deduction based on the property’s fair market value. Some other gift types that often have benefits include:

• Business interests
• Closely traded stock
• Coins, jewelry, and art
• Life insurance policies
• Privately held assets
• Publicly traded stocks, bonds, and securities 
• Real estate
• Retirement assets

Donating retirement assets, like an IRA or 401(k), can help lower your taxable income—but strategically giving many of the previous gift types may help you to further reduce your tax liability. By considering these innovative giving strategies, you can amplify your charitable impact and potentially minimize your tax burden. 

Continue reading: How do donor advised funds work?

Plan for the estate tax exemption sunset

As the estate tax exemption is set to decrease in 2026, it’s crucial to plan and explore charitable giving strategies to minimize estate tax. We can work with you and your advisors to create a customized plan that meets your financial and philanthropic goals. 

In 2024, the exemption stands at $13.61 million per individual or $27.22 million per married couple, thanks to adjustments for inflation. However, without legislation to prevent it, this threshold is set to plummet in 2026, reverting to 2017 levels, adjusted for inflation, which would roughly total $7 million per person. 

This drastic reduction in the estate tax exemption has significant implications for individuals and families alike. For many, it will mean increased exposure to estate tax and potentially devastating financial consequences. But with careful planning and strategic philanthropic giving, you can mitigate these risks and create a legacy. 

The window of opportunity to plan and adjust your estate strategy is narrowing. By working closely with our team and your advisors, you can: 

• Identify opportunities to minimize estate tax 
• Develop a customized plan that aligns with your financial and philanthropic goals 
• Make informed decisions about your estate’s future

Continue reading about the relationship between estate planning and charitable giving

Make the most of your retirement accounts with Qualified Charitable Distributions

If you’re over 70 ½, you can use Qualified Charitable Distributions (QCDs) to direct up to $105,000 from your IRA to certain charities, including your fund at the Community Foundation. By doing so, you can potentially avoid income tax on the distributed funds. Our team can help you navigate the rules of QCDs and other charitable giving tax strategies to determine if they’re right for you. 

Continue reading: What are Qualified Charitable Distributions?

*Although the IRS does not permit QCDs to be made to donor advised funds, you can likely make distributions to designated funds and field-of-interest funds available at Greater Houston Community Foundation.

Review your IRA beneficiary designations

As you review your assets and estate plan, don’t forget to evaluate your IRA beneficiary designations. While it’s common to name your spouse as the primary beneficiary to ensure a steady income stream or comply with legal requirements, don’t automatically default to naming your children or your revocable trust. 

Naming a charity as a secondary beneficiary can provide a tax-efficient and streamlined way to make gifts to your favorite causes upon your death. A charitable bequest  avoids estate tax and income tax on the retirement plan distributions. By leveraging this tax-advantaged strategy, you can achieve a significant impact on the causes you care about while minimizing the burden on your loved ones. 

In contrast, non-retirement fund assets may be better suited to pass to children and grandchildren, as they are typically not subject to the same tax implications. By carefully evaluating your IRA beneficiary designations and considering alternative strategies, you can ensure that your estate plan is optimized for both tax efficiency and charitable giving.

Plan for your business exit

If you own a private business, keep in mind that charitable giving can play a crucial role in your exit strategy. By transferring shares to your donor advised fund or other type of fund at the Community Foundation, you may avoid capital gains tax and claim a charitable income tax deduction.  

One key benefit is the avoidance of capital gains tax, which can significantly impact your profits upon the sale of your business. When you transfer shares to a donor advised fund, you may avoid this tax burden, as the capital gains tax will be triggered only when the shares are sold from the fund.

Additionally, by transferring shares to a donor advised fund, you may be eligible for a charitable income tax deduction in the year of the transfer, based on the fair market value of the shares. This means you could potentially claim a larger deduction than if you had transferred the shares to a private foundation. Keep in mind that a strategy like this only works with careful planning, so be sure to contact our team of philanthropic advisors well in advance of setting a plan in motion. With our expertise and guidance, you can create a seamless and tax-efficient plan that achieves your charitable and financial objectives.

Optimize your charitable giving strategy with Greater Houston Community Foundation

At Greater Houston Community Foundation, we offer a range of fund types, services, and ways for you and your family to get involved with the community you love. Let us help you create a customized charitable giving strategy that aligns with your values and goals. From donor advised funds to designated funds and bequests, we’re here to support your philanthropic efforts every step of the way. 

Discover how Greater Houston Community Foundation can assist you in maximizing your impact. Reach out to us today at 713-333-2210 or send us a message directly to start deepening your philanthropic efforts.  

More Helpful Articles by Greater Houston Community Foundation: 

• How To Preserve Generational Wealth
• Benefits of Starting a Private Foundation
• How To Get Started with Legacy Giving
• The Importance of Charitable Giving In Financial Planning
• How to Start a Scholarship Fund

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