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 Philanthropy

Invest in Your Giving

Before writing that check, consider donating appreciated stock to your fund at Greater Houston Community Foundation. Not only can you claim a charitable tax deduction, but you may also avoid capital gains tax when the Foundation sells the shares. Reach out to us to learn more about this tax-savvy giving technique! 

Donors are encouraged to explore creative gifting options that can help them reach their charitable goals while reducing tax liabilities. For instance, donating appreciated stock may avoid capital gains taxes when the 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. Another option is to donate retirement assets, like an IRA or 401(k), which can help lower your taxable income. By considering these innovative giving strategies, you can amplify your charitable impact and potentially minimize your tax burden. 

Continue reading: What is a donor advised fund?

Stay Ahead of 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 

Make the Most of Your IRA 

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 Foundation. By doing so, you can potentially avoid income tax on the distributed funds. Our team can help you navigate the rules and determine if QCDs are right for you. 

Continue reading: What Are Qualified Charitable Distributions?

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 simply default to naming your children or revocable trust as the secondary beneficiary. As you and your advisors evaluate whom to name as a secondary beneficiary of these tax-deferred accounts, 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 bequest like this avoids not only estate tax, but also 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 or other type of fund at the 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. 

A Holistic Approach to Philanthropy 

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 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 to start deepening your philanthropic efforts.  

More Helpful Articles by Greater Houston Community Foundation: 

• The Importance of Charitable Giving in Financial and Estate Planning
• How to Start a Scholarship Fund
• Building Community Resiliency: Our Disaster Response Journey
• The Balance Between Recognition and Anonymity in Philanthropy: Which one’s for you? 

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