Smart Giving & Strategic Planning: Your Year-End Guide
As holidays and the year-end draw near, you may feel inspired to give back, support causes and take stock of your financial goals. Whether you're making charitable contributions, gifting to loved ones, or reviewing your investment strategy, thoughtful planning now can make a meaningful impact for others and for your future self.
Cash Gifts: Simple, Powerful, and Appreciated
Outright cash gifts to qualified organizations are among the easiest and most effective ways to support nonprofits. These donations - especially when unrestricted - allow organizations to respond quickly to urgent needs. For example, food banks often partner with local suppliers to purchase pantry staples at steep discounts, meaning your cash donation can go much further than a bag of groceries.
Many nonprofits experience peak demand for their services during the fall and winter months. Giving during the holiday season helps fill critical funding gaps, especially for smaller, community-based organizations. And from a tax perspective, cash gifts are straightforward as they don’t require an appraisal, making them a hassle-free way to contribute.
Annual gifts of cash may also be made to children or other individuals in your life. In 2025, anyone can give up to $19,000 to each individual recipient without having to file a gift tax return.
Other Gift Options: Know the Rules
Creative gifting strategies, such as donating appreciated stock to a charity, can help you avoid capital gains taxes while supporting a cause you care about. If your child or grandchild has a 529 plan, that could be a convenient way to support their future education. If you're over 70½, a Qualified Charitable Distribution (QCD) from your IRA allows you to donate directly to a nonprofit, satisfying your required minimum distribution and reducing taxable income. If you're considering donating appreciated stock, real estate, or other property, be aware that non-cash gifts valued over $5,000 require a qualified appraisal. The IRS mandates that both the donor and the appraiser sign Form 8283, along with the receiving organization. These gifts can offer significant tax advantages, but they have documentation requirements. It’s wise to consult your tax advisor before proceeding with such gifts.
Is the Organization Qualified?
Before making any charitable gift, especially to a new or unfamiliar organization, verify its tax-exempt status. The IRS’s Tax Exempt Organization Search (TEOS) tool is a reliable resource, and sites like Charity Navigator can help you assess transparency and impact. In today’s digital world, where “Click Here to Donate” is everywhere, a quick check ensures your generosity goes where it’s truly needed.
Gifts to Your Future Self
Year-end planning isn’t just about giving to others; it’s also a chance to invest in your own financial future. If you’re receiving a year-end bonus, consider how it affects your tax situation. Deferring income might be strategic, or you might choose to allocate that bonus toward savings, debt reduction, or long-term goals.
Don’t forget to make final contributions to your retirement accounts, such as your 401(k), IRA, or Roth IRA. These contributions can help you take advantage of tax deferrals and employer matching, setting you up for a stronger financial future.
Strategic decisions made now can shape a healthier year ahead. Before making any charitable gifts or financial moves, consult with your advisor or tax specialist. Our team is here to help you make the most of your year-end giving and help you start the new year stronger than ever.
Kate McGinn, ATFA is a Trust and Charitable Services Officer. She received her Accredited Trust and Fiduciary Advisor (ATFA) certification from Campbell University. To speak with Kate, please contact our office at (503) 292-1041 or via email at info@allentrust.com.
Disclosure: The information provided in this writing is for general informational purposes only and does not constitute financial advice from Allen Trust Company and Allen Capital Management. Readers are encouraged to consult with a qualified financial advisor to assess their individual circumstances and make informed decisions based on their specific situation.