Case study: Charitable giving in a down market

As you guide your clients through ongoing market uncertainty, you may be noticing that conversations are becoming as much about perspective as they are about performance metrics. While headlines may or may not ultimately signal a prolonged downturn, the mere possibility of a bear market can influence how clients think about everything from their retirement timelines to their charitable giving. As a trusted advisor, you have a unique opportunity to help clients stay grounded and intentional, even when emotions are running high.

At Kitsap Community Foundation, we see firsthand how market volatility can cause even the most generous donors to pause. However, we also see how strategic planning can turn a moment of uncertainty into a moment of profound community impact. By reframing the conversation, we can help your clients move from a mindset of scarcity to one of strategic generosity.

Consider this scenario

When David and Laura arrive at your office for their annual planning meeting, the tone feels different from prior years. In their early 70s and recently retired, David and Laura have always approached financial decisions with a long-term mindset. But today, Laura opens the conversation with a note of concern.

“We’re not panicking,” she says, “but it’s hard to ignore what’s going on in the markets. It just feels unsettled.”

You nod. You’ve been hearing similar sentiments from many of your clients. Even when portfolios remain relatively strong, uncertainty alone can create significant stress. Studies have consistently shown that financial concerns weigh heavily on emotional well-being across generations, and market volatility tends to amplify those feelings of unease.

As you walk through David and Laura’s portfolio and estate plan, the numbers tell a reassuring story. Their overall financial plan is still on track, and their estate plan still accurately reflects their goals. But you recognize that this moment calls for more than just statistical reassurance. It is an opportunity to reframe how charitable giving fits into the broader picture of their lives and our Kitsap community.

“You’ve both been incredibly consistent in your support of local organizations,” you say. “Tell me how you’re feeling about giving this year.”

David pauses. “We still want to give,” he says. “We just don’t want to make a mistake if the market gets worse.”

Reframing the "Down Market" hesitation

That hesitation is familiar to all of us. Rather than pulling back entirely, many clients simply need a way to move forward with confidence. As an advisor, you can provide the clarity they need by introducing strategies that remain effective regardless of what the Dow or S&P 500 did yesterday.

You start with a simple reminder: “Not all stocks are down.”

Even in a turbulent market, individual sectors or specific holdings often maintain or even increase in value. You point to a portion of David and Laura's portfolio that has performed well over the last several years. These appreciated positions present a significant opportunity. By contributing long-term appreciated stock to their donor-advised fund at Kitsap Community Foundation, David and Laura may be able to avoid capital gains tax while supporting the causes they care about. Even in a volatile market, this strategy remains one of the most tax-efficient ways to give.

Laura leans in. “So even now, that still makes sense?”

“It often does,” you reply. “And it can give you incredible flexibility. You can make the gift now, receive the immediate tax benefits, and then take your time recommending grants to your favorite nonprofits over the coming months or even years.”

Why community needs don't pause for market cycles

The conversation begins to shift. Instead of focusing solely on uncertainty, David and Laura are now thinking about their options. This is the moment to bridge the gap between their financial strategy and their personal values.

You gently raise another point: “Market cycles come and go, but community needs don’t pause.”

We know that periods of economic strain often increase demand for nonprofit services. In our Kitsap region, this is particularly true for households already feeling the effects of inflation and rising costs. Whether it is food security, housing assistance, or mental health services, the organizations David and Laura support are likely seeing a surge in need exactly when donors might be feeling hesitant.

Kitsap Community Foundation is closely connected to these needs. We spend our days listening to local nonprofit leaders and monitoring the pulse of the region. We can help ensure that David and Laura’s giving is as impactful as possible by directing support where it is needed most right now.

Leveraging the Qualified Charitable Distribution (QCD)

Finally, you mention a strategy they have not yet utilized, but which is perfectly suited for their current stage of life.

“Because you’re both over 70 ½, we should also look at Qualified Charitable Distributions from your IRAs.”

You walk them through how a QCD could satisfy their required minimum distributions (RMDs) while avoiding income tax on those amounts. For the 2026 tax year, the limit for these transfers is $111,000 per taxpayer. For clients like David and Laura, it is a straightforward and effective way to continue supporting charitable priorities regardless of broader market conditions.

“You can direct your QCDs to certain types of funds at Kitsap Community Foundation,” you explain. “While current rules don't allow them to be added to your donor-advised fund, though legislation has been introduced to change that, you can use them to support our strategic priorities, field-of-interest funds, or unrestricted funds that help the whole Kitsap region thrive.”

A renewed sense of clarity

By the end of the meeting, David and Laura feel a renewed sense of clarity. They decide to move forward with a gift of appreciated stock to their donor-advised fund and explore a QCD over the summer to avoid the year-end rush. Just as importantly, they feel reassured that their charitable giving does not need to stop simply because the market feels unsettled.

Situations like this are increasingly common. Even the possibility of a downturn can shape client behavior, but it can also open the door to meaningful planning conversations. These discussions help keep charitable giving going strong across the Kitsap community, providing a vital lifeline to the organizations we all rely on.

Partnering with Kitsap Community Foundation

As always, Kitsap Community Foundation is here to help you navigate these discussions. Whether you are looking for more information on the technical aspects of DAFs or you need interactive donor tools to show your clients the potential impact of their gifts, our team is your partner in philanthropy.

We offer:

• Local Insight: Deep knowledge of the Kitsap nonprofit landscape to help your clients find the right match for their mission.

• Practical Strategies: Expertise in handling complex assets, from appreciated stock to real estate.

• Administrative Support: We take care of the receipts, reporting, and due diligence so your clients can focus on the joy of giving.

  
  

If you have a client who is feeling hesitant about their giving due to market conditions, let’s talk. We are honored to serve as a resource for you and your charitable clients in every type of market environment. Together, we can ensure that philanthropy in Kitsap remains a steady, empowering force for good.

For more information on how we support professional advisors, please visit our FAQ page or reach out to us directly. We are always available to help you identify the best approach for your clients’ unique financial and charitable goals.