Easy Ways to Make Year-End Giving Impactful
The spirit of giving and generosity that defines the Kitsap Community remains as steadfast as ever. Each day, we are witness to the incredible outpouring of love and care from our community members, and it warms our hearts. It's a testament to the indomitable spirit that resides within our community, a spirit that believes in the power of unity and the positive impact that we collectively create.
In this year-end giving guide, we'll explore various ways in which you can contribute to the causes that matter most to you. Together, we can continue to foster positive change in our community, and ultimately, leave a legacy of compassion and generosity that will endure for years to come.
Join us in embracing the spirit of giving as you explore some wonderful opportunities for year-end giving in 2023:
Donate appreciated non-cash assets instead of cash.
Did you know that donating appreciated stocks can be a tax-smart way to give? By gifting stocks to Kitsap Community Foundation or your favorite nonprofits, you can avoid capital gains taxes on the appreciation and receive a charitable deduction for the full market value of the stock. This means you can maximize your impact while minimizing your tax liability. Your stock gift can support vital programs and initiatives, creating lasting change in our community. Learn more by clicking here.
Maximize charitable impact and minimize taxes by donating appreciated non-cash assets (publicly traded securities, restricted stock, and private business interests) held longer than one year. Eliminate the capital gains tax (typically 15-20%) otherwise incurred if assets are sold first and then proceeds donated.
Consider establishing or using a donor-advised fund account, making tax-deductible contributions before year-end, and deciding on grant recommendations next year and beyond.
One powerful way to give smartly is through Donor-Advised Fund (DAF) grants. By leveraging your DAF, you can make a difference in our community while enjoying immediate tax benefits and the flexibility to support multiple causes over time. If you don’t yet have a DAF, reach out to Kitsap Community Foundation and we can help you set one up before the end of the year. If you already have a DAF outside of KCF, you can recommend a grant through Kitsap Community Foundation, directing your gift to the organizations and initiatives that align with your philanthropic goals. It's a win-win for you and the organizations that you care about. Learn more by clicking here.
Any contributions of cash or non-cash assets received by December 31 are eligible for a 2023 tax deduction. Donors may then take time to develop a strategic giving plan and recommend grants to charities in 2024 using the charitable dollars set aside in 2023.
Satisfy an IRA Required Minimum Distribution (RMD) through a Qualified Charitable Distribution (QCD).
If you are 70.5 years or older and have an Individual Retirement Account (IRA), you have the opportunity to make a Qualified Charitable Distribution (QCD). QCDs allow you to donate directly from your IRA to Kitsap Community Foundation, satisfying your required minimum distribution while reducing your taxable income. This tax-smart strategy empowers you to support the causes you care about most while enjoying potential tax advantages. It's a meaningful way to make a difference while optimizing your retirement savings. Learn more by clicking here.
Individuals aged 70.5 and older can direct up to $100,000 per year from their traditional IRAs to operating charities through QCDs. The QCD can be used to satisfy all or part of the donor’s RMD for 2023 and is not considered taxable income for the donor. Note: two individuals who submit tax returns with married filing jointly status each qualify for an annual QCD of up to $100,000. A donor wishing to make a 2023 Qualified Charitable Distribution should submit the request by the end of November to ensure the gift is received by December 31.
Donate cash from the sale of depreciated securities.
In a process called tax-loss harvesting, capital losses can be used to offset capital gains and up to $3,000 of ordinary income. Donors can then claim a charitable deduction if they donate cash from the sale proceeds.
Use a part-gift, part-sale strategy to offset capital gains tax from investment portfolio rebalancing at year-end.
Reduce the tax impact of rebalancing their portfolio by claiming a charitable deduction for donating appreciated assets in an amount that offsets the capital gains tax on selling appreciated assets.
Contribute appreciated real estate and continue to use it.
Contribute your residence, vacation home or farm now, while retaining the right to use and occupy the property for life. At your death, the charity gifted the real estate will own the property in its entirety. Note: contributions of real estate require special steps and additional time, including a qualified appraisal of the assets.
In a charitable bargain sale, you sell your real estate or securities to a charity for less than fair market value. The difference between market value and the purchase price represents your donation, which qualifies for an income tax deduction and is exempt from a capital gains tax. Note: contributions of real estate require special steps and additional time, including a qualified appraisal of the assets.
Tax deduction limits.
For donors who itemize deductions when filing their annual tax returns: overall deductions for donations to public charities, including donor-advised funds, are generally limited to 50% of adjusted gross income (AGI). The limit increases to 60% of AGI for cash gifts, while the limit on donating appreciated non-cash assets held more than one year is 30% of AGI. Contribution amounts in excess of these deduction limits may be carried over up to five subsequent tax years.
Donors who itemize rather than take the standard deduction typically do so because the total of their itemized deductions exceeds their standard deduction amount. Inflation-based adjustments pushed standard deduction amounts for 2023 to new highs: single filers may claim a $13,850 standard deduction, while married couples filing jointly can claim a $27,700 standard deduction.
And a bonus item...
The gift that doesn't come wrapped in shiny paper but holds immeasurable value for your loved ones - a WILL.
This year-end, consider the most thoughtful gift for your family – a completed will. A completed will provides:
PEACE OF MIND: Ensure your loved ones’ financial security and protect their future. A will gives you control over how your assets are distributed.
PROTECTION OF FAMILY AND PETS: Carefully selecting and naming guardians for your children or pets and providing clear instructions eases the emotional burden during difficult times.
FAMILY HARMONY: Avoid potential disputes and conflicts among your heirs and beneficiaries by clearly stating your wishes, while sparing your loved ones from the stress of unnecessary legal complexities and potential disputes.
MINIMIZE TAXES: Proper estate planning can help significantly reduce the tax burden on your estate, and potentially free up funds to support your favorite causes.
LEGACY OF LOVE: Leave a lasting legacy by supporting causes dear to your heart. Naming your favorite causes in your will—either directly or through the Kitsap Community Foundation—ensures that the mission that speaks to your heart will endure beyond you.
Don't wait. DRAFT YOUR WILL FOR FREE USING FREEWILL.COM, A PARTNER OF KITSAP COMMUNITY FOUNDATION. Click here to start today.
As we approach the close of another year, we thank you for joining us in the spirit of giving and reflecting on the power of our collective goodwill. Please be aware that charitable contributions received by December 31 qualify for charitable deductions on 2023 tax returns; some non-cash asset contributions have review and processing times spanning several weeks or longer. As always, please consult your advisor for additional information.
Should you have any questions about the above information, please don’t hesitate to reach out to us at email@example.com or (360) 698-3622. Our mission is to be a catalyst for the greater good, and we’re here to help!