Strategic Charitable Giving: Maximize Your Impact and Tax Benefits

By Sarah Carlson, CFP®, CLU®, ChFC®

For the Journal of Business, Spokane, Washington

Charitable giving is more than generosity—it's a strategy. For Spokane's business owners and professionals, well-planned philanthropy not only helps address meaningful local needs but can also offer substantial tax advantages. Whether supporting youth programs, affordable housing, or environmental initiatives, the key is to give wisely: align your dollars with impact and utilize the tax code to stretch those dollars further.

Before donating, it's essential to verify that the organization is well-managed, financially transparent, and aligned with causes that matter to you. Look for charities with a proven track record, clear mission, and measurable results. Resources like GuideStar, Charity Navigator, and the IRS Tax Exempt Organization Search help verify an organization's legitimacy and efficiency.

For residents looking to give locally, consider working with community foundations or trusted nonprofits that have deep roots in the Inland Northwest. Organizations such as the Innovia Foundation, Women Helping Women Fund or Spokane County United Way can help match your philanthropic goals with real community needs.

Donor-advised funds (DAFs) are a versatile giving tool that allows you to contribute cash or assets into a charitable account, take an immediate tax deduction, and recommend grants to charities over time. It's like a charitable investment account that offers both convenience and control.

DAFs are especially useful for long-term giving strategies, year-end tax planning, or bundling donations in high-income years. They also simplify recordkeeping, especially when giving to multiple organizations. Many local wealth managers, as well as national firms like Fidelity Charitable and Schwab Charitable, can help you open and manage a DAF.

If you itemize deductions, charitable giving can offer significant tax savings. Here's how:

1. Cash Contributions: You can generally deduct up to 60% of your Adjusted Gross Income (AGI) when donating cash to qualified public charities. However, if the Tax Cuts and Jobs Act (TCJA) provisions are not extended, this limit may revert to 50% of AGI in 2026.
2. Appreciated Stock and Assets: For stocks or other investments held more than one year, you can donate the full fair market value without paying capital gains tax—and deduct up to 30% of your AGI. This is an especially effective strategy when you want to reduce a concentrated position in your portfolio and have significant capital gains in a holding. The deduction can then be carried forward to future years to receive a full write off from your gift.
3. Qualified Charitable Distributions (QCDs): If you're 70½ or older, you can transfer up to $108,000 annually from your IRA directly to a qualified charity. These distributions count toward your Required Minimum Distribution (RMD) but aren't included in taxable income—providing a double benefit.
4. Standard Deduction Reminder: To deduct charitable contributions, your gift amount is added to other eligible deductible expenses and  you must itemize. For 2025, the standard deduction amounts are:
   1. Single: $15,000
   2. Married Filing Jointly: $30,000
   3. Head of Household: $22,500

To qualify for a deduction, your gift and other eligible personal eligible expenses will need to exceed these limits.

1. Documentation Matters: Always keep receipts or written acknowledgments from the charity. For non-cash gifts over $5,000, a qualified appraisal is required to substantiate the donation.

Charitable giving should be more than just a feel-good gesture at the end of the year—it should be part of a comprehensive financial and community impact strategy. By carefully selecting effective organizations, utilizing smart vehicles like DAFs, and implementing efficient tax planning, you can give in ways that are both generous and financially prudent.

The opportunity to support Spokane's future is right in front of us—and the tax code provides the tools to make that support go even further.

For personalized guidance, consult your financial advisor, CPA, or a philanthropic specialist familiar with local and national giving options. Feel free to contact us at FulcrumFinancialGroup.com for a free consultation.

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Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual. 

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

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