When Purpose Meets Planning

For some clients, it reflects long-standing values rooted in family, faith, or community. For others, it becomes more of a priority later in life as they look to define what kind of legacy they want to leave behind. Regardless of motivation, thoughtful giving can be both emotionally meaningful and financially efficient when integrated with a broader plan.

When I talk with clients about charitable giving, I start with their intent. Who or what do they want to support, and why? The “why” often matters more than the dollar amount. A well-considered charitable strategy can align giving with personal values, rather than reacting to end-of-year appeals or tax deadlines.

There are different ways to structure charitable gifts, depending on someone’s goals and resources. Some prefer to give directly to organizations they care about. Others explore

tools like donor-advised funds, which allow donors to contribute assets, receive a tax deduction in the year of the contribution, and then recommend grants over time. A donor-advised fund can be a helpful way to separate the decision to give from the decision of where to give.

Qualified charitable distributions (QCDs) are another option for clients over age 70 1/2 who own traditional IRAs. With a QCD, up to $100,000 per year can be transferred directly from an IRA to a qualified charity. This transfer can satisfy all or part of a required minimum distribution (RMD) and may reduce taxable income. QCDs are not available from 401(k)s or other employer-sponsored plans, only from IRAs1. https://www.irs.gov/newsroom/reminder-to-taxpayers-age-70-1-2-or-older-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity

There are also clients who want to make larger, long-term commitments to charitable causes. In these cases, private foundations, charitable remainder trusts, or naming charities as beneficiaries of retirement accounts may be considered. These tools come with legal and administrative responsibilities, so they are typically used in coordination with attorneys and tax professionals.

In 2023, Americans gave an estimated $557 billion to charity, with individuals accounting for 68 percent of total giving. Religious, educational, and human services organizations received the largest shares2. https://givingusa.org/giving-usa-2024-americans-gave-557-16-billion-to-charity-in-2023/

While tax considerations are part of the conversation, they are not usually the primary motivation. Many clients I work with give because they care, not because they expect something in return. Still, when charitable giving is structured thoughtfully, it can also provide financial flexibility, particularly for those managing large RMDs or planning for estate taxes.

Charitable planning is not just about how much to give. It is about how to give in a way that reflects personal purpose and financial responsibility. The most effective plans tend to be intentional, not impulsive, and are revisited periodically to stay aligned with both life changes and the needs of the causes being supported.