By far, the most popular time to make a charitable donation is November and December, also known as the Giving Season. At Community Foundation of Acadiana (CFA), we are ready to assist you or your professional advisor in thinking strategically about how you give and how to make our community a better place to live. We work to ensure that your donations make the greatest impact while maximizing your tax advantages. Even with the increased standard deduction, there are still tax-wise ways you can give to your favorite causes.
You may be planning to contribute to your existing fund at CFA, or you may be considering establishing a new fund. We want you to know that it’s a very simple process to create a fund with CFA to support causes you care about, whether it’s a donor-advised fund, a fund that is designated to support a specific nonprofit, a field of interest fund, or even a scholarship fund. You can establish a fund with simple assets or more complex assets like real estate or business interests (please note, funds can be established quickly, but complex gifts take longer to transfer to CFA). For any transfers to qualify for a charitable tax deduction in 2023, it must be received by December 31.
4 Options to Consider for Year-End Giving:
1) Donor Advised Funds (DAFs):
DAF’s are a great tool to claim a tax deduction now to support your favorite causes in the future. DAF’s can be created quickly and easily with a quick meeting or via email. With a gift of appreciated stock or mutual funds, you avoid paying capital gains tax on the sale of the stock and receive an immediate charitable income tax deduction.
Bunch multiple years of gifts to a DAF:
With increased standard deduction ($13,850 for individuals, $27,700 for couples for 2023), it may be difficult for some people to receive a tax benefit from charitable giving each year. A solution to this challenge is to bunch multiple years’ worth of donations into a gift to a DAF at CFA. You’ll get the full tax deduction now, while spreading out grants to your favorite nonprofit organizations over time, benefiting from the larger standard deduction in those later years. Don’t have a DAF? No problem. We can easily set up a DAF for you, no meeting necessary. For more information, you can review the bunching document by clicking here.
2) Consider gifts of appreciated stock or mutual funds:
If you have stocks or other publicly traded securities that are worth more than what you paid for them, consider using these for your charitable giving this year. Appreciated stock and mutual funds can offer a more cost-efficient deduction, based on current fair market value, not your cost basis. CFA can accept marketable securities of any kind. We recommend initiating year-end mutual funds and stock gifts by December 19. Securities must be received into CFA’s account by 12/31/23 to be treated as a 2023 charitable gift.
3) Use your required minimum IRA distribution for giving, skip the taxes:
If you are age 70 ½ or older, charitable IRA rollovers allow donors to avoid paying income taxes on their required minimum distribution while supporting their favorite charities. These tax-free rollovers can benefit any public charity, however, due to IRS rules, they can’t be donated to a DAF. You may contribute qualified charitable distributions to any of our non-donor advised funds, or we can help you set up a new fund that benefits an interest area of your choice or a specific nonprofit.
4) Consider making a mandatory distribution into your account at CFA:
All or part of a private (family) foundation's annual mandatory distribution can be accepted into an account here at CFA.
Interested in making a contribution or starting a fund?
CFA accepts cash, securities, property, and a variety of other assets. We will work with you to make sure your contributions are received by the year’s end. To make a contribution or start a fund, contact CFA at 337.769.4848. For specific tax questions, please contact your personal tax advisor.
Working with CFA gives you access to our extensive knowledge of the local nonprofit community and the broad charitable needs of our region. We are happy to discuss any options for accomplishing your charitable giving.