Five Ways to Maximize Your End-of-Year Philanthropy

Red balloons shaped like hearts float into a pretty blue sky.

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published 1 December 2024

The end of the year is a time to reflect on the past and make positive changes moving forward. It’s also a time when many generous Americans think about giving back to the causes they care most about.

But amid the holiday season's crunch, many donors fail to make a thoughtful plan for their philanthropy. They may see a cause their friends and family are supporting and quickly volunteer to open their wallets — and though any act of generosity is commendable, donors can make the impact of their charitable giving go further by being strategic in their approach.

If you’re considering giving back this holiday season, here are five tips to help you maximize your gift's impact and ensure that you’re taking every advantage available to you.

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1. Align giving with your core values

It might seem tempting to give to the latest cause du jour, but ask yourself: Does the organization you’re giving to comport with your core values? Sometimes, organizations most visible during high-profile tragedies have a broader mission at odds with your deeply held beliefs. Or the organization might have taken some stances you’re unaware of and would otherwise be uncomfortable with.

Before you decide to give, list the causes you’re most passionate about and the values that must accompany your giving.

2. Evaluate the charity

In the United States, there are 1.97 million nonprofit organizations. With so many options, donors must do their due diligence to ensure they give to highly reputable organizations that effectively serve their causes, not enrich their leadership or serve as a PR platform. Consider consulting a resource like Charity Navigator, which rates organizations on a scale of one to four across various metrics, such as finance and leadership. You can also use it to connect you to the best charities aligned with your core values.

3. Consider making a recurring donation

Charities can better use your dollars when they know they have a recurring source of revenue. Consider making a monthly or multi-year donation, which is important for nonprofits looking to fund capital campaigns or other significant endeavors.

4. Maximize tax benefits

We all know it’s better to give than receive, but who wouldn’t want the bonus of writing off some of your tax liability? For 2024, the maximum cash contribution you can deduct is 60% of your gross adjusted income (AGI) and 30% of AGI for appreciated non-cash assets, for taxpayers who itemize deductions on Schedule A.

High earners can consider additional strategies, such as creating a charitable remainder unitrust (CRUT) or charitable remainder annuity trust (CRAT), either of which allows an individual to receive a tax deduction now for future donations of assets contributed to a charity via an irrevocable trust while also generating income for their own use, or by starting a donor-advised fund (DAF), allowing a tax filer to write off donations into the DAF while doling out grants at their convenience later on, which might enable a larger deduction in one tax year.

5. Give back in other ways

Though every charity requires funding, donating your time can help strengthen your commitment to a cause. In addition to writing a check, consider other potential ways to give back. Do you have a skill that might be of use to the organization? Pairing financial giving with volunteering is also a good way to create relationships that can further your future business and philanthropic endeavors. I’ve known many people, who after starting as a regular volunteer, began to become more involved in the organization, rising to the level of a board member — roles that have had a profoundly positive impact on their lives.

Philanthropy is personal. Everyone has a different reason for giving to a particular charity. Sometimes, they give to a nonprofit focused on issues that have impacted their lives or those of their loved ones. Other times, though, they may not have a personal connection, they see a problem in their communities and are inspired to make a difference.

Whatever your reason, you can make your end-of-year gift go even further by taking a few simple steps:

Identifying a reputable charity that aligns with your values
Structuring the donation to best fit the needs of the organization
And pairing your financial gift with something even more valuable — your time

With some planning and foresight, you can make the holiday season more cheerful for the causes nearest and dearest to your heart.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Building on her 20-year career in financial services, Emily Glassman is Director of Strategy at Ballast Rock Private Wealth, where she helps the firm engage with clients to develop an overall financial strategy, manage their investments and execute on their wealth management plans. Before joining Ballast Rock, Emily served as Co-Head of Business Development at Artivest. Previously, she was Vice President, Client Service at BBR Partners, having started her career in institutional equity derivative sales at Goldman Sachs.