In the flurry of holiday activities including end-of-year work responsibilities, travel and preparing for company; making last-minute charitable gifts can seem rushed and disorganized. At the very least, it can seem less peaceful and fulfilling than a Norman Rockwell Christmas scene. A quick call or visit to your CPA or financial advisor can provide the precise dollar amount to maximize your charitable giving, but that could still lead to rushed decisions about which of your favorite organizations should receive what size gift. As I have said before, end-of-year charitable giving is difficult to do both quickly and well.
I would suggest that doing charitable giving quickly at the end of the year is not as enjoyable as doing it well throughout the year. To their credit, for many individuals and business owners who try to be good stewards of their resources, the end of the year is the only window of time when their annual financial picture is finally clear. For eleven months of the year, they grapple with questions like, “Will we turn any profit this year?” or “Will we end the year with anything to spare?” Only in mid-to-late December does it become clear that indeed there may be a surplus, and those individuals can turn their attention toward how much and where they can give. A hard tax deadline of December 31 means charitable giving is added to a frenzied holiday pace, and much of the joy can be lost.
If this sounds like your end-of-the-year giving routine, I would like to offer a tool for you to consider to make your giving in 2024 more enjoyable. It is not a secret. Nearly 2 million people used this tool in 2022 to help them manage their charitable giving. Perhaps a good New Year’s resolution for you is to heed this advice to make 2024 a much more enjoyable year for charitable giving. It’s very simple. Set up a donor-advised fund.
Here are three simple reasons to have a donor-advised fund: it can help organize your philanthropy; it can lay the groundwork for testamentary giving; and it can restore the joy of end-of-year giving. After the holidays, stores remove the trees and decorations from the shelves and replace them with pallets full of plastic storage containers so we can organize our decorations for next year. In the same way, a donor-advised fund can keep your charitable giving neatly organized in a central location. At ETCF, you can review your charitable giving online 24 hours a day and initiate grants to your favorite charities. Our staff can also help you consider current charitable opportunities or help you make a complex gift such as a gift of securities, business interests or real estate. ETCF, or other donor-advised fund sponsors such as Fidelity Charitable Gift Fund or National Christian Foundation, can handle the administrative responsibilities of your fund so you can focus on the organizations you want to support and the work they are doing in your community or around the globe.
A donor-advised fund can also be used to lay the groundwork for testamentary giving by encouraging you to consider a succession plan for your fund. We will help you think through a simple testamentary plan for the balance of your fund, and consider how your fund can help you achieve a broader charitable legacy, perhaps including your children along with your favorite charities.
Finally, by having a donor-advised fund set up before year-end, holiday giving can be easier and more enjoyable. When your CPA or financial advisor gives you your year-end outlook in December and suggests a level of charitable giving that you should consider to maximize your tax benefits, your donor-advised fund can quickly receive the contribution of cash or securities, even in the middle of the holiday hustle and bustle. Grants to your favorite charities can then take place at a more calm and peaceful pace throughout the year. Even if you end up using a donor-advised fund sponsor other than ETCF, I would still enjoy talking with you about why donor-advised funds are such useful tools for charitable giving and whether establishing one might be your next best opportunity to ring in the new year and give well.