Giving back is not just good for others — it feels great and fosters community and compassion! Whether dropping cash into a charity jar or volunteering at a local event, every act of kindness sprinkles a little extra joy in the world.

Worldwide Day of Giving on June 15 is a special occasion encouraging us to give back and contribute to our favorite charitable organizations, whether a church, university, or social group. As asset values increase, many find themselves more capable and interested in using their resources to benefit the world. As we set out to make a positive impact, let’s explore various ways to participate in charitable efforts and make the world a better place!

Appreciated Assets

Donating appreciated assets like stocks or real estate to a charity can avoid the capital gains tax you would have faced if you sold these assets yourself. The charity can then sell these assets tax-free. This arrangement not only maximizes the value of your donation but also allows you to contribute a significantly larger gift than if you had sold the assets and donated the post-tax proceeds.

Qualified Charitable Distributions

You can donate directly from your retirement account to a charity, which can count toward your required minimum distribution without being taxed. This way, the charity receives the entire donation amount, unlike a personal withdrawal, which income taxes would reduce.

Direct Gifts

Regardless of their net worth, many believe it is important to support charitable causes, either during their lifetime or through bequests after their death. It’s common for people to pledge a portion of their estate, often around 5%–10%, to charities that resonate with them. This approach allows them to contribute meaningfully to the causes they care about most, effectively giving back and paying it forward.

Donor-Advised Fund

In years when your income is unusually high, consider contributing more than usual to a donor-advised fund, which grows tax-free. You can then distribute funds to charities over time. This strategy allows you to make a significant donation and receive a tax deduction while continuing to support charitable causes. Keep in mind that involving your children and grandchildren in managing the fund can help pass on your charitable legacy. As the advisor, you’ll guide the annual grant recommendations, fostering a family tradition of giving.

Charitable Trust

Charitable trusts offer a sophisticated way to engage in philanthropy. By donating appreciated assets to a charitable trust, which then sells them tax-free, you can establish a stream of income for yourself or a designated beneficiary for life or a set number of years. This approach often results in a higher income stream than if you were to retain and sell an illiquid asset directly due to the tax advantages involved.