When Year-End Giving Meets an Uncertain Year-End 

Roller coaster, inflationary, illogical…just a few words you may have heard to describe the recent swings in economic indicators. Even the optimists among us seem to be bracing for rough waters ahead. Times like this create a troubling dichotomy – resources are scarce when our community needs philanthropic support the most. What are you thinking about your giving as we approach the end of this tumultuous year? 

“I’ve been very fortunate this year and might need to address gains in income.” 

Congratulations! This may be a year that you consider “bunching” your annual contributions into one year, using a donor-advised fund for this strategy. Donations to a donor-advised fund, or DAF, are tax-deductible, and by making a larger gift, you may achieve tax benefits while reaching your charitable giving goals over time. 

To illustrate this point, a married couple without children typically donates $10,000 to charity each year. The Standard Deduction Amount for a married couple filing jointly is $25,900, and their other itemized deductions come to $10,000. They would take the $25,900 Standardized Deduction, forgoing any tax benefit on the charitable donation. If a larger gift is made to charity this year, such as $30,000 to a DAF, and $10,000 is available with other itemized deductions, they could reduce taxable income by $14,100. 

 Without Bunching Bunching Donations with a DAF 
Charitable Deduction $10,000 $30,000 
Other Deductions $10,000 $10,000 
Standardized Deduction $25,900  
Itemized Deduction  $40,000 
Difference in Deduction from Taxable Income $14,100 

By bunching the contributions, you can benefit from a larger deduction and grants can be recommended from the DAF in future years.  

Another way to approach bunching is to pre-pay multi-year pledges. Or if there is a charity you regularly support, you can double their gift this year, and inform them of your intention. You may still receive a fundraising request from them next year, so keep a record of it for yourself. 

“I’m not swayed by the headlines or “what if” scenarios. We’ll give like we always do.” 

That’s great! But don’t neglect taking advantage of tax efficiencies when they are available. Be mindful of the right asset to give. Donating long-term appreciated assets and appreciated securities can reduce or eliminate capital gains tax. If you are 70 ½ or older, you can make a Qualified Charitable Distribution (QCD) transferred from your IRA to one or more qualified charities, and the amount (up to $100,000) won’t be included in taxable income. This can be especially attractive once you are 72 and you have a Required Minimum Distribution (RMD) from your IRA.  

“I’m concerned that my favorite nonprofit will have serious difficulty surviving through a recession if it comes and I’m not comfortable giving to a nonprofit that is on the brink of folding.” 

This is a common sentiment with a variety of responses, none of which are “right” or “wrong.”  

If you are feeling this way, pause and assess if your concern is valid. Are their assets liquid? Has the organization weathered previous economic downturns? Is it led by staff and board leaders who have demonstrated resilience in the past? Have they communicated anything with you that signals a crisis? It’s natural to imagine the worst-case scenario, but the worry may be misplaced. Consider what would happen to the community if your favorite charity lost funding. They may need support now more than ever and pulling back could fuel a decline. 

Also, reflect on your motivations for giving. If the organization in question is fulfilling your passion, it might be time to increase your support to help them weather the storm. However, if your concerns about survival are substantiated and you can meet your charitable goals through other charities, it could be time to shift your donations.  

I’m here to help when you have questions or concerns about charities you support or are looking for ideas of where to give. My work includes research and due diligence related to your philanthropy so that you can feel confident in meeting your philanthropic goals.  

The entire Heritage team will work to support you in making decisions that best reflect the purpose of your giving. 


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Heritage Wealth Advisors is an SEC-registered investment advisor. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Heritage. Heritage is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of Heritage’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at heritagewealth.net.

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