Empowering Change: Your 2023 Guide to Charitable Giving
10/5/2023
In a world filled with countless opportunities to make a difference, the act of giving has the power to transform lives, communities, and the very bones of society. Giving is about being a part of something greater than yourself; it's a force that binds us together in a shared commitment to positive change.
In 2022, Americans gave a staggering $499.22 billion to charities, showcasing that collective generosity can make a monumental impact. There are several ways to give to organizations dear to your heart, and we're exploring your options today.
Next, you'll need to decide on how you would like to give, whether it's a one-time cash donation, setting up a recurring donation, gifting stocks, or giving through qualified distributions. You can also explore opportunities to volunteer your time and skills if that aligns with your preferences. To maximize the impact of your giving, consider one of these tax efficient strategies:
Gifting appreciated securities / stock – Donating stocks to charity can be a savvy philanthropic strategy. When you donate stocks or securities that have appreciated in value, you're supporting a good cause and can potentially reap tax benefits. By transferring your assets directly to a nonprofit organization, you can typically avoid capital gains taxes that you would otherwise incur if you sold the investments yourself.
Qualified Charitable Distributions – This method allows you to give to charitable causes directly through your Individual Retirement Account (IRA) if you're aged 70 1/2 or older. These gifts can help you meet your annual required minimum distributions while reducing your taxable income. You're able to distribute up to $100,000 per year, directly to a charity of your choice without having to pay any taxes on those funds.
The key with Qualified Charitable Distributions is to have the funds sent directly from your IRA to the charity without the money ever being in your possession. If you possess the money at any point, you can run into tax issues.
Charitable Trusts - Charitable trusts are powerful estate planning tools that serve both philanthropic and financial goals. The two most common forms of charitable trusts include:
Donors are often referred to as "advisors" in this context, because they can recommend grants from the Donor Advised Fund to eligible nonprofit organizations and causes of their choice. The donor has the flexibility to make grants at any time, in any amount, to one or multiple charities.
Donors receive a tax deduction for their initial contribution to the Donor Advised Fund. Additionally, any capital gains and income generated within the Donor Advised Fund are tax-free. Your financial advisor will handle all administrative details and issue grants to nonprofits in the name of the fund you establish, or if you prefer, grants can be made anonymously.
It's important to note both of these trust options involve complex transactions and are subject to specific rules set by the IRS. To ensure that you fully understand the implications and benefits of charitable giving through these trusts, we strongly recommend consulting with a legal or tax advisor.
By seeking professional advice, you can navigate the intricacies of these trusts and make informed decisions that align with your philanthropic goals. Your advisor will be able to guide you through the process, ensuring that you comply with all legal requirements and maximize the impact of your charitable giving. For more information on charitable giving, view our Women & Wealth webinar on charitable giving here.
Remember, giving back to the community is a noble endeavor, and with the right guidance, you can create a lasting legacy that supports the causes you hold dear. So, take the time to explore the options available to you and seek expert advice to make the most of your charitable giving journey.
IMPORTANT LEGAL DISCLOSURES AND INFORMATION
All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.
SouthState Wealth represents the collective departments and subsidiaries of SouthState Bank, N.A. that provide wealth management services. Products and services are not bank deposits, nor are they FDIC insured, and are not backed or guaranteed by SouthState Bank, N.A. or its affiliates. Securities involve investment risks, including possible loss of principal.
This material is furnished for use by SouthState Wealth clients and subscribers to this report, and may not be redistributed, retransmitted or disclosed without our express written consent. Any unauthorized use is prohibited. We do not provide legal, tax or accounting advice. This material should not be construed as individual investment advice, since such advice is dependent on your specific investment objectives, financial situation, or particular needs. You should consult with us regarding these matters. Neither SouthState Bank, N.A. nor any director, officer or employee of SouthState Bank, N.A. accepts any liability for any direct, indirect or consequential damages or losses arising from any use of this material.
This material is based upon information that we consider reliable, but we cannot guarantee its accuracy, timeliness, or completeness. Opinions expressed are those of the author(s), and are current as of the date written. Neither the information nor any opinion expressed constitutes an offer or recommendation to buy or sell any security nor an offer of investment advisory services. SouthState Bank, N.A., its affiliates, officers, directors, employees, including persons involved in the preparation or issuance of this material may own, buy or sell securities of companies mentioned. Index results assume the reinvestment of all dividends and interest; no index can be directly purchased or sold.
Copyright 2023 SouthState Bank, N.A. All Rights Reserved SouthState Bank, N.A., 1101 First St. South, Winter Haven, FL 33880.
In 2022, Americans gave a staggering $499.22 billion to charities, showcasing that collective generosity can make a monumental impact. There are several ways to give to organizations dear to your heart, and we're exploring your options today.
What is charitable giving?
Charitable giving encompasses the voluntary act of offering financial support, resources, or contributions to nonprofit organizations, charitable causes, or individuals in need. Individuals who participate in charitable giving actively contribute to the betterment of society, addressing critical issues, and improving the well-being of others. Types of charitable giving include monetary gifts, volunteering time and skills, and donating assets like stocks or property.How to give to charities?
Giving to charity is a meaningful way to make a positive impact. To get started, research and choose reputable nonprofit organizations aligned with the causes you're passionate about. If you would like recommendations, you can leverage the expertise of your local community foundation.Next, you'll need to decide on how you would like to give, whether it's a one-time cash donation, setting up a recurring donation, gifting stocks, or giving through qualified distributions. You can also explore opportunities to volunteer your time and skills if that aligns with your preferences. To maximize the impact of your giving, consider one of these tax efficient strategies:
Gifting appreciated securities / stock – Donating stocks to charity can be a savvy philanthropic strategy. When you donate stocks or securities that have appreciated in value, you're supporting a good cause and can potentially reap tax benefits. By transferring your assets directly to a nonprofit organization, you can typically avoid capital gains taxes that you would otherwise incur if you sold the investments yourself.
Qualified Charitable Distributions – This method allows you to give to charitable causes directly through your Individual Retirement Account (IRA) if you're aged 70 1/2 or older. These gifts can help you meet your annual required minimum distributions while reducing your taxable income. You're able to distribute up to $100,000 per year, directly to a charity of your choice without having to pay any taxes on those funds.
The key with Qualified Charitable Distributions is to have the funds sent directly from your IRA to the charity without the money ever being in your possession. If you possess the money at any point, you can run into tax issues.
Charitable Trusts - Charitable trusts are powerful estate planning tools that serve both philanthropic and financial goals. The two most common forms of charitable trusts include:
- Charitable Remainder Trust - Giving through a Charitable Remainder Trust allows you to receive income for a specified period (or for the rest of your life), and at the end of the period, the remaining assets in the trust go to your chosen charity.
- Charitable Lead Trust - Conversely, a Charitable Lead Trust is designed to provide financial support for one or more charities for a set time, and then the remaining assets are based back to the donor or designated beneficiary after the set number of years have passed.
How does a Donor Advised Fund work?
A Donor Advised Fund operates as a flexible and efficient charitable giving account. You start by making an irrevocable contribution of cash, appreciated stocks, real estate, or other assets to a Donor Advised Fund. The contributed assets in the Donor Advised Fund are typically managed by a sponsoring organization you choose, such as a community foundation or a financial institution, like SouthState.Donors are often referred to as "advisors" in this context, because they can recommend grants from the Donor Advised Fund to eligible nonprofit organizations and causes of their choice. The donor has the flexibility to make grants at any time, in any amount, to one or multiple charities.
Donors receive a tax deduction for their initial contribution to the Donor Advised Fund. Additionally, any capital gains and income generated within the Donor Advised Fund are tax-free. Your financial advisor will handle all administrative details and issue grants to nonprofits in the name of the fund you establish, or if you prefer, grants can be made anonymously.
It's important to note both of these trust options involve complex transactions and are subject to specific rules set by the IRS. To ensure that you fully understand the implications and benefits of charitable giving through these trusts, we strongly recommend consulting with a legal or tax advisor.
By seeking professional advice, you can navigate the intricacies of these trusts and make informed decisions that align with your philanthropic goals. Your advisor will be able to guide you through the process, ensuring that you comply with all legal requirements and maximize the impact of your charitable giving. For more information on charitable giving, view our Women & Wealth webinar on charitable giving here.
Remember, giving back to the community is a noble endeavor, and with the right guidance, you can create a lasting legacy that supports the causes you hold dear. So, take the time to explore the options available to you and seek expert advice to make the most of your charitable giving journey.
IMPORTANT LEGAL DISCLOSURES AND INFORMATION
All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.
SouthState Wealth represents the collective departments and subsidiaries of SouthState Bank, N.A. that provide wealth management services. Products and services are not bank deposits, nor are they FDIC insured, and are not backed or guaranteed by SouthState Bank, N.A. or its affiliates. Securities involve investment risks, including possible loss of principal.
This material is furnished for use by SouthState Wealth clients and subscribers to this report, and may not be redistributed, retransmitted or disclosed without our express written consent. Any unauthorized use is prohibited. We do not provide legal, tax or accounting advice. This material should not be construed as individual investment advice, since such advice is dependent on your specific investment objectives, financial situation, or particular needs. You should consult with us regarding these matters. Neither SouthState Bank, N.A. nor any director, officer or employee of SouthState Bank, N.A. accepts any liability for any direct, indirect or consequential damages or losses arising from any use of this material.
This material is based upon information that we consider reliable, but we cannot guarantee its accuracy, timeliness, or completeness. Opinions expressed are those of the author(s), and are current as of the date written. Neither the information nor any opinion expressed constitutes an offer or recommendation to buy or sell any security nor an offer of investment advisory services. SouthState Bank, N.A., its affiliates, officers, directors, employees, including persons involved in the preparation or issuance of this material may own, buy or sell securities of companies mentioned. Index results assume the reinvestment of all dividends and interest; no index can be directly purchased or sold.
Copyright 2023 SouthState Bank, N.A. All Rights Reserved SouthState Bank, N.A., 1101 First St. South, Winter Haven, FL 33880.
