Year-end strategies for charitable giving
How tax benefits may help support your goals, increase the impact to support your charitable giving goals.
Once Thanksgiving passes, there’s only 25 business days to complete any tax planning strategies for 2023. It’s important to review, now, any year-end tax planning strategies to help minimize taxes, meet your charitable gifting goals, and meet your estate planning goals.
Minimizing taxes, meeting my charitable donation goals you probably understand. Why is Hunger in the Headline? It’s estimated that a little over 15% of Lincoln County, Oregon population face “food insecurity.” Simply stated, there isn’t enough income monthly available to buy food. In Newport, Or. That 15% is approximately 1600 plus individuals facing “going hungry “every month.
“It’s not what you earn, but what you keep after taxes and inflation, that matters.”
As you complete your year end planning review, make sure you review how tax smart charitable donations and strategies maximize your impact, meet your charitable donation goals, reduce risk in portfolios and complement your estate planning goals.
The mission of the Newport Food Pantry is “no hungry bellies.” As a 501(c)(3) independent nonprofit, we ask you consider the Pantry as a recipient for your charitable donations.
We attempt to meet the needs of those needing food on a weekly basis, providing individuals in need with an up to 4–7-day supply of food, including 25-40 standard items, fresh produce, protein items, and bread. Our guests come, we ask how many family members need food that week, they then mark off what food items they want/need from the Newport Food Pantry for the next week ahead. The Board of Directors, Pantry Manager/Chef and the 40 plus volunteers, feel that people go hungry weekly. If you show up at the Newport Food Pantry for food, you are hungry. “No Hungry Bellies” is the Newport Food Pantry motto!
The typical guest needing food at the Newport Food Pantry includes: seniors on fixed income, the underemployed and the unemployed, single parents, seasonal workers, and the homeless ( less than 20%). A typical conversation with a guest is “after paying all my bills, there was only $58 to feed my family of 4 for the rest of the month.” Whether it’s high housing costs, low minimum wages, food inflation, slowing economy, and high gas prices don’t appear to be going lower. The need appears to be growing.
A checklist to increase impact and reduce taxes:
Before undertaking any strategy, consult your financial advisors (tax/CPA , financial & investment advisor, legal team, etc.)
Which strategy, or combination of strategies helps your family achieve your financial goals and responsibilities while:
- minimizing tax costs
- Maximizes your philanthropic, estate and charitable donation goals.
- Think beyond cash as a donation. What strategy maximizes impact, reduces risk and meets both short term and long-term planning goals?
-Does bunching gifts in 2023 help hurdle the 2023 standard deduction?
- Evaluate all investments to find the most tax-smart, high impact donation!
Decide whether to give now, later, or both.
- Now- does bunching deductions in 2023 make economic sense?
- Now & later: how does a Donor Advised Fund work?
- Later- charitable trusts/probate/named beneficiaries at end of life.
- Advanced charitable trust planning
Haven’t taken your minimum required retirement distribution? A qualified charitable distribution (QCD) from an IRA can be used to satisfy your required minimum distribution (RMD). Potentially, 2 Goals accomplished with minimal tax costs: your required distribution (RMD), and charitable donation goals.
Have you triggered any realized capital gains in 2023?
- Any loss carry forward to utilize?
- Review taxable investment portfolios. Do you have any unrealized losses that make economic sense to trigger?
- How does your charitable donation goal help to offset?
Rebalancing your taxable investment portfolios? It makes sense at yearend to review your portfolio for any over concentration in any one area to manage your risk tolerance. How does your charitable donation strategy impact any triggered capital gains? Cash versus gifting appreciated securities?
Thinking about converting your traditional IRA to a Roth IRA? Consider how a charitable donation may offset the tax costs.
The above ideas are not the only strategies to review. Your financial advisors should review with you what, if any, end of year ideas need to be implemented to minimize taxes, accomplish your charitable goals, meet your estate planning goals.
Before undertaking any strategy, consult your financial advisors (tax, financial advisor & investment, legal team, etc.)
The 8 Board of Directors at the Newport Food Pantry, all volunteers, the Pantry Manager/chef and the additional 40 plus individual volunteers that make the Pantry work, all wish you a very Merry Christmas season. As you consider your charitable donation and philanthropic goals, might you consider including the Newport Food Pantry in your gifting plan.
The Newport Food Pantry was established in 2011 and is an independent 501(c)-(3) non-profit. The Newport Food Pantry currently has 8 volunteer Board of Directors, a pantry manager/chef and over 40 volunteers to support the day-to-day operation. In addition to providing food to those in need on a weekly basis, the pantry has a prepared food initiative providing on average 100 afternoon meal bags to those getting food, and, cooking a dinner meal for those attending Celebrate Recovery. In winter months, we’ve been providing a selection of warm soups along with the meal bags at the Newport Food Pantry. Statistics since the new Board was elected in April 2023 , show the Newport Food Pantry has provided:
- Over 4,200 individuals with a 4–7-day supply of food. An average of over 600 individuals served monthly. August 2023 is the current record serving over 876 individuals.
- Over 2,500 meal bags, and, over Thanksgiving week, gave out over 40 Turkeys and 60 fresh pumpkin pies.
- Provided over 950 individuals for dinner at Celebrate Recovery.
- The combination of donations and cash purchases allow us to provide an individual with a 4–7-day supply of food for under $15/family member. Dinner costs at Celebrate Recovery remain under $5/guest for a 3-4 course dinner. Over 75% of all monthly costs go to food purchase and distribution.
In advance, thank you for considering the Newport Food Pantry as part of your charitable donation goals.
May the year end the check list above and the planning review with your advisors, lead to your peace of mind where your immediate and long-term goals are on track, you’ve minimized taxes, you’re meeting and maximizing impact of your charitable donation goals, and you are comfortable with your current asset allocation meeting your risk tolerance.
Merry Christmas from the Newport Food Pantry!
( author: Tosh McIntosh. Tosh retired after a 37-year career as a Family Wealth Advisor at Morgan Stanley. Tosh is also on the Newport Food Pantry Board of Directors, acting as Treasurer.)