Mosaic Board member, Michael LaViña, shares sound advice on thinking strategically about giving. Michael is a Portfolio Manager at Cornerstone Advisory, LLP and has extensive experience in trading equity, fixed income, commodity and currency markets around the world.
Thinking Strategically About Giving
Incorporating a giving plan into your year-end tax planning can help you make the most of your charitable contributions. Here are a few strategies that can help.
- Consult your advisor. Taking a holistic look at your finances from a tax, investment, estate plan, and long term financial plan perspective is always the first step. Working with an advisor may help you identify opportunities for giving that you may not immediately recognize.
- Consider donating appreciated securities instead of cash. The internet has made giving online extremely efficient, but donating from a credit card may not be the most tax efficient method of charitable giving. If you have appreciated securities like stocks, bonds or mutual funds it might be beneficial to donate those instead of cash.
- Consider using a charitable donation to offset a one-time large increase in taxes. Bonuses, the sale of a business, large amounts of capital gains from investments, a conversion from a traditional IRA to a Roth IRA may result in a larger tax bill. If an event like this pushes you into a higher tax bracket, charitable donations may be considered to help reduce the higher tax burden.
Consulting your advisory team on which strategy is most appropriate for you is always the first step. As we approach this season for giving, it is helpful to remember that thinking strategically about your charitable donations can help you maximize the impact you make.