In a world of volatile financial markets and ever-evolving tax policies, most recently due to the One Big Beautiful Bill Act, thoughtful planning has never been more important. We’re committed to helping investors navigate this landscape and help donors better understand how strategic giving can amplify their impact. While this overview won’t cover every option or address individual circumstances, we hope it sparks new ways of thinking about your charitable giving, both now and in the future.
Donating Appreciated Securities vs. Cash
While many donors think first of giving cash to a nonprofit, they also can donate financial securities including stocks, mutual funds, exchange traded funds (ETFs), bonds, and more to the organization of their choice. This strategy can be especially effective for investors holding appreciated assets in taxable accounts, as it allows them to support a charity, potentially receive a tax deduction for the full value of the donation, and avoid capital gains taxes on the appreciated securities.
Using Donor-Advised Funds
Given recent changes in tax law, charitably minded donors may consider “prefunding” future gifts through a Donor-Advised Fund (DAF). This approach often involves “bunching” charitable contributions, grouping multiple years of donations into a single tax year rather than spreading them out over time. Doing so can help maximize itemized deductions in a given year, potentially exceeding the standard deduction threshold. In contrast, smaller annual donations may not provide the same tax benefit if the standard deduction is taken each year.
DAFs can also be funded with appreciated securities, offering the same advantages discussed above. Once established, DAF can remain invested in the donated security or change investment strategies, allowing the assets to potentially grow tax-free and increase the overall charitable impact over time. It’s important to note that once a contribution is made into a DAF, the sponsoring organization assumes legal control of the funds. However, the donor (or their representative) retains advisory privileges regarding grant distributions and investment decisions.
Qualified Charitable Distributions
A Qualified Charitable Distribution (QCD) allows individuals age 70½ or older to donate up to $111,000 annually to one or more charities directly from a taxable IRA, rather than taking a required minimum distribution (RMD). To qualify, the distribution must be made directly from the IRA to an eligible 501(c)(3) organization by December 31st of the applicable tax year. Because the distribution is not included in taxable income, as a typical RMD would be, it may help reduce overall tax liability and lower the likelihood of moving into a higher tax bracket.
Legacy Giving & Bequests
One way to leave a lasting legacy is by including charitable giving in your will. Bequests can be structured as a specific dollar amount, a percentage of your total estate, or the remaining balance after other distributions have been made. This approach does not require any financial commitment during your lifetime (aside from potential will preparation costs) and can be an effective planning tool for those looking to manage estate tax exposure while supporting causes they care about.
Conclusion
While this article only scratches the surface of available giving strategies, we’ve highlighted a few common approaches that can apply to a wide range of donors at different income and asset levels. Whether modest or substantial, every contribution plays a meaningful role in supporting nonprofit missions.
Nottingham Advisors offers both institutional and individual clients experience, sophistication, and professionalism when helping them achieve their goals. With over 40 years of serving Western New York and clients in more than 30 states, Nottingham tailors each solution to fit the specific needs of each client.
For more information about Nottingham’s offerings, visit www.nottinghamadvisors.com or call 716-633-3800.
This white paper is meant for educational purposes only and is not financial, legal, or tax advice. Please consult a qualified legal or tax advisor where such advice is
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