Alternatives to traditional charitable giving can provide significant tax savings and offer opportunities to incorporate your financial planning needs. If you dream of doing more for the people and causes you care most about, you may wish to consider: a gift of securities, a contribution from your individual retirement account (IRA), or a distribution from your donor-advised fund (DAF).

Appreciated Securities

When you sell securities like stocks, bonds, or mutual funds that have increased in value, you will owe capital gains tax on the profit from your sale. However, if you donate your long-term appreciated securities, you can completely avoid the capital gains tax. Even better, you will receive a federal income tax charitable deduction for the full value of your securities. It is a double tax savings: you benefit from the appreciation in value without ever paying tax on it. 

Individual Retirement Account (IRA)

If you are age 70½ or over, you can make a direct transfer from your IRA called a Qualified Charitable Distribution (QCD). Unlike other retirement account withdrawals, you will owe no income tax on your QCD. When you reach age 73 and must take a Required Minimum Distribution (RMD) from your retirement account, your QCD will reduce your RMD, up to $105,000 annually, without any federal taxable income for you. 

Donor-Advised Fund (DAF)

Many Americans have discovered the advantages of using a DAF to organize and streamline their charitable giving. If you have created your own DAF, you can make contributions to your DAF and then recommend grants to charitable organizations like Columbia. You receive a federal income tax charitable deduction for your contributions to your DAF. Did you know that you can also designate your DAF as a beneficiary of your retirement account? 

We would be happy to work with you and your advisors to explore creative ways such as these to make a charitable gift that best suits your personal and philanthropic goals.