507 N. Front Street Harrisburg, PA 17101
Charitable Giving

Although ‘Christmas in July’ is far catchier than ‘charitable giving in July,’ the theme is the same…

…there’s no need to wait.  While we tend to think about gifts to charity during the holidays (particularly for the larger gifts), you should be thinking about and be developing your charitable giving strategy throughout the year.  Especially considering the itemized deduction impact from the recently passed tax reform, starting to build your plans mid-year is more critical than ever.

Remember that it is critical when developing a plan that meets your specific needs to get the input of your investment advisor, your accountant, and your attorney.

Can I Afford To Give?

The first step in planning your charitable giving strategy is to determine if you are in a position make notable lifetime gifts.  Before diving into a detailed analysis, take some time for some blue-skying to help you identify and prioritize your goals – outside of fully funding your retirement, which is a must. Determine where charitable giving ranks relative to your other goals; for example, education for future generations of your family, helping parents financially, an inheritance for your children, etc.  If you have not adequately funded your retirement or other goals, you should consider a plan for bequests (gifts that occur at your death) versus lifetime gifts.  Bequests can be done in a variety of ways that range from the direction in your estate plan or will to the use of life insurance contracts.

How Should I Give?

The ‘how you give’ is a decision that needs to be coordinated with the ‘what you give’ decision.  As you consider how to make the gift, think about a one-time gift versus a multi-year pledge, the use of a donor-advised fund (DAF) or other options like charitable trusts (CRAT, CRUT, etc.) and family foundations. As with deciding ‘what you give’, consider these multiple factors: near and long-term tax implications, effects on your current financial situation as well as your heirs, the impact to the charity, etc.  These decisions may not all be easy, and we’ve seen situations where the methodology recommended by the charity is not in either the charity’s or the donor’s best interests.

For example, a charity recommended a CRAT (charitable remainder annuity trust) to a donor who was also one of our clients. While the CRAT did provide an income to the donor, the amount of income was not only negligible for the client but also not something he wanted. Our analysis showed that a smaller gift of appreciated stock provided a more substantial tax benefit to the donor and a more significant net gift to the charity – everyone came out ahead thanks to some fact-finding and analysis.  Here is how the numbers worked out:



 Direct Monetary Gift

Out of Pocket Donation



Income Stream to Donor

$100/month for 10 yrs


Actual Amount the Charity Receives 



What Should I Give?

Assuming that you want to make lifetime gifts, let’s consider what type of assets to give.  The most mainstream options are cash, appreciated stock from a non-qualified account, personal property (car, land, art, etc.) or your Required Minimum Distribution (RMD) from a qualified account.  As you consider what to give, you also need to determine the near and long-term impact of the gift; the near-term will impact your current income tax situation while the long-term will affect your overall estate tax situation as well as your heirs.

The following table summarizes some of the concepts that were addressed in this article:

  Lifetime Giving Bequest
Who is it Right For?
  • People who know their retirement is well funded
  • People who want to reduce their taxable estate
  • People who are unsure of their retirement funding level
  • People who have assets within the estate tax exemption level (unified credit)

How Should I Give?

  • Appreciated assets (stock, land, other property, etc.)
  • Cash gifts
  • Required Minimum Distributions (RMD) from qualified accounts
  • Other estate planning tools (Charitable Remainder Trust, detailed estate plan, etc.)
  • Last will and testament, testamentary trust, etc.
  • Life insurance beneficiary designations
  • Retirement plan or IRA beneficiary designations

What are the Benefits?

  • Income tax reduction
  • Reduce taxable estate
  • Recognition of your contribution during your lifetime
  • Not sacrificing retirement security in order to make gifts
  • Ability to give to the organizations that you value through a portion of your estate
  • Opportunity to make a more significant gift
What are the Limitations?
  • Effort and cost associated with developing a detailed estate plan
  • Potential for changes to tax codes and regulations
  • Potential lack of specificity of time and amount of gift


Again, like every other facet of your financial life, planning is the key.  Moreover, concerning charitable giving, it is critical to include your accountant and your attorney in these conversations.  We wholeheartedly welcome the collaboration between professionals and have found that is the best way to make sure that you get the most optimal solutions and outcomes possible.


Please contact us to start or continue a conversation about your thoughts and questions regarding your charitable giving.

Roof Advisory Group, Inc.

507 N. Front Street

Harrisburg, PA 17101



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