When it comes to philanthropy, individuals and businesses give to charity for a variety of reasons: personal fulfillment, helping important causes and driving civic and corporate engagement.
Whether related to annual giving or estate planning, charitable giving can provide significant tax incentives. Maybe that's why corporate and personal charitable giving in the U.S. continues to grow. Americans in the 2024 tax year gave total contributions estimated at $592.5 billion, with individuals giving roughly $392 billion of that. That doesn't include volunteerism, service on nonprofit boards or other giving of time and talent.
With all this generosity, how should donors plan their giving to have the greatest impact? A thoughtful approach to philanthropy enables more impactful, generous and confident giving.
The following tips can help build an effective and enduring philanthropic strategy.
Plan and Budget Purposefully. Individuals and businesses alike should set aside a defined portion of income or revenues. This allows donors to prepare for both planned contributions and unexpected needs, such as responding to urgent community requests.
Focus Your Impact. Without a clear focus, giving can be fragmented and less impactful. Identify select causes aligned with personal values or corporate mission, from community initiatives, industry-related nonprofits or faith-based organizations. Given the constant stream of requests donors face, concentrated giving can provide clarity when forced to decline unsolicited requests.
Christine P. Yates
Director with Tripp Scott, Yates leads the firm's Private Wealth Service Group. She brings over 25 years of experience guiding her clients through the full spectrum of estate transfer issues. From small administrations to estates in excess of $1 billion, she counsels clients on estate, gift and generation-skipping planning, trust and estate administration and fiduciary litigation.
Do the Homework. Due diligence allows donors to separate those organizations that operate with a higher level of transparency or efficiency. Evaluating a charity's mission, governance and administrative costs helps ensure that contributions are making a meaningful difference. It also can help avoid scams.
Leverage Smart Tax Strategies. While the increased standard deduction has reduced the number of taxpayers who can itemize charitable contributions, several strategies can restore or even enhance tax benefits. These include:
Bunching contributions into a single tax year to exceed the standard deduction threshold.
Donating appreciated assets, such as securities, to avoid capital gains taxes.
Giving from IRA-qualified charitable distributions (QCDs), which can help satisfy required minimum distributions without increasing taxable income.
Using life insurance to create a larger future gift by naming a charity as beneficiary.
Think Beyond Today: Planned Giving
The idea of planned giving is often associated with estate gifts, but it is equally relevant during one's lifetime. Integrating philanthropy into a broader financial plan allows donors to consider not just income, but also assets, investments and legacy goals. For higher-income individuals and business owners, donor-advised funds or family foundations can provide both tax efficiency and long-term philanthropic structure.
Ultimately, strategic charitable giving maximizes tax deductions and impact, allowing individuals and businesses alike to give with greater purpose, achieve meaningful financial efficiencies and find greater fulfillment in philanthropy.
Whether for individual or corporate giving, the Private Wealth Services Group at Tripp Scott can examine strategies that can help maximize the impact of your giving in this life and beyond, while also helping ensure a secure financial future for your family.
Learn more at TrippScott.com