Today is Give to the Max Day, How to Maximize your Charitable Gifts

Today is Give to the Max Day! Consider joining thousands of generous donors in helping to support local charities. While giving cash is one way, there are many other ways to maximize your generous donation so that it fits within your financial plan.

According to a study in U.S. News & World Report, Minnesota is the most charitable state in the nation, and on November 19, the state dedicates a day to raising awareness to charitable giving and the importance of supporting our community. On this day, named Give to the Max Day, charities from all over the state participate in an online giving holiday. According to, in 2019 alone, donors gave $21.6 million to 5,610 organizations, in one day alone. 

Statewide programs like Give to the Max Day are a great reminder about the importance of charitable giving. However, giving cash is not the only way to do so. There are many ways to maximize your donation so that it fits within your broader financial plan. While the new tax laws have significantly deceased the number of smaller donors who itemize charitable contributions, there are strategies that donors can do to maximize their charitable intent. Additionally, donors who are looking for an alternative to donating cash, can participate in the following ways:

Using a Donor Advised Fund

A donor can gift personal assets such as cash, stock or real estate to a donor advised fund (DAF) and can take a tax deduction for the gift up to the specified limitations in tax law. The DAF then makes a charitable gift based on the donor’s charitable intentions to qualified charitable organizations. The DAF does not have to give all the money in the fund in the same year, rather, it can distribute funds to charity over time. Donors can contribute as frequently as they would like, and then recommend distributions to charity as they see fit.

Gifting Appreciated Stock

Donors can maximize charitable gifts by gifting assets that are highly appreciated and avoid capital gains tax. If a donor sells an asset, they must pay capital gains on the increase in value between the date of purchase and sale. However, if they gift that asset to a charity, the charity is exempt from capital gains tax and thereby receive credit for the entire charitable gift. Thus, receiving a large income tax deduction and benefiting charity by about 20% more than if they had simply sold the asset and donated cash.

Qualified Charitable Distributions

A Qualified Charitable Distribution (QCD) allows IRA owners who are 70 ½ or older to directly transfer up to $100,000 annually from an IRA to charity, tax-free. If you are married, you can transfer up to $200,000. The funds must be paid directly from your IRA to a qualified charity. As of 2018, QCDs became more valuable than ever for taxpayers who now must take the standard deduction. With the QCD, you get a tax break for your charitable contribution even if you are using the standard deduction. Another benefit of a QCD is that the amount transferred from the IRA to the charity is not included in your adjusted gross income for the year.

Combining Giving Years

The 2018 Tax Cuts and Jobs Act increased the standard deduction, resulting in a larger percentage of people no longer itemizing their tax returns. Because of this, many small charitable gifts that ordinarily would be an itemized deduction, became less important to those taking the standard deduction. Charities saw a large decrease in smaller donations. However, a strategy exists in which donors can “bunch” two years’ worth of charitable gifts into one year, itemize that year and take the charitable deduction. The subsequent year, the donor would not give to charity and take the standard deduction. The charity nets the same gift, just receives one larger give every other year.

While giving to charity at any time of the year can provide a meaningful experience, doing so in a way that maximizes your gift is something to keep in mind. Give to the Max Day harnesses statewide excitement around improving our society and encourages generosity in a way that can make a greater impact in our community.

Olson Wealth Group is a full service investment, family office and wealth management firm. We assist clients with philanthropic planning. With wise counsel and clear strategies, our experienced specialists provide tailored approaches that strive to maximize wealth.

Securities offered through LPL Financial, Member FINRA/SIPC

Disclosures: This information is not intended to be a substitute for specific individualized tax advice.  We suggest that you discuss your specific tax issues with a qualified tax advisor.

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