Guide to year-end giving for 2023

During this time of year, we begin contemplating the charitable gifts we’d like to make before Dec. 31. It’s a critical time to give generously to support our communities while also taking advantage of tax benefits. 

You may be considering making a gift to your NCCF fund, your local affiliate foundation’s fund, or you may wish to start a new fund at NCCF. Whatever your charitable giving goal, our team is ready to support you. 

Please review these important dates and deadlines as we enter into this Season of Giving.

Appreciated assets are tax-effective gifts 

Gifts of appreciated assets like stock, securities, mutual funds, closely held stock, and real property are often tax-effective gifts, especially when capital gains taxes can be avoided. Charitable gifts of long-term appreciated assets are deductible up to 30% of your adjusted gross income, and alleviate capital gains taxes if you sold the asset. If you would like to make a gift of an appreciated non-cash asset, please contact the Development Officer in your region to assist you. 

IRA Qualified Charitable Distributions 

Donors aged 70½ or older can transfer up to $100,000 annually from IRA accounts to a qualified public charity without having to recognize the distribution as income. The Qualified Charitable Distribution may not be given to a donor advised fund, but may be made to other NCCF funds such as your local affiliate foundation’s grantmaking fund or scholarship funds. 

“Bundling” charitable gifts is still an effective tax strategy 

Charitable contributions can only reduce your tax bill if you itemize your taxes, which generally happens when the combined total of your anticipated deductions – including charitable gifts – add up to more than the standard deduction. The standard deduction for a single filer is $12,400, for married filing jointly is $24,800, and for head of household is $18,650. If your anticipated deductions are less than the standard deduction, you’ll likely choose to take the standard deduction and will not itemize. 

Individuals who want to maximize their charitable deductions and itemize in 2023 can “bundle” their charitable gifts – i.e., make two or more years’ worth of charitable contributions in a single year. This strategy helps push taxpayers over the itemizing threshold, where they can reap the benefit of deducting the full value of their donations. 

Bundling your charitable gifts is an ideal strategy to add to or establish a donor advised fund at NCCF. The minimum required to start an endowed donor advised fund at NCCF is $25,000, which would push a married couple filing jointly over the $24,800 threshold for itemization. For itemizers making gifts to DAFs, dollars are deductible up to 60% of adjusted gross income and excess deductions can be carried over and deducted in five future tax years. 

As always, check with your financial or other professional advisor to determine what type of giving is most appropriate for you. The NCCF team is ready to assist you in your charitable giving this season. 

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.