Charitable giving is about supporting causes close to the heart. However, it can also play a crucial role in your own financial well-being. John Young, a Certified Financial Planner who recently transitioned his practice to an RIA platform for greater client flexibility, says the right strategy can make giving more meaningful and more beneficial.
“A financial advisor has the ability to explain the pros and cons of how and when to gift,” John says. “If someone wants to give but doesn’t know how to start, we can talk about structures—not only what to give, but when.” The balance between generosity and tax efficiency is at the core of his work. “We’re looking to optimize the gifting while also optimizing tax benefits for the client,” John explains.
One popular option is a donor-advised fund. “It allows the flexibility of dictating where the money should go on an ongoing basis,” he explains. “We can always adapt where those assets are going.” This approach, he adds, helps giving feel easier. “If it’s built into the planning process, then it seems more natural… versus, ‘Oh yeah, I have to do this at the end of the year.’”
John emphasizes that charitable giving should reflect both financial goals and personal passions. “The client dictates where they want those assets to go,” he says, “and we structure flexibility for them.”
Why does charitable giving matter to overall financial health? For John, the answer goes beyond numbers. “Financial wellness doesn’t just mean more money,” he says. “A lot of people find wellness in providing for those they want to benefit… when it’s well-structured, they can include that in their overall financial plan.”
For clients with estate planning concerns, giving can also protect assets. “Charitable giving can remove assets from the estate while getting a tax benefit,” John notes. “If they start early and structure things appropriately, their wishes are followed—and the government doesn’t end up getting those assets.” One of the biggest misconceptions is that charitable giving doesn’t provide significant financial benefits. “
Strategic giving can also minimize tax burdens. “Structuring the right kind of gift—whether it’s an appreciated asset or an RMD distribution—can make a difference,” he says. “If someone has a retirement plan with a required distribution that bumps them into a higher bracket, and they’re charitably inclined, why not give that distribution to the charity and avoid the higher tax?”
Recent tax code changes have made timing even more important. “It really makes you want to structure gifting this year as opposed to next,” Young says. “Pulling your contributions forward this year is going to be a really big planning opportunity,” he emphasizes.
Uncertainty about tax code changes may have caused some people to hold back. But, Young says, that’s shifting. “We saw a massive reduction in giving due to uncertainty of where the tax law would land. But now… we’re seeing interest in accelerating momentum.”
With the right strategy, generosity can become an integral part of financial wellness—helping you support the causes you love while strengthening your own financial future.
For more information, visit YoungGlobalWealth.com.