Americans in general are charitable people, making nearly $600 billion in donations annually. And according to some sources, Nashvillians are among the most generous, donating about five percent of their annual income to charities. That’s more than double the national average.
In some cases, it might be prudent for individuals to establish an orderly process to their annual giving. With that in mind, recently we stopped by the Bellevue office of Mariner where Leona Edwards, Certified Financial Planner (CFP) and senior wealth advisor, offered some helpful hints and tips for those who might benefit from Charitable Planning.
Bellevue City Lifestyle: Charitable Planning. It sounds great; it’s something that many would like to do more of. But are there ways to do it that are more efficient than writing random checks?
Leona Edwards, Mariner: Our position is that if it’s in your heart to be charitable, we want to help you do that in a manner that is tax efficient as well. Based on your personal situation, there are several methods to consider.
If you are under the age of 70.5 one such method is the establishment of a Donor Advised Fund (DAF). For example, you can avoid paying the capital gains tax on appreciated stock by transferring the positions into your DAF. Donating enough stock, combined with other itemized deductions, can result in a bigger tax break than the standard deduction.
If you’re 70.5 years of age or older, you can reduce your future and current tax burden by making Qualified Charitable Distributions (QCDs) from your IRA. Those donations can be exempt from ordinary income tax, meaning you’ll be able to contribute more to the causes that are important to you.
The third way to maximize efficiency is to ensure that your estate documents are in order. Most people are not going to have a taxable estate but for those that do, making outright charitable donations or creating a foundation through the estate upon death is another way to reduce estate tax, which is currently 40 percent.
As an advisor we can help you determine what form of Charitable Planning works best for you and the organizations you want to support.
BCL: Can you give an example of how a Donor Advised Fund works?
LE: Let’s say the client has lots of Apple stock. When they sell it, they pay capital gains tax. But let’s say that same client also likes to give regularly to their church. We might recommend transferring $50,000 of appreciated Apple stock to their Donor Advised Fund. From there, it can be distributed all at once or it can be stretched out over a time frame of the client’s choosing. But because you make that large, one-time donation, you’ll get a larger tax deduction that year. It’ll be much greater than writing a $5,000 check every year for 10 years.
This is when charitable giving becomes gratifying and emotional. Clients get excited when they realize that one-time contribution enables them to make those gifts they’ve always wanted to give. The additional tax benefit is like the cherry on top
BCL: Who do I need to contact and what professional credentials should my adviser have?
LE: The professional Gold Standard is Certified Financial Planner (CFP), and I also recommend that people confirm that they are working with a fiduciary. That simply means that the interest of the client is first and foremost.
We want to find the best strategies for clients who want to give, but we’re never ones to push clients into seeking tax deductions through charitable giving. Maybe they have children they need to help first. There could be other concerns as well. We take all of that into consideration.
At Mariner, every advisor is a fiduciary and most of us at the Bellevue office are CFPs. I’m also a Certified Tax Specialist (CTS), meaning I have additional education in taxes.
BCL: How much money does a client need to get started and how can Mariner help?
LE: At Mariner, we don’t enforce client minimums. Our mission is to positively impact the lives of many. The best first step would be to call the office and set an appointment to meet with an adviser. Bring a tax return with you and have an idea of where and when you’d like to donate.
BCL: Mariner is well known for its philanthropic endeavors. How do those of you at the Bellevue office participate?
LE: At Mariner we like to say that charitable giving and volunteering is in our DNA. All employees can contribute a portion of their paycheck to the Mariner Foundation. Then we can request grants from the Foundation to go toward causes in our local communities. Recently we volunteered for a day at The Store. In addition to donating our time, we also brought a check from the Mariner Foundation. Nationally, last year the Foundation surpassed $10 million in employee contributions and a dollar-for-dollar company match.
BCL: Do you have any general advice for those who want to donate on a smaller scale?
LE: Starting in tax year 2026 people who take the standard deduction on their tax returns qualify for charitable giving deduction. If you file single you can get a deduction up to $1,000. The deduction for married couples filing jointly is $2,000. This will make it possible for just about everyone who wants to give, to get a tax deduction in return.
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