Hanging in There: Charitable Giving in a Challenging Economy

At the moment, economic conditions feel, well, awful. But for those who are charitably inclined, challenging economic times might actually serve as an inspiration to become more intentional about charitable giving priorities. What's more, not all donors will reduce their donations.  

Here are three messages worth sharing with your philanthropic clients as bear market conditions hang on into the fourth quarter:  

“Not all stocks are down.”  

Giving appreciated stock to a donor-advised fund or other type of fund at OCF is always a tax-savvy alternative to giving cash, regardless of the economic situation. Your clients may feel disappointed that their portfolios have hit a rough patch, but this does not mean that there aren’t still plenty of opportunities to avoid capital gains tax on stocks held for more than a year. (Take a look at the historical share price of Apple, for example, and imagine the capital gains tax liability for clients who’ve held the stock for several years.) 

“Consider the needs of others who are even more acutely feeling the pinch of inflation.”  

Community needs are rising, and OCF is dedicated to staying on top of the issues that are critically important to quality of life at any given time. Families with low or moderate household incomes can be especially vulnerable to high inflation. The team at OCF can help your clients zero in on nonprofits in our community that are serving the people who need the most help right now.   

“Don’t forget about the Qualified Charitable Distribution.”  

We mention this tool a lot because it is such a financially-savvy way for your clients to support the charities they care about. If your client has reached the age of 70 1/2, the client may be eligible to make annual distributions of up to $100,000 per spouse from IRAs directly to a fund at OCF or other qualifying public charity. QCD transfers count toward satisfying clients’ Required Minimum Distributions and avoid the income tax on those funds. Plus, those assets are no longer part of a client’s estate at death, which avoids estate taxes, too. What’s more, the QCD may get a boost if the EARN Act becomes law; proposed bipartisan legislation would expand the QCD rules to allow a one-time, $50,000 QCD to a split-interest trust such as a charitable remainder trust. QCDs cannot go into advised funds, but they can be directed into OCF pooled funds, scholarship funds, designated funds or discretionary field of interest funds.