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 considering 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 is always a tax-savvy alternative to giving cash, regardless of the economic situation. You may feel disappointed that your portfolio has 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. Families with low or moderate household incomes can be especially vulnerable to high inflation. Nonprofits in our community are serving the people who need the most help right now.   

“Don’t forget about the qualified charitable distribution.”  

If you have reached the age of 70 1/2, you may be eligible to make annual distributions of up to $100,000 each for you and your spouse from IRAs directly to a qualifying public charity or some types of charitable funds (donor advised funds are not eligible but many other community foundation funds are). QCD transfers count toward satisfying your required minimum distributions and avoid the income tax on those funds. Plus, those assets will no longer be part of your estate, which avoids estate taxes for your heirs, too.

Oregon Community Foundation has expertise in handling complex gift transactions to convert assets into charitable resources. Our philanthropic advisors across the state are happy to answer your questions. Learn how to create a charitable fund with OCF.