Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Allison Alley
ABOUT Allison

Since 2003 Allison Alley has been committed to working with clients to help them achieve their retirement, estate, investment, and tax planning needs. Prior to joining Pure Financial Advisors, Allison served as Senior Vice President of a small private wealth management and investment banking firm where she specialized in comprehensive wealth planning to address the [...]

If you give a gift, the IRS will forgive a tax! Put away your checkbook – Joe Anderson, CFP® and special guest Allison Alley, CFP® show you six secrets to getting bigger tax savings from your donations to charity, including organizations like 501(c)(3) non-profits, churches, and schools.

Tax-Smart Charitable Giving Guide

Tax-Smart Charitable Giving:

  • Financial Goals
  • Charitable Giving Strategies
  • Charitable Plan

Important Points:

  • 00:00 – Intro
  • 01:02 – Giving that Gives Back
  • 01:54 – Determine Goals
  • 03:03 – Ways to Give to Charity
  • 04:06 – Missed Tax Deduction Opportunity
  • 05:08 – Bunching Donations
  • 06:34 – Donating Appreciated Stock
  • 07:00 – FREE Guide: Tax-Smart Charitable Giving
  • 07:40 – True/False: Cash donations to charity can be claimed up to 60% of adjusted gross income (AGI), while donated appreciated assets can be claimed up to 30% of AGI. [True]
  • 09:00 – Qualified Charitable Distributions
  • 11:11 – Donor-Advised Fund
  • 13:36 – Charitable Gift Annuity
  • 15:15 – FREE Guide: Tax-Smart Charitable Giving
  • 15:58 – True/False: You must receive a written acknowledgment from your charity to substantiate all contributions over $250. [True]
  • 16:22 – Charitable Remainder Trust
  • 18:24 – Charitable Plan
  • 18:38 – Vetting Charities via the IRS, CharityNavigator, and Guidestar by Candid
  • 19:30 – Ask Joe & Al: What are the tax benefits if I name a charity as a beneficiary in my will? – Mallory, Hawaii
  • 20:28 – Pure Takeaway
  • 20:50 – FREE Guide: Tax-Smart Charitable Giving

Make sure to subscribe to our channel for more helpful tips and the latest episodes of “Your Money, Your Wealth.”


Joe: Hey, did you know if you plan a gift, the IRS will forgive a tax? Are you dialed in with your planned giving strategy? Welcome to the show everyone. The show is called Your Money, Your Wealth®. Joe Anderson here, CERTIFIED FINANCIAL PLANNER™, President of Pure Financial Advisors. We got a special co-host this week. It’s Allison Alley.

Allison: Hey, Joe, how are you?

Joe: How are you, Allison?

Allison: Great. Excited for the show.

Joe: Hey, when you’re looking at planned giving, the US gives a ton of money – $499 billion in 2022. 60% of those dollars are given by us individuals. Do you have all the strategies dialed in? We’re gonna get through six of the top strategies for planned giving. That’s today’s financial focus. 64%, as I talked about, are individuals. We got corporations that give 6%, foundations 21%. So the majority of people that are giving money are us individuals, but most of us are doing it wrong. Let’s get dialed in. Let’s bring in Allison.

Allison: Thanks, Joe. This is going to be a great show. We’re going to go over ways to increase your charitable tax deductions. First and foremost, you want to start with figuring out your own goals. Then we’re going to dive into the different strategies you can use to implement those goals, as well as figuring out the best way to put together a charitable plan.

Financial Goals

Joe: Yeah, I think it’s true that everything kind of boils down to the goals, right? Before you start putting in strategies and putting into your plans, it really boils down here. So let’s dive in. When you’re thinking about your money, I think Allison, you probably gotta look at yourself first, right?

Allison: Yep, absolutely. You wanna figure out your own retirement, first and foremost, right? Do you have your own retirement income needs in check? Do you know how much you need to accumulate to fund your retirement? If so, once you do that. Then you can get into what do you wanna do with your assets once you pass away? Do you want those assets to go to your own beneficiaries, kids, family members, et cetera? Or do you want those assets to go to charity or nonprofits or both? And then once you figure that out, it’s figuring out the different charities, identifying where you want those assets to go.

Joe: I think also when you look at people giving, you know, people give on a weekly basis, monthly basis, you just wanna make sure that that’s part of your overall retirement income strategy, if that’s part of your day to day or month to month inflow of your income, you have to start planning for that. And then, of course, if there’s money left over, then it’s really getting to more sophisticated strategies on how to really maximize those gifts to whatever non profit, foundation, or charity. Now, a couple of different ways that you can give. I think most people, Allison, are familiar with here, they’re just cutting the check.

Allison: Absolutely. Either cash to a different charity or writing a check is probably the most common, but it might leave some things out of the picture.

Joe: You could give your old car. Have you done that?

Allison: I have, actually! I did donate an old car once.

Joe: Some appreciated stocks? I think this is the most overlooked. We’re going to get into some more sophisticated strategies that come into play a little bit more depending on your net worth and how much money you’re actually trying to give, such as you could give money directly from your IRA. This came about a few years ago, still a lot of people are not familiar with this donor-advised fund and then also split-interest gifts. I think these are the most common that a lot of people are doing. But this is where they’re leaving money on the table.

Allison: They absolutely are. If you’re just giving cash or writing a check, you might be missing out on an opportunity. In this example we’ve got a married tax filer and they have total taxes of about $10,000 and they typically give to charity another $10,000. So their total itemized deductions are $20,000. However, currently the standard deduction is $27,700. So in this situation, that $10,000 gift to charity isn’t actually giving them any additional tax benefit. Over and above what they’d get with just the standard deduction.

Joe: The new tax reform really kind of hurt a lot of people when they’re giving the charity, because what they did is they really increased that standard deduction. So A, you can itemize your deductions or you could take the standard deduction and they try to simplify the overall tax code or how we’re doing our tax returns. So they’re giving everyone a lot larger standard deductions. So most people don’t necessarily itemize anymore. But in this example here, this person was giving $10,000 away as a gift to either a non-profit or a charity or foundation, the university, whatever it is to get that tax deduction. But what hurts them is that their total itemized is $20,000 so they’re still taking the standard. So that $10,000 gift didn’t necessarily affect their taxes in any way, shape, or form.

Charitable Giving Strategies

Strategy 1: Joe: Here’s an interesting strategy that you might want to do. Bunching. Let’s say I’m going to give $10,000 to that organization. So instead of giving $10,000 a year, maybe I “bunch” that gift into one year. So in 2023 I want to make sure that I get that tax deduction. So I bunch $30,000 and then here my total itemized is now $40,000. So I’m going to receive a lot larger tax benefit by bunching. The problem is that charity is not going to get any cash for the next couple of years.

Allison: Right, but in those next couple of years, you’re still going to have that standard deduction, which you would have gotten anyways. This gives you a significantly larger tax deduction over that handful of years than if you had just given those dollars in each of those individual years.

Strategy 2: Joe: Let’s talk about another strategy. I want to give $10,000. I’m going to just cut a check for my checking account and give it to that organization. Another, more tax-effective way to do this, Allison, is to potentially give appreciated stock.

Allison: Yeah, that’s right. If you’re already going to give $10,000 you could just give cash or appreciated stock. Giving the appreciated stock is still going to get you that same $10,000 tax deduction. However, you’re going to save the capital gains tax that you would have to pay if you sold the stock first to then have the $10,000 to give to the charity. You’re still giving away the same amount of total money. You’re still getting the same tax deduction, but your total tax savings is much higher because you don’t have to pay the capital gains tax on the sale.

Joe: Yeah, absolutely. Let’s say you bought a stock for $1,000. It’s worth $10,000, you have $9,000 of gain. You can either give $10,000 in cash or you can directly give that stock to the charity. The charity is going to sell the stock. They pay no tax. You can take the $10,000 that you were going to give the charity and go ahead and buy that stock back at a higher basis. So you’re still keeping your portfolio looking the same, but much more tax efficient. If you want more help with this, you know where to go. Go to yourmoneyyourwealth.com. Get the tax-smart charitable giving guide. The Tax-Smart Charitable Giving Guide! Yourmoneyyourwealth.com, click on that special offer. We’ve still got a ton to go. Don’t go anywhere. The show is called Your Money, Your Wealth®.

Welcome back to the show. The show is called Your Money, Your Wealth®. Joe Anderson here CERTIFIED FINANCIAL PLANNER™ with Allison Alley, CERTIFIED FINANCIAL PLANNER™ as well. We’re breaking things down today in regards to charitable giving. Speaking of, go to yourmoneyyourwealth.com, click on that special offer, it’s a tax-smart charitable giving guide. Yourmoneyyourwealth.com. Let’s see how you did on that true-false question.

Allison: Cash donations to charity can be claimed up to 60% of adjusted gross income, or AGI, while donated appreciated assets can be claimed up to 30% of AGI? That’s true. Basically, we’ve got a couple of limitations. If you give cash directly to charity, you’re limited to 60% of your AGI for that cash deduction. If you give appreciated assets, you’re limited to 30% of your adjusted gross income. So this comes into play. Also, you really wanna take a look at your income, where you’re gonna fall so you can decide the best source from which to donate.

Joe: If you’re planning larger gifts, if you have $100,000 let’s say adjusted gross income and I have an appreciated asset that I want to give away, or give to a certain organization, I’m only going to receive 30% of that. You get a little bit bigger bank for your buck, if I gave cash. But again, this is a limitation based on adjusted gross income. If you have a smaller adjusted gross income, you will probably run into these limitations a little bit earlier. These are people that are retired, that are creating income, that are really managing the taxes here. It’s just coming up with the right strategies to make sure that you understand limitations as you’re giving these gifts. All right, let’s get into strategy 3 – Qualified Charitable Distribution

Strategy 3: Allison: Here’s a strategy that helps you avoid the IRS altogether, and who doesn’t like that? You can actually give directly to charity from your IRA. What that does is that keeps the income from even showing up on your tax return. So it’s like getting a tax deduction, but without even having to deal with your itemized deductions, because the money never even shows up in your tax return to begin with.

Joe: A couple of reasons why you want to do this is that, if I’m taking a distribution from the IRA, Right? Let’s say I take a $30,000 distribution. I want to give $30,000 to charity. Well, that $30,000 is going to show up on my tax return. It’s going to add up to my adjusted gross income. It might add up to my modified adjusted gross income. But I have a charitable deduction on the other side that will offset it. But because it’s on my tax return, I could potentially pay higher Medicare premiums. I could get stuck in some phase-outs and things like that. So you could just bypass that altogether and go directly to the charity.

Allison: That’s exactly right. So it’s a win-win. It helps you avoid some other higher tax issues as well. There are a couple of rules you have to follow. You do have to be at least 70 ½ to take advantage of this strategy, and it is limited. You can do up to $100,000 per person. So if you’re married, filing jointly as a couple, you could ‘gift up to $200,000 directly from your respective IRAs.

Joe: I could give part or all of my required minimum distribution directly to a charity. So at 70 ½ I hit my RMD age. Now instead of taking the RMD. I don’t necessarily need it, I don’t have to spend it. I’m going to bypass the IRS and go directly into the charity, but the Secure Act and the Secure Act 2.0 have pushed those RMD ages a little bit older, but still the QCD is still based on 70 ½ . So it’s 70 ½ per IRA. So if you’re married, you could give your RMD up to that $100,000 from your respective IRA directly to charity. Let’s go to Strategy 4.

Strategy 4: Allison: Donor-advised funds. If you want to give a larger amount or you want to speed up where you’re giving your money. You can add money to a Donor-Advised Fund. You could take several years worth of your future contributions and ‘gift it all at one time. Into this fund, you get a tax deduction today, this year for the total amount that you put into that donor-advised fund. And then from that fund, you can ‘gift’ to the charities, nonprofits, foundations, et cetera, of your choosing over whatever timeline you want. So you’re getting the upfront donation and deduction now, but the charities are getting the money over the time that you decide. In addition, because you’re giving that initial donation now, it can help get you above that standard deduction limit with your itemized deductions. It also allows you to potentially ‘gift more to those charities over time because when you put that money into the donor-advised funds, those dollars get invested into a portfolio that makes sense based on your goals and objectives for those dollars. And as they’re growing over time, it actually gives you more that you can give to charities, as you want to.

Joe: Going back to our first strategy of bunching, right? So instead of saying, Hey, I’m going to give this organization $10,000 a year, that was my planned gift. That’s what I’ve been giving to this organization for years. But you know what? I didn’t receive any tax deduction from it, so I’m going to bunch it and I’m going to give that organization $30,000 this year and I’ll get that tax deduction. But I have to let them know, Hey, I’m going to give three gifts or three years of gifts in one. But now, as we fast forward to the donor-advised fund. This allows us basically to control the money and still give that charity $10,000 per year. I put $30,000 in. I received that $30,000 tax deduction this year. And as Allison just said, is that I can still distribute that money out as I wish so that charities can still feel like they’re getting that gift year in and year out.

So a donor-advised fund is a really awesome strategy, especially if you have a high income year. If you’re looking for tax deductions in a high income year, now these have to be established by year end. So it’s like, all right, well, here I have stock options. I sold my business. So these are very, very good strategies to help create that larger tax deduction to help reduce your taxes, but still doesn’t disrupt basically your plan giving strategy each year.

Strategy 5: Joe: Here’s another one. Gift annuity. This is really good for retirees.

Allison: Yeah, this is one of two split-interest gifts that we’re gonna talk about. First one here is the charitable gift annuity. This is where you could give a donation to an annuity, typically a foundation, a school, things like that. And you’re gonna get a partial deduction for the amount of your gift. In exchange for that, the annuity or the charity is going to pay you a lifetime income stream based on the amount of the gift and your age. So the younger you are, the lower that number, that annual income is going to be the older you are, the higher it’s going to be. And then upon your death, the charity is going to keep the remainder of that gift, but it gets you a partial deduction now as well as an income stream. And then the charity is gonna get to use those dollars at the end of your life going forward.

Joe: Yeah, split-interest. So you’re basically taking advantage of that charitable gift today, and then the charity is going to ultimately take full control over those dollars at your passing. So if I’m looking to retire here in the next couple of years. And I want to make sure that I give to a certain organization. I would look into that because you could plan a gift and you split-interest that overall gift. You get a great tax deduction up front today. They’re also going to pay you a fixed interest rate based on, as Allison said, your life expectancy. So you get a fixed, guaranteed income stream. And then at the passing it goes to charity, so you don’t necessarily have to give that large gift here today to get that big tax deduction. It goes at the end of your life, but you can still reap the rewards as you’re living. I know we’re getting a little bit more complex, so to take advantage of some of this stuff, go to our website, yourmoneyyourwealth.com, click on that special offer this week. It’s our Tax Smart Charitable Giving Guide. Go to yourmoneyyourwealth.com, click on the special offer. It’s a Tax Smart Charitable Giving Guide. Your Money, Your Wealth®. We gotta take another break. We’ll be right back.

Joe: Hey, welcome back to the show. Show called Your Money Your Wealth®, Joe Anderson and Allison Alley today. Trying to make you a little bit more tax smart when it comes to your charitable giving. Speaking of go to YourMoneyyourwealth.com, click on that special offer. It’s a Tax-Smart Charitable Giving Guide yourmoneyyourwealth.com. Let’s see how you did on that true-false question.

Allison: You must receive a written acknowledgment from your charity to substantiate all contributions over $250? That’s true. Any donation over $250, your charity is required to provide you written acknowledgment of the gift. That’s important. It also shows that they do good record keeping and that’s going to be part of the vetting that you’re going to want to do before giving money to charity.

Joe: You don’t necessarily want to give a bunch of money away to charity thinking you’re going to get a tax deduction and lo and behold, it’s not really an organization at all.

Allison: Gotta make sure they’re on the up and up.

Strategy 6: Joe: Let’s go to strategy number 6. This is a CRT or a Charitable Remainder Trust. A lot of different names here for it or a tax exempt trust I’ve heard. Basically the concept is this; you’re the donor. You’re the individual. You have a highly appreciated asset. It could be a part of a business. It could be real estate. It could be stock. It could be any non-qualified asset that you don’t necessarily want to sell because you’re going to get hammered in tax. Well, what you could do is you could set up a CRT or a charitable remainder trust. Again, this is another split interest gift. You put the asset in the trust. The charity is a tax exempt organization. They sell that asset. They pay zero tax. What do you receive? You’re going to receive payments from that asset over your lifetime, and when you pass, then the money goes to charity. It’s similar to what we talked about with this charitable gift annuity. Here you’re giving assets to an organization. They’re giving you a fixed rate of return over your lifetime based on life expectancy and age. And then the remainder goes to charity. Here, you’re going to control it a little bit differently. You’re going to set up your own trust, your own foundation, if you will, sell it, get that income stream, and then it will go to the charity.

Allison: Correct. And this has, is pretty complex, as you mentioned. There’s also some costs associated with setting up your own trust. So it is recommended that something like this be used if you’re going to be making a donation of at least $100,000 to $250,000 to really make it worthwhile.

Joe: Wow. Compliance.

Allison: Just saying it’s expensive. You gotta make it worth it.

Charitable Plan

Joe: Let’s look at some planning elements here. Okay, consider gifting amounts. How much money you’re gifting is going to determine your overall strategy, right? So if you’re giving large amounts of gifts, you probably want to get a little bit more complex. If I’m giving a few $100, you could probably just go ahead and cut that check. Vet your charities.

Allison: Yes, you should vet your charities. There are a couple of organizations that you can take a look at. You can also go to the IRS website to see your charity’s tax returns. The organizations that do rate charities are Charity Navigator and the GuideStar by Candid. You can go to both of those websites. And check out the charities, check out their leadership, their programs, the overall organization. In addition, on your charity websites, you should see these two labels if they’ve been vetted by either of these two organizations.

Joe: And then what strategies are gonna work best for you? You know, this is gonna be dependent on how sophisticated you want to get. Basically how large of a gift that you’re really planning on giving. Do you want to give it now or do you want to give it later? Do you want to give it at death? Then just write it down and make sure that you implement the overall strategy. All of this is really nothing unless you actually put the plan into action.

All right, let’s switch gears a little bit. Let’s turn this show over to the viewers.

Allison: First question comes from Mallory in Hawaii. “What are the tax benefits if I name a charity as a beneficiary in my will?” Well, if you just want things to go to charity upon your death, great. If there’s a way for you to also get a tax benefit during your lifetime before you pass away, then some of these prior strategies that we’ve been discussing might be the way to go.

Joe: Yeah, if you just name a charity as the beneficiary of your will, it just goes to charity. There’s no tax benefits for the donor in that given year. Which is fine, which is great if at the end of life this is where you want your money to go, but you might wanna look at some other strategies. The IRS has put this in the tax code. If you plan a gift, if I’m charitably inclined, the IRS will forgive a tax because the money’s going to go somewhere. Do you want it to go to the IRS or do you want it to go to an organization that you really care about? So stepping back and doing some overall planning is probably the best bet for that particular situation.

Joe: So what did we learn? What did we take away today? Smart, charitable giving, analyze your needs and goals. Just make sure that you have it in your overall financial plan. Now you can get into some tax saving strategies and then develop a plan giving strategy. Of course, if you want more help go to our website, yourmoneyyourwealth.com, click on the special offer. It’s a tax smart charitable giving guide. That’s our gift to you today. Allison, thank you for joining me today.

Allison: Yeah, it was my pleasure.

Joe: We will see you next time, folks. Have a wonderful weekend.


• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience, and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.

CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.