At Gilda’s Club Madison, we are fortunate to be surrounded by a community of individuals who lead with generosity. Many of our supporters share that they want to leave something meaningful behind—not only for their families but also for the causes they believe in. One of the most powerful ways to do that is through charitable giving as part of end-of-life planning.
For those who are charitably inclined, aligning your giving with your financial plan can create significant tax advantages—while also ensuring your legacy reflects your values. Whether you want to make a one-time gift or structure a longer-term giving strategy, there are a variety of tools that can help you give wisely.
Qualified Charitable Distributions (QCDs)
A QCD allows individuals aged 70½ or older to donate up to $100,000 per year directly from their IRA to a qualified charity—such as Gilda’s Club—without counting that distribution as taxable income.
- This approach is particularly effective for those who:
- Don’t need their full Required Minimum Distribution (RMD)
- Want to reduce their adjusted gross income (AGI)
- Prefer a straightforward way to give
By donating directly from your IRA, you can avoid the income tax you would normally pay on that withdrawal, making QCDs a tax-smart way to support the causes you care about.
Charitable Remainder Trusts (CRTs)
A Charitable Remainder Trust allows you to convert highly appreciated assets (like stocks or real estate) into a lifetime income stream—while also benefiting a charity at the end of the trust’s term.
CRTs are ideal for donors who:
- Want to reduce capital gains taxes
- Need income for retirement or beneficiaries
- Want to leave a charitable legacy down the road
With this structure, you or your beneficiaries receive income for life or a set number of years, and the remainder goes to the charity of your choice. It’s a powerful way to combine philanthropy, tax efficiency, and income planning.
Donor-Advised Funds (DAFs)
A Donor-Advised Fund is a flexible, low-maintenance giving account that allows you to receive an immediate tax deduction and recommend grants to charities over time.
This may be a good fit if you:
- Want to separate the tax deduction from the decision of where to give
- Have a year with unusually high income (and need a deduction)
- Want to involve your family in long-term giving
DAFs are especially helpful for clients who are still considering where they want their gifts to go but want to lock in the tax benefit now.
Charitable Gift Annuities (CGAs)
A Charitable Gift Annuity offers a simple way to support a charity while receiving a steady stream of income for life. In exchange for a donation of cash or appreciated assets, the charity provides you (or a loved one) with fixed payments for life.
CGAs can be particularly appealing for donors who:
- Seek predictable lifetime income
- Want an immediate charitable deduction
- Appreciate simplicity without the complexity of a trust
Upon the donor’s passing, the remaining balance goes to the charity. CGAs combine a sense of giving back with the reassurance of financial stability in retirement.
Charitable Lead Trusts (CLTs)
A Charitable Lead Trust works in the opposite direction of a CRT. It provides immediate support to a charity for a set number of years, and then the remaining assets go to your heirs—often with significantly reduced gift or estate taxes.
CLTs are effective for donors who:
- Want to reduce the tax burden on their heirs
- Have a strong desire to give now, rather than later
- Are looking for an advanced estate planning strategy
This strategy is especially valuable in low-interest rate environments or when transferring assets that are expected to appreciate significantly.
Bequests: A Simple Yet Powerful Legacy Tool
A bequest is a provision in your will or trust that designates a gift to a charity upon your death. This is one of the most common and accessible ways to support organizations like Gilda’s Club, and it offers several advantages:
- Estate Tax Benefits: Bequests to qualified charities are generally 100% deductible for estate tax purposes, reducing the taxable portion of your estate.
- Flexibility: You retain full control over your assets during your lifetime and can revise your bequest at any time.
- Simplicity: No need to establish a trust or giving vehicle—just a clear clause in your will or trust document.
Bequests can be made in many forms: a specific dollar amount, a percentage of your estate, or the remainder after other distributions. And while simple, they can be deeply impactful in supporting the future of causes you care about.
What’s Most Important: Making It Happen the Right Way
In my work with clients, I often find that they already know what they want to do—it’s usually just a matter of how to make it happen. That’s where careful financial planning comes in. When talking with clients, our goal is to help carry out their charitable intentions in the most tax-efficient way possible, without disrupting other priorities like retirement, healthcare, or education planning.
Some clients prefer to give during their lifetime, while others are more comfortable including charitable gifts in their estate plan. Either way, there are ways to optimize the outcome—both for your financial picture and the causes you support.
If you have any questions, please reach out to your accountant or I would be happy to help walk through the strategies that align best with your goals.
Warmly,
Eric F. Johnson, CPFA
Financial Advisor – Partner
Financial Integrators
(608) 673-3757
www.financialintegrators.com
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Financial Integrators and Cambridge are not affiliated. Cambridge does not offer tax advice. Please consult your tax advisor. Neither Cambridge nor Financial Integrators offers legal advice.