Plan your Giving in June
Cole says stewardship is the only area of life that can't be faked. You either are doing it, or you are not, and the evidence shows up in the small decisions.
Charitable giving is one part of stewardship and the evidence is not in the size of your donation, it’s in whether your family ever sat down and decided what they actually wanted their giving to be for. Most families have not.
June is a good month to start. The decisions families make in June are categorically different from the ones they make in December when families normally decide their giving, and the difference is rarely about how much, but rather, how thoughtfully.
Why June changes the answer
In June, you have six full months of cash flow data. You know what your bonus was, what stock vested, what your business or career looked like through Q2. You have a credible projection for the rest of the year. That means you can decide on a giving target with information, not just instinct.
You also have six months of runway, time to accomplish more complex tasks. A donor-advised fund can be opened, funded, and used multiple times before December. A qualified charitable distribution can be planned around your required minimum distributions without a deadline crunch. An appreciated stock donation can be coordinated with the rest of your portfolio. None of these are hard. All of them get harder in December, when the queues at every IRA custodian are full and the holiday season is competing for your attention.
Three structures worth understanding
Donor-Advised Funds (DAFs)
A donor-advised fund is essentially a charitable savings account. You contribute appreciated stock or cash to the DAF, get the tax deduction in the year you contribute, and then recommend grants to specific charities over time. The money inside the DAF grows tax-free until you grant it out.
Why this matters in June: if you have appreciated stock that has done well year-to-date, you can fund a DAF this year, take the full deduction this year, and grant the money out to charities over the next several years on whatever timeline makes sense. For a family expecting a strong income year, a DAF can convert a one-time tax event into multi-year giving capacity.
Qualified Charitable Distributions (QCDs)
If you are 70 1/2 or older, you can transfer up to roughly $108,000 directly from your IRA to a qualifying charity each year. The distribution counts toward your required minimum distribution and is excluded from your taxable income entirely. (RMDs, required minimum distributions, are mandatory withdrawals the IRS makes you take from retirement accounts starting at age 73.)
Why this matters in June: QCDs need to be processed by your IRA custodian before December 31. December has long processing queues. A QCD initiated in June or July clears with no stress and can be repeated annually as part of your standard giving rhythm.
Appreciated Stock Donations
Donating appreciated stock that you have held for more than a year is one of the most tax-efficient ways to give. You avoid the capital gains tax you would have paid on a sale, and you get a charitable deduction for the full fair market value of the donated shares.
Why this matters in June: identifying which positions to donate, in what amounts, requires looking at your unrealized gains, your overall concentration, and your other tax planning. Six months of runway lets you stage donations through the year, smooth out market timing, and coordinate with the other moves you might be making (concentrated position management, tax-loss harvesting, charitable giving) so each one supports the others.
The conversation underneath the structures
Kurt asks a sharpening question: Is the giving the legacy, or is it the impact of the giving? Different families answer differently. Some are giving for the giving's sake, because generosity itself is the value being passed on.
Others are giving because there is a specific cause or person whose life will be measurably different. Both are legitimate. They lead to different structures and different timelines.
Most families can articulate the causes they care about. Far fewer have written it down or talked about it as a household. Even fewer have connected the giving to a specific structure or timeline. June is a good month to do that. Not as a planning meeting. As a conversation about what you would want your giving to look like five years from now if you decided to take it seriously.
"It’s what you do with the money you have that demonstrates your values. Since we have a hard time articulating our values, we therefore have a hard time talking about money." Kurt Box, Advocates Wealth Planning
How we work with clients on this
For families who want to be intentional about giving, the first conversation is rarely about tax structures. It is about what they care about and what they want their giving to mean. The structures come second, and they come quickly once the values are clear.
A DAF is the right answer for some families. A QCD is the right answer for others. For most families with appreciated stock and a multi-year giving horizon, some combination is the answer.
We do not have an asset minimum to have this conversation. If you are wondering whether any of this applies to your family, let's talk.
Let's Talk: theadvocateswealth.com/lets-talk
FAQs
-
No. Most major DAF sponsors have low or no minimums to open an account. The strategic value of a DAF comes from how you use it, not how much is in it.
-
A QCD comes directly from your IRA and is excluded from your taxable income. A regular charitable deduction reduces your taxable income only if you itemize. For most retirees who do not itemize because of the higher standard deduction, the QCD is significantly more tax-efficient.
-
Yes, if you have held it more than a year. Donating appreciated company stock is one of the most tax-efficient ways to reduce a concentrated position while supporting a cause you care about. The donation eliminates the capital gains tax on the donated shares.
IMPORTANT DISCLOSURE INFORMATION
Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk. Therefore, there can be no assurance that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Advocates Wealth Planning (“Advocates Wealth Planning”), or any non-investment related content, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Neither Advocates Wealth Planning’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Advocates Wealth Planning is engaged, or continues to be engaged, to provide investment advisory services. Advocates Wealth Planning is neither a law firm nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, no portion of this discussion or information serves as the receipt of, or a substitute for, personalized investment advice from Advocates Wealth Planning. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.theadvocateswealth.com. The scope of the services to be provided depends on the needs and requests of the client and the terms of the engagement.
Please Remember: If you are an Advocates Wealth Planning client, please contact Advocates Wealth Planning, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless and until you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.