Are you planning for your charitable deductions in 2021? Whether you give all throughout the year, or all at once, donating to charity is a wonderful way to support an organization of your choice. Charles Schwab donor-advised funds are a great option for your charitable deductions 2021.
Charles Schwab Donor Advised Funds
Schwab Charitable ™ is one of the largest national providers of donor-advised funds. Alongside several philanthropic services, its donors supported more than 113,000 charities in the 2021 fiscal year through 855,000 grants, totaling $3.7 billion. Despite the pandemic and the difficulty it caused, Schwab Charitable donors were extraordinarily generous.
History of Giving
Over the past several years Charles Schwab donor-advised funds have made a significant charitable impact. Donors recommended grants to 12% more charities than the previous fiscal year and nearly 30% more organizations than in the fiscal year 2019. Furthermore, in the fiscal year 2021 there was a 48% increase in the number of grants recommended which were not designated for a specific purpose. These unrestricted grants give nonprofit organizations greater flexibility in delivering critical services, which has been crucial during this time of great need.
Financial Advisors Improve Charitable Deductions 2021
Financial advisors use charitable planning to help clients incorporate philanthropy into their overall financial planning. This is becoming an increasingly popular service, with more than 85% of independent advisors offering charitable planning in 2020.
Additionally, financial advisors are well-positioned to offer advice on charitable planning that minimizes taxes and allows the client to maximize their charitable impact. For example, donating appreciated non-cash assets to charity can be very beneficial. This strategy allows the donor to eliminate the capital gains tax that would be incurred if the stocks were sold, and proceeds were donated. Essentially, this allows the client to donate 20% more to charity.
In fact, in the fiscal year 2021, around 60% of Schwab Charitable contributions were non-cash assets. This includes private business stock, restricted stock, and publicly traded securities, making it a smart choice for many donors.
Donating Non-Cash Assets
According to the Federal Reserve, 89% of wealth is in non-cash assets. Therefore, it is only logical that those should be options for donating. Furthermore, donating non-cash assets can be a tax-efficient way to make a significant impact on your charitable giving. Your financial advisor can help you create and refine a strategy that will maximize your charitable deductions for 2021 while supporting your philanthropic goals.
Be Tax-Smart and Give More
There are two main ways that donating non-cash assets can unlock additional funds for charity. First, you potentially eliminate the capital gains tax you would incur by selling the assets and donating the proceeds. Second, you can claim fair market value charitable deduction and pass those savings on in the form of more charitable giving. Some non-cash assets that can be donated include:
- Fine Art and Collectibles
- Restricted Stocks
- Private Equity
- Real Estate
- IPO Stock Publicly Traded Securities
- Private Business Interests
Maximizing Charitable Deductions 2021
If you aren’t taking advantage of a financial advisor’s expertise for charitable giving, now is the time to start. It’s not too late to maximize your charitable deductions for 2021. Let your financial advisor help you minimize taxes while making contributions to your favorite organizations. To learn more, contact Argent Bridge Advisors today!