Smart Gifting Strategies: How to Maximize Your Tax Deduction While Supporting Causes You Love

At AIO Financial, many of our clients want to do more than just grow their wealth—they want to give back. Whether you’re already supporting charitable causes or considering a donation this year, there are smart, strategic ways to give that can increase your impact and reduce your taxes.

In this blog (and podcast episode), we’ll explore how you can:

Let’s look at how to make your giving go further—for your community and your financial plan.

Why Strategic Giving Matters

With the standard deduction currently high ($14,600 for individuals and $29,200 for married couples in 2024), many people don’t benefit from deducting charitable donations unless they itemize.

But that doesn’t mean your giving can’t also help you reduce taxes.

By using strategies like appreciated stock donations, QCDs, and DAFs, you can:

Let’s break it down.

📈 Strategy #1: Donate Appreciated Stock

If you’ve owned stocks, mutual funds, or ETFs for over a year and they’ve increased in value, consider donating them directly to charity rather than selling them.

Why It Works:

Example:

You bought stock for $1,000, and it’s now worth $5,000.

Sell it, and you may owe taxes on the $4,000 gain.

Donate it directly, and you get a $5,000 deduction and pay zero taxes on the gain.

✅ Make sure the organization can accept stock donations. A Donor-Advised Fund can make this process easier.

🔁 Strategy #2: Give from Your IRA Using a Qualified Charitable Distribution (QCD)

If you’re age 70½ or older, you can donate up to $100,000 per year directly from your Traditional IRA to a qualified charity through a QCD.

Why It Works:

Example:

Your RMD is $15,000. You give $10,000 to a charity via QCD and only report $5,000 as income—saving taxes and supporting a cause you love.

💡 Especially useful if you don’t itemize, since QCDs reduce income without needing to claim a deduction.

Be sure to inform your tax preparer – brokerage houses will just report the amount taken out, not that it was a QCD.

📦 Strategy #3: Open a Donor-Advised Fund (DAF)

A Donor-Advised Fund is like a charitable investment account that allows you to:

Why It Works:

Ideal for:

🎯 Combine These Strategies for Even Greater Impact

You don’t have to choose just one approach. Many of our clients use a combination for tax efficiency and flexibility:

Together, these methods allow you to support charities you care about while building a tax-smart, long-term giving plan.

❤️ Giving with Impact: How to Choose Effective Charities

Now that you know how to give smarter, let’s talk about where to give. https://aiofinancial.com/effective-altruism/

Choosing where to give is just as important as how much you give. With so many nonprofits out there, it can be hard to know which ones are truly making a difference. Fortunately, several independent organizations evaluate charities based on effectiveness, transparency, and measurable outcomes—so you don’t have to start from scratch.

Some of the most trusted charity evaluators include:

These platforms can help you identify charities that align with your values and use donations efficiently. But even with these tools, it’s important to consider some key factors when making your decision.

First, look for evidence-based impact. The most effective organizations measure their outcomes and use data to refine their programs. Instead of focusing solely on overhead ratios, consider how well a charity turns dollars into real-world results—whether that’s lives saved, emissions reduced, or policies changed.

Second, review a nonprofit’s transparency and accountability. Does the organization publish annual reports, audited financials, and program evaluations? Are they open about their successes and their challenges? The best nonprofits communicate clearly with donors and stakeholders.

Third, evaluate the charity’s cost-effectiveness. Some programs can have exponentially greater impact per dollar than others. For example, funding mosquito nets to prevent malaria can cost less than $5 per net and save lives, while other types of giving may be far less efficient in achieving outcomes.

Finally, consider the scalability and room for more funding. Some nonprofits are already well-funded or operating at capacity, while others are poised to expand and could do much more with additional resources.

By combining these evaluation tools and key criteria, you can ensure your giving is not only generous—but also smart, strategic, and deeply impactful. In the sections below, we’ve highlighted several high-impact charities working across different focus areas, each with a strong track record of making a difference.

🐾 Animal Welfare

Animal suffering is widespread and often underfunded. These groups are leaders in reducing harm and promoting sustainable change:

🌎 Climate Change

Every dollar toward climate solutions can have an exponential impact. These organizations work globally to reduce emissions and protect the planet:

🌍 Combating Global Poverty

The most cost-effective programs in the world are tackling poverty using rigorous research and direct support:

🧬 Saving Lives & Public Health

These nonprofits are among the most cost-effective at preventing deaths and improving global health:

📰 Free Media & Public Awareness

Informed societies are stronger societies. These organizations promote independent journalism, free information, and public education:

🧠 Final Thoughts

Whether your passion is the environment, education, public health, animal welfare, or economic justice, there’s a way to give that makes a real difference—and offers meaningful tax benefits.

At AIO Financial, we specialize in personalized charitable giving strategies for individuals, families, and foundations. We’ll help you identify the most effective way to give based on your financial situation and personal values.

💬 Ready to Give Smarter?

If you’re planning a gift this year—or want to review how your giving fits into your overall financial plan—we’re here to help.

✅ Schedule a free consultation at aiofinancial.com to start building your smart giving strategy today.

Let’s make your generosity go even further.

Transcription from video:

I’m going to talk about charitable giving strategies

so how to maximize the tax deduction

to support non profit organizations

so why is it useful to be strategic

because he can give more

if you’re getting a tax credit for

or tax deduction for it it’ll allow you to give more

and support some great organizations

so we’re going to talk about three strategies

one is donate appreciated stock

so if you sell stock that has grown in value

you have to pay capital gains tax on that growth

it’s usually 15% 20% if you have high

real large amount of capital gains

high income but usually 15%

so that’s 15% less that can go to the charity

if you just give them appreciated stock

you don’t pay the capital gains

and the charity doesn’t either

it’ll go right to their brokerage account

they’ll sell it

they get the money without paying taxes great

you do want to get long term capital gains

you have to hold the asset for more than a year

second one is

use a qualified charitable deduction from your IRA

so if you’re seventy and a/2 that’s a weird age

but seventy and a/2 or older

you can take money out from your IRAs or your 4

1 k or your well

just any tax deferred account and uh

you that reduces

you’re 73 or in the future 75

and you have to do a required minimum distribution

it’s about 4% a year you have to take out each year

this satisfies that so

the advantage when you’re seventy and a/2

is you’re giving money that you haven’t paid taxes on

so if you give a couple thousand dollars from an IRA

that’s money that’s not you

you haven’t paid taxes on it

if you take it out of the IRA

it counts as as income for your taxes

so if you just give it directly to the charity

no taxes on that money

the charity doesn’t pay taxes on it it’s great win win

when you have to required distributions

that’s gonna count as income and and be taxed as

as income and any amount that you use

let’s say you have to take 10,000 out a year

um in in it will

it’ll vary their age and the value of the accounts

but uh

that any money of that that you send to charities

you don’t pay income tax on

so you get a good tax deduction

and if you’re just doing standard deduction

this is a great way to get some credit

for the charitable contributions

you do have to tell your tax preparer

or if you’re the tax preparer

you have to remember that it went to a charity

because the brokerage

house is going to send you a 1099

and it’s just gonna say hey

you took out $10,000 it’s not gonna say hey

five of that went to a charity

it’ll just have the amount that came out

and how much taxes were withheld

you have to record hey

some of that went to a charity

because Schwab or Vanguard or Fidelity

they’re not gonna identify oh

did this go to a 5 0 1 c 3

that’s active

you have to defend that and if you get audited

you just have to show hey

this money did go directly to a qualified charity

and I don’t have to pay taxes on it

it’s great uh

the third one is a advised fund

so for most of us the standard deduction is

is pretty high standard deduction 2025 for

let’s just see for uh

married couple what are we looking at

um life time and credit standard

here we go $30,000 single 15,000

so $30,000 for $30,000 for a married couple

you get to

part of that calculation is either take 30,000

or the itemized deductions

you can take your real estate your house taxes

mortgage interest car tags

and then charitable contributions but a lot of times

let’s say you’re if you have a mortgage

your your taxes let’s just say 10

15,000 you still have to donate another 15,000

just to get up to that standard deduction

so if I give a $10,000 a year to charity

I’ll never get a a benefit from that

I’ll the tax deduction if I’m just doing 10,000 a year

and my itemized deduction is 15

well that gets me up to 25

but the standard deductions 30

I’m always just gonna take the standard deduction no

benefit in my charitable contributions

so a diet don’t a donor advised fund

it’s just an account set it up at Schwab

Fidelity Vanguard at any brokerage house or at a bank

whatever you want to do

you set it up and you can contribute to it

let’s say five years of donation

so I’ll put 50,000 into it

well now I’m well above that standard deduction

I’m gonna get a tax benefit a a a reduction a

in the year that uh contribution

I put my 50,000 Stoner Advice fund and it’s an account

I can invest in stocks bonds

I can invest in exchange trade funds

mutual funds whatever I want to do

and then I can distribute it over the next five years

I can do my 10,000 a year over the next five years

I get my 50,000 dollar tax deduction

I’m getting well above the standard deduction

I’m getting a benefit

and then I can distribute it over the next 10 years

I can distribute it and it’s really easy to distribute

they have a list of what’s not list

you just type in the charity

if it’s a registered 5 0 1

c 3 it pops up sends a check to him great

super easy to take care of

and you could do that throughout the year

uh it’s a great way to get some benefit for your tax

for your charitable donations alright

those are the three strategies

you can of course combine

them do appreciated stock to take money from IRAs and

um

yeah and do the uh advice fund

oh and charity yeah

that’s a good one

stock can go right into the donor advice fund

you don’t pay capital gains on it

it’s sitting in that account

and then you distribute it

I mean

that’s that’s a wonderful invest funds are great

you can invest them safely conservatively aggressively

you can use socially

funds so that it’s making an impact

just as an investment as well

Community Investment notes

you can do a lot of a lot of nice that fund as well

yeah and donations

you get the best benefit if you’re

if you’re reducing yourself high tax bracket

so if you’re in the 32% tax bracket well sure

if you can reduce your income in that year

you’re getting a better benefit

than if you’re reducing it

in a 22% tax bracket year

okay great those are all good

effective charities we

we’ve had this question from clients just who do I to

what’s a good charity to give to

well it depends on what you wanna support um

you can help save lives help reduce population

you can help animals you can help climate changes

I mean there’s a ton of

there are some good charity of give well

is an efficient way to help saving lives

Charity Navigator is a good um

option or website to evaluate

it’s worth doing some research

cause there are some very inefficient charities

and you want your money to make as big of an impact

as you can impact matters

animal charity evaluator um

some of the key things you

Wanna look at is evidence based impact

not that

they’re just throwing money at different projects

cause it sounds good that they’re looking at

you know

how they can make the impact they can transparency

accountability cost effectiveness

and that they can use your funds

that they’re not already supported and

and that they’ll put your to good use um

some of the top causes there areas for animal welfare

animal charity evaluators

the Human League good Food Institute

analytics sites

that’ll help you make a good impact if you want

animal welfare animal causes um

causes for climate change

organizations that are supposed to make or

or I’ve interviewed each of these but they um

have a good impact one tree planted

this is for climate change Rainforest Foundation

uh

burn stoves trying to help with climate changes more

I’m sure there’s a lot more

these are three that I’ve seen or that I’ve talked to

um

for global poverty again give give directly

you’re just giving money

which is a very efficient way to support

that’s probably what you should compare against

your complicated project versus just uh

giving directly

oxfam J PEL is the poverty action laboratory

they do a lot of studies uh

in impact for poverty action

a good organization

both of these are from professors or university driven

and they do a lot of um

randomized studies to determine what most impact

I spoke with someone from J

Pal who was saying

one of their biggest impact projects is

just giving people business

necessary equipment plus money

so they don’t sell that equipment right away

and then they can grow

generate an income and move from there um

I know aux fans sometimes you’re

you’re buying a goat or

or chickens or animals to be their business uh

start point um and yeah the um IPA the

impact for poverty poverty action

they do

they have a lot of nice studies for different areas

uh JPEL as well

for micro or for different types of projects to uh

see what will make the biggest impact

and I think that’s that’s key is again

you’re the money on taxes so you can give more

but you want to make sure that money is doing something

helpful to the types of causes

you want to do and I’d actually put JP and IPA

I know they’re in global poverty

but they really help

evaluate in a lot of different areas

saving lives malaria

deworming Helen Helen Institute for Free Media

NPR is on this list Propublica Wikimedia

DMI and center for Public Integrity

and these are just some ideas

you know research what what drives you

motivates you what you wanna see doing better

uh political contributions are not tax so it

it’s kind of a separated

that’s just money that you’re giving not um

you’re not getting any for it

at least at this point a strategic giving

you want a good impact

plus the tax savings gives you the biggest impact

let us know AIO Financial

we are fee only financial planners

we’re fiduciaries

we specialize in socially responsible investing

and we work a lot with expats

um yeah

let me know if you questions

any comments I appreciate it