By Chad Brueckner, Arvest Trust Officer and Vice President
During the holiday season, it’s easy to see firsthand the generosity that runs through our community. This spirit is never more apparent than during community-wide efforts like “Giving Tuesday,” which takes place on Dec. 2 this year.
Giving Tuesday is an annual global movement celebrated on the Tuesday after Thanksgiving, encouraging generosity through charitable giving and acts of kindness. It’s an excellent time for individuals and businesses to evaluate how philanthropy can significantly benefit their communities, businesses, families and financial health.
Key benefits of charitable giving
It can instill family values, so gifts keep on giving. Strategic giving is one of the most effective ways to engage your children and grandchildren in conversations about wealth, stewardship and community responsibility. The holidays provide a perfect opportunity to discuss which causes matter to your family and make decisions together, turning financial planning into a valuable life lesson.
You can maximize your tax advantages. If you itemize deductions, your charitable gifts could significantly lower your taxable income. By donating long-term appreciated assets, like stocks or mutual funds, you can potentially unlock a double tax benefit: avoiding the capital gains tax you’d owe if you sold the asset and taking a charitable deduction for the full fair market value.
You can simplify your estate. For those with substantial estates, incorporating charitable giving into your estate plan can help reduce potential estate taxes, ensuring that more of your wealth is passed on to your heirs and the causes you cherish.
Common misconceptions about charitable giving
You have to be a millionaire to make a difference. The key is to be intentional and integrate your giving into your broader financial plan, instead of simply writing a check. This strategic approach allows you to support the causes you care about while also maximizing your financial and tax-related benefits.
Charitable giving is an end-of-the-year activity. The most effective philanthropy is proactive, not reactive. Integrating giving into your year-round financial plan enables more strategic decision-making.
Giving cash or writing a check is the best way to donate. Donating long-term appreciated assets (like stocks, mutual funds, or real estate) is one of the most powerful strategies. This allows you to potentially eliminate the capital gains tax you would have paid if you sold the asset.
Setting up a charitable plan is overly complicated and expensive. A Donor-Advised Fund (DAF), for example, is a straightforward and cost-effective way to contribute assets, receive an immediate tax deduction and direct grants from the fund to your favorite charities over time, all from one simple account.
Giving money away means giving away control over how it is used. Strategic giving vehicles, like DAFs, are designed to provide you with ongoing influence over how your money is used.
As we enter this season of giving, I encourage you to think proactively. By aligning your generosity with an innovative financial strategy, you can do good for the community and do well for your family – all at the same time.
With more than $27 billion in assets, Arvest is a full-service bank that delivers financial solutions to individuals and businesses of all sizes. Since entering the Kansas City market in 2009, Arvest has grown to become one of the top 20 banks and the sixth-largest mortgage lender in the region. The bank has 20 locations in the metro area, including eight in Johnson County.
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Arvest and its associates do not provide tax or legal advice. Arvest Wealth Management, Member FINRA/SIPC.
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