Smart Planning that Helps You Give Generously and Save on Taxes

This article is part of an ongoing series of financial planned giving strategies to help members of the Adventure Unlimited community.

Have you ever wondered what strategies you can use to invest in Adventure Unlimited? There are a variety of ways you can plan a gift to Adventure Unlimited in addition to naming us in your will or trust – gifts that, with the right planning, can benefit you, your loved ones and Adventure Unlimited in your lifetime.

There are creative ways to invest in Adventure Unlimited that also help reduce your tax liability.

What are some of the popular ways donors are giving in 2023? Here are three that might be worth considering:

Donate Your Required Minimum Distribution. If you have a regular IRA and were 72 or older as of December 31, 2022, by law you must take a taxable, required minimum distribution (RMD) from it annually. (In 2023, the minimum age for RMDs goes up to age 73.) The good news is, you can avoid being taxed on RMDs if you donate them directly to a nonprofit organization like Adventure Unlimited in the form of a qualified charitable distribution (QCD). But you don’t even have to wait until you’re 72 – you can begin making charitable distributions from your IRA when you’re 70½. 

Set Up a Donor Advised Fund (DAF). A Donor Advised Fund lets you set aside funds that can be used to make charitable gifts to multiple nonprofits, in whatever amounts you choose, now or in the future.  You qualify for an up-front charitable tax deduction, even if you wait a year or more to recommend grants from your DAF account to favorite charities. It works like this: 

• You open a DAF account with a Donor Advised Fund sponsor and make contributions to it.  You’ll receive a tax receipt from the DAF sponsor whenever you contribute to your DAF and can claim your DAF contributions as a tax deduction in the same year.
• The DAF sponsor holds and invests the funds in your DAF account until you’re ready to make grants to favorite charities.
• You direct the DAF to make distributions to Adventure Unlimited and other nonprofit organizations over time, from the balance in your DAF account. 

Making a gift now to Adventure Unlimited from a DAF doesn’t require using your current cash or investments – and it does have an immediate impact!

Take the Loss and Give Cash. While some investments have started to rebound, others could still be worth less than what you paid for them. You may wish to speak with your financial advisor about selling such assets and reducing your taxable income by claiming a capital loss. To reduce your tax liability further, you can then claim a charitable deduction (if you itemize) when you make a cash gift from the sale proceeds to a nonprofit like Adventure Unlimited. 

If you have questions about how Adventure Unlimited can fit into your philanthropic plans, please contact us at giving@adventureunlimited.org.