With the shopping frenzy of Black Friday and Cyber Monday, we now turn to #GivingTuesday which is a day of charitable giving. Started back in 2012, this important day has been growing by leaps and bounds. In 2014, non-profits raised $45 million and that figure grew to over $300 million in 2017!!! Now that is some great impact. However, if you consider that online sales from Cyber Monday topped $7.9 billion, we still have a long way to go to catch up. Imagine the positive change, if those numbers were reversed.
Over the last few years, Runnymede Capital Management has helped raise tens of thousands of dollars for the March of Dimes by sponsoring and walking in the annual March for Babies. We have also run a campaign to give clean water with Charity: Water. To put it simply, we believe in giving back to the community and creating a better world.
Here are 3 tips to help maximize your donations on #GivingTuesday.
1) Give highly appreciated securities, rather than cash
While donating cash is, by far, the most common method of charitable giving; in most circumstances, it is not the most tax-efficient way to give. Contributing stocks, bonds, or mutual funds that have appreciated over time carry some significant advantages.
Furthermore, given that we are almost 10 years into a bull market cycle, most investors are sitting on significant capital gains and don't want to have to pay a huge tax bill when they s
ell. Remember the more appreciation the securities have, the greater the tax savings will be!
2) Make a tax free distribution from your IRA
If you’re age 70½ or older, another charity-related tax strategy to pay attention to this year is a provision that allows IRA owners to make a tax-free distribution to a qualified charity. We have seen several of our clients take advantage of this smart strategy.
These qualified charitable donations (QCD) are tax exempt up to $100,000 as long as distributions come from a qualified account and are donated to a 501(c)(3). You should consult your accountant and/or investment advisor to use this strategy as part of your charitable giving and required minimum distribution.
3) Leverage matching campaigns
I have received several emails where charities are matching donations on #GivingTuesday. Furthermore, if you work for a large corporation, you may have a company match as well. This means your donation can have 2-5x the impact if you make it today. While many companies match dollars one-for-one, Exxon Mobil matches up to three-for-one!