Yield & Spread has launched its free Giving Guide to help people residing in the US navigate financial planning strategies for donating. While there isn’t a one-size-fits all donation strategy for everyone, there are some common financial planning guidelines that will help most donors figure out what and how they want to give.
You can download the Giving Guide here.
What The Guide Covers
Here are the general themes covered in the guide:
- Donating cash vs. securities (stocks, bonds, funds, ETFs)
- Pros and cons of donating from your brokerage account, donor-advised fund (DAF), or individual retirement account (IRA)
- Common tax optimization strategies like itemizing and bundling/bunching
- Adjusted gross income limits for charitable donation deductions
The guide covers donations only to qualified, 501(c)(3) organizations. It is meant to be a quick snapshot, covering the majority of what you need to know to donate tax-effectively, but obviously does not substitute consulting a tax advisor. If you would like to dive deeper into any of the topics in the guide, I have written a number of blog posts here in the Giving Section of my blog to complement the guide’s release.
What The Guide Does Not cover
The rules for donating to private foundations as well as the tax impact are different from donating to public 501(c)(3) nonprofits in the United States. This guide strictly pertains to qualified 501(c)(3) organizations only.
There are many types of assets you can donate to charity, including real estate, cryptocurrency, life insurance policies, and more. But for the purpose of this Giving Guide, I stuck to the most common forms of donations: cash and securities (stocks, bonds, funds, ETFs).
There are also other ways to donate to charity, for example via a charitable trust or private foundation, but I chose to cover the most common forms of donating: from personal banking and investment accounts.
Inspiration for Giving Guide
Yield & Spread is a nonprofit whose mission is to promote personal finance as a force for good. We believe that increasing financial literacy creates more opportunities for people to give back, in that when we can better optimize our own finances, we are in a much better position to help others.
Here in the US, our financial system and tax structures are challenging to navigate. And I’ve found that when it comes to giving, there are even fewer quality financial resources that pertain to donating. Many of the resources I have come across are from marketing materials created by providers and/or charities themselves, resulting in misleading information and an overpromise of tax benefits when donating.
In speaking with many individuals about their financial plans for giving (please see our free financial coaching program for do-gooders), I have found that many people are so focused on whether or not they are donating in a tax-advantaged way that it becomes a point of friction. It often delays their donations, or worse…prevents them from donating in the first place. In these cases, perfect is the enemy of good. My goal is to help people elevate their baseline understanding for financial planning and donation strategies to enable them to make donations with confidence. As such, I want to be clear that this guide wasn’t created to just promote charitable tax breaks. The primary focus remains on making high-impact, effective charitable donations.
The information in the Yield & Spread Giving Guide is for informational and educational purposes only. It is not intended to substitute for obtaining accounting, tax, or financial advice, and may not be suitable for every individual. Yield & Spread is not a registered investment, legal or tax advisor or a broker/dealer.
Yield & Spread did review this guide three separate tax-advisors to ensure for quality control.
Outside of my involvement in EA, I am a member of the FIRE movement (Financial Independence Retire Early). At the age of 32, I left my full-time job in corporate real estate and became an "early retiree". This has allowed me to dedicate my time to running Yield & Spread, where 100% of its profits go to The Life You Can Save.