Tyler Kolota
Posts 5
Comments34
Also if you live in the US & want to decrease the cost of your donations by like 10% and/or give like 10% more, one option is to use a 100% equities investment account (like all S&P500 or something) to save all the money you would donate each year until you can make a big enough stock-transfer donation to an effective organization to reduce your tax bill.
100% Equities
In standard personal finance, you lower risk as you age to protect your retirement security. In "Investing to Give," the philosophy is different.
Because large charities and global problems are less vulnerable to market volatility than a single individual, many EAs advocate for a risk-neutral or high-equity portfolio.
* The Logic: If the market crashes 20%, a large charity (like the Against Malaria Foundation) will not "go bust" the way an individual retiree might. They can wait for the market to recover.
* The Portfolio: This usually points toward 100% broad-market equities (like a Total World Stock Market Index Fund). You accept higher volatility for higher expected long-term returns, maximizing the final donation amount.
Direct Stock Transfers
Direct stock transfers avoid capital gains taxes on your stocks that increased in value.
Standard Investment Account Batched Donations
Because I live in a US state with no state income tax to deduct, my "baseline" itemized deductions are likely very low (perhaps just mortgage interest, if I have any). This makes the "Standard Deduction hurdle" much harder to clear, meaning my smaller annual donations often yield zero tax benefit.
Here is how to solve that with “Batching".
Part 1: The "Batching" Strategy
The Goal: Stop giving small amounts every year where you get no tax credit. Instead, save up and give a massive amount in one single year to crush the Standard Deduction, then give nothing (on paper) for the next few years.
The Math (2025/2026 Projections):
* Single Standard Deduction: ~$15,000
* Married Standard Deduction: ~$30,000
Scenario: Let's assume you are Single and want to donate $5,000/year.
* The "Standard" Way: You donate $5k in 2025, 2026, 2027, & 2028.
* Total Donated: $20,000
* Total Tax Deduction: $0 (because $5k is less than the $15k standard deduction; you just take the standard deduction every year anyway).
* The "Bunching" Way: You save that money in an investment account for 4 years, then donate all $20,000+appreciation in Year 4.
* Year 1-3: You take the Standard Deduction.
Year 4: You donate $20,000+ through direct stock transfers. Combined with other deductions (e.g., sales tax, mortgage interest), you might reach $25,000+ in itemized deductions. For a single tax filer making $100,000 a year this would mean saving an extra $2000+ in taxes**.
Donation Deduction Limits
The amount you can deduct in a single year is subject to limitations based on your Adjusted Gross Income (AGI).
• For gifts of appreciated long-term capital gain property (like stock) to a public charity (including Donor Advised Funds), the deduction is generally limited to 30% of your AGI (Income).
• Any amount exceeding this limit can usually be carried forward for up to five additional tax years.
Also if you live in the US & want to decrease the cost of your donations by like 10% and/or give like 10% more, one option is to use a 100% equities investment account (like all S&P500 or something) to save all the money you would donate each year until you can make a big enough stock-transfer donation to an effective organization to reduce your tax bill.
100% Equities
In standard personal finance, you lower risk as you age to protect your retirement security. In "Investing to Give," the philosophy is different.
Because large charities and global problems are less vulnerable to market volatility than a single individual, many EAs advocate for a risk-neutral or high-equity portfolio.
* The Logic: If the market crashes 20%, a large charity (like the Against Malaria Foundation) will not "go bust" the way an individual retiree might. They can wait for the market to recover.
* The Portfolio: This usually points toward 100% broad-market equities (like a Total World Stock Market Index Fund). You accept higher volatility for higher expected long-term returns, maximizing the final donation amount.
Direct Stock Transfers
Direct stock transfers avoid capital gains taxes on your stocks that increased in value.
Standard Investment Account Batched Donations
Because I live in a US state with no state income tax to deduct, my "baseline" itemized deductions are likely very low (perhaps just mortgage interest, if I have any). This makes the "Standard Deduction hurdle" much harder to clear, meaning my smaller annual donations often yield zero tax benefit.
Here is how to solve that with “Batching".
Part 1: The "Batching" Strategy
The Goal: Stop giving small amounts every year where you get no tax credit. Instead, save up and give a massive amount in one single year to crush the Standard Deduction, then give nothing (on paper) for the next few years.
The Math (2025/2026 Projections):
* Single Standard Deduction: ~$15,000
* Married Standard Deduction: ~$30,000
Scenario: Let's assume you are Single and want to donate $5,000/year.
* The "Standard" Way: You donate $5k in 2025, 2026, 2027, & 2028.
* Total Donated: $20,000
* Total Tax Deduction: $0 (because $5k is less than the $15k standard deduction; you just take the standard deduction every year anyway).
* The "Bunching" Way: You save that money in an investment account for 4 years, then donate all $20,000+appreciation in Year 4.
* Year 1-3: You take the Standard Deduction.
Year 4: You donate $20,000+ through direct stock transfers. Combined with other deductions (e.g., sales tax, mortgage interest), you might reach $25,000+ in itemized deductions. For a single tax filer making $100,000 a year this would mean saving an extra $2000+ in taxes**.
Donation Deduction Limits
The amount you can deduct in a single year is subject to limitations based on your Adjusted Gross Income (AGI).
• For gifts of appreciated long-term capital gain property (like stock) to a public charity (including Donor Advised Funds), the deduction is generally limited to 30% of your AGI (Income).
• Any amount exceeding this limit can usually be carried forward for up to five additional tax years.
This post isn’t a list of matching opportunities, but does support your unstated intent of multiplying funds directed to effective programs
Shrimp Welfare Project is doing 50% matches
https://open.substack.com/pub/benthams/p/for-a-short-period-of-time-you-can?r=87ph2&utm_medium=ios
After some time & querying Gemini 3 I adjusted my thinking on this a bit, I wonder if others may benefit from this info.
Due to personal circumstances & certain tax implications I think a good strategy for me is to max out a traditional IRA with 100% equities every year & keep any donations I would make in year in a 100% equities standard investment account so I can batch together donations in certain years & get a better tax deduction.
100% Equities
In standard personal finance, you lower risk as you age to protect your retirement security. In "Investing to Give," the philosophy is different.
Because large charities and global problems are less vulnerable to market volatility than a single individual, many EAs advocate for a risk-neutral or high-equity portfolio.
* The Logic: If the market crashes 20%, a large charity (like the Against Malaria Foundation) will not "go bust" the way an individual retiree might. They can wait for the market to recover.
* The Portfolio: This usually points toward 100% broad-market equities (like a Total World Stock Market Index Fund). You accept higher volatility for higher expected long-term returns, maximizing the final donation amount.
Traditional IRA
For "Giving Later," Traditional IRAs/401(k)s are often superior to Roths if you plan to donate the account itself upon death or use it for distributions in old age.
* Qualified Charitable Distributions (QCDs): Once you reach age 70½, you can transfer up to $105,000+ (indexed for inflation) per year directly from a Traditional IRA to a charity. This counts toward your Required Minimum Distribution (RMD) but does not count as taxable income. This is usually more tax-efficient than withdrawing the money (taking the income hit) and then donating it.
* Beneficiary Designation (The "Death Tax" Hack): If you die with unspent assets, leaving a Traditional IRA to heirs is inefficient (they pay income tax on it). If you leave the Traditional IRA to a charity as the beneficiary, the charity receives 100% of the money tax-free. Leave your Roth assets (which are tax-free) to your human heirs.
I also happen to have specific health conditions with higher risk of disability. If I invest money in a traditional IRA it has extra optionality. If I am relatively healthy & don’t need it, then I can donate it in older age. If I suffer a bad health incident that prevents me from working more then I can use some of it for myself.
Standard Investment Account Batched Donations
Because I live in a US state with no state income tax to deduct, my "baseline" itemized deductions are likely very low (perhaps just mortgage interest, if I have any). This makes the "Standard Deduction hurdle" much harder to clear, meaning my smaller annual donations often yield zero tax benefit.
Here is how to solve that with “Batching".
Part 1: The "Batching" Strategy
The Goal: Stop giving small amounts every year where you get no tax credit. Instead, save up and give a massive amount in one single year to crush the Standard Deduction, then give nothing (on paper) for the next few years.
The Math (2025/2026 Projections):
* Single Standard Deduction: ~$15,000
* Married Standard Deduction: ~$30,000
Scenario: Let's assume you are Single and want to donate $5,000/year.
* The "Standard" Way: You donate $5k in 2025, 2026, 2027, & 2028.
* Total Donated: $20,000
* Total Tax Deduction: $0 (because $5k is less than the $15k standard deduction; you just take the standard deduction every year anyway).
* The "Bunching" Way: You save that money in an investment account for 4 years, then donate all $20,000+appreciation in Year 4.
* Year 1-3: You take the Standard Deduction.
Year 4: You donate $20,000+ through direct stock transfers. Combined with other deductions (e.g., sales tax, mortgage interest), you might reach $25,000+ in itemized deductions. For a single tax filer making $100,000 a year this would mean saving an extra $2000+ in taxes**.
Donation Deduction Limits
The amount you can deduct in a single year is subject to limitations based on your Adjusted Gross Income (AGI).
• For gifts of appreciated long-term capital gain property (like stock) to a public charity (including Donor Advised Funds), the deduction is generally limited to 30% of your AGI.
• Any amount exceeding this limit can usually be carried forward for up to five additional tax years.
If anyone else is into software development / Azure resources & is underutilized, I have this on my to-do list:
Set up a simple website to allow people to contact their congress people on various global health & EA issues. Research best ways to create & host a site.
Issues:
-Global health & Pandemic preparedness & Medical science
-Factory farming & Animal welfare
-Housing
-Low-cost energy
-Global Liberalism & China & Ukraine
-Autocratic use of AI
Put link to site on all open source project pages asking people in the US to pick at least 1 topic to contact their reps about as a thank you for free product use.
Include follow-up actions on site like best programs to donate to & personal actions like following a Vegan or Ex-Cow-Vegan diet.
Include relevant links for more info on causes.
I have a couple work contracts to get through for the next like 4 months, but then I wanted to work on this to get some more low-cost website development experience & political advocacy experience. But if anyone else wants to pick this up or prepare pieces of this before next January/February, let me know.
If you ever find high-impact data that could need cleaning or could need to be pulled from like PDFs & scanned images then let me know as I often work develop tools related to this in my day-job.
Didn’t even know there was a provision to allow for charitable deductions coming in any year. Thanks for this!