Tax-Smart Philanthropy in 2024: Optimizing Your Giving While Minimizing Taxes | Affinity Capital

April 4, 2024

As your investment advisors, we understand your desire to support worthy causes while making the most of your financial resources. Fortunately, tax-smart philanthropy allows you to achieve both goals. Let’s explore strategies for maximizing your charitable impact in 2024, considering the latest tax regulations and outlining common giving scenarios.

Understanding Charitable Deduction Limits

The Internal Revenue Service (IRS) sets limitations on the amount of charitable contributions you can deduct from your taxable income. These limits are based on your filing status and the type of donation:

  • Cash Donations: The maximum deduction for cash contributions is 60% of your Adjusted Gross Income (AGI) in 2024.
  • Appreciated Non-Cash Assets: Donating appreciated non-cash assets held for more than a year, such as stocks or real estate, allows you to avoid capital gains tax on the appreciation while potentially claiming a charitable deduction for the asset's full fair market value. The deduction limit for non-cash assets is 30% of AGI.


Strategies for Tax-Smart Giving:

Here are several effective strategies to consider:

  • Donating Appreciated Assets: As mentioned earlier, donating appreciated assets held for more than a year allows you to bypass capital gains taxes while potentially receiving a full deduction. This strategy is particularly beneficial for assets with significant appreciation.
  • Bunching Donations: If your charitable contributions typically fall below the deduction limit, consider "bunching" them. This involves grouping multiple years' worth of donations into a single tax year. This strategy is best suited for those who itemize deductions and have fluctuating income levels.
  • Qualified Charitable Distributions (QCDs): Individuals aged 70 ½ or older with traditional IRAs can make tax-free Qualified Charitable Distributions (QCDs) of up to $105,000 in 2024 directly to qualified public charities. This strategy can be particularly helpful in reducing required minimum distributions (RMDs) and lowering taxable income.
  • Charitable Remainder Trusts (CRTs): A Charitable Remainder Trust (CRT) allows you to receive income from a trust for a set period or for your lifetime, with the remaining assets going to a designated charity. This strategy can generate income while providing a future tax benefit for your beneficiaries.


Common Strategies with Tax Benefits:

  • The Retiree with Appreciated Stock: John, a retired investor with a significant amount of appreciated stock, wants to donate to his alma mater. Donating the appreciated stock directly allows him to avoid capital gains tax and potentially claim a full charitable deduction for the stock's value.
  • The High-Earner with Fluctuating Income: A high-earning professional with fluctuating income may donate to various charities throughout the year. In years with lower income, the contributions may not reach the deduction limit. By "bunching" donations every other year, they may maximize her charitable deductions.
  • The IRA Owner Facing RMDs: A retiree with a traditional IRA facing RMDs, wants to make a significant charitable contribution. He can utilize a QCD to donate directly from his IRA to a qualified charity, reducing his taxable income and satisfying a portion of his RMD.
  • The Couple Leaving a Legacy: Clients nearing retirement want to ensure a portion of their estate goes to charity. They can establish a CRT, receiving income from the trust during their retirement years. Upon their passing, the remaining assets will be distributed to their chosen charity, reducing their taxable estate.


Maximizing Your Philanthropic Impact

Beyond tax benefits, consider these additional tips for maximizing your impact:

  • Research Charities: Choose charities whose missions align with your values and ensure they operate efficiently.
  • Consider Non-Monetary Donations: Donating skills, time, or resources can be just as valuable as financial contributions.
  • Plan for the Future: Incorporate charitable giving into your long-term financial planning to ensure sustained support for your chosen causes.


Seeking Professional Guidance

As your registered investment advisor, we are dedicated to helping you achieve your financial goals, and that includes supporting the causes you cherish. While the strategies outlined here provide a framework, your philanthropic journey is unique. To ensure you maximize your charitable impact while optimizing your tax benefits, we highly recommend scheduling a personalized consultation. Together, we can tailor a tax-smart giving plan that aligns with your financial situation, philanthropic values, and long-term goals. Let's create a legacy of generosity while ensuring your financial security.

Please feel free to reach out for further discussion or clarification on these matters. Thank you for the opportunity to serve you and your family and to collaborate with you for—Wealth Management for Life!

Signals from the Fed: Inflation, Growth, and What Comes Next

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.

Fed Moves and Market Trends | Affinity Capital

August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.

Weekly Market Update: Stability Amid Data and Tariff Jitters | Affinity Capital

July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.