Many of us have a desire, maybe even a calling, to make an impact, give back and do good in the world. While this is a core value for many people of faith, there are also plenty of people who want to give back for other reasons.

Sometimes, people don’t give because they are unsure which charity to support, how much to give, or whether they can afford to donate. We will explore all of those factors and discuss potential ways to make your impact even greater.

What Charity Should I Choose?

Often, people have a desire to give, but they hesitate because they aren’t sure where their money will do the most good. The first step is to determine what you are passionate about. Perhaps you want to help people in a particular country, spread the gospel with your finances, or support a charity that rescues a specific animal you are fond of.

From there, you can research charities that align with your passions. Once you identify a few, learn more about their mission and their efficiency. Are they good stewards of the money they receive? How much of each donation reaches the front lines?

There are large, well-known organizations that administer funds to various charities. While many people may choose to give through such an organization, others might believe it is better to donate directly to a charity to avoid the “middleman” and their operating expenses. Either approach could be the right choice for you.

Consider, also, the opportunity to make non-monetary gifts. While most charities prefer cash, you can also do a lot of good by donating your time, a used vehicle, or even investments.

Remember that 2 Corinthians 9:7 says, “Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.”

Is My Donation Tax-Deductible?

We have all heard the phrase, “Make your tax-deductible contribution today,” or something similar. But is your donation really deductible? If the organization qualifies as a charity for tax purposes, the donation is eligible for a tax deduction, but that doesn’t guarantee you will get one. Let me explain.

To deduct a charitable donation, you must be able to itemize your deductions. This is only advantageous if your total itemized deductions are higher than the standard deduction (for 2025, this is $30,000 for those married filing jointly and $15,000 for single filers). You will want to take whichever deduction is higher.

Because of the high standard deduction, only about 10% of Americans currently itemize. This presents an opportunity to use a strategy called “bunching.” This is where you make several years’ worth of charitable contributions in a single year to increase your itemized deductions. This can be done through an outright donation or by using a Donor-Advised Fund. I’d be happy to go into detail on this strategy with you if you are interested; just reach out.

Financial Generosity Planning

For most philanthropic individuals, the typical method for donating is writing a check or sending money directly to a charity. But what if there is a more tax-efficient way to give? Fortunately, for many people, there is.

If you have stocks or other investments that have grown in value, you could donate the investment directly to a charity. You would receive a deduction for the investment’s current worth, not the amount you originally paid for it. In doing so, you avoid paying capital gains tax. This means a bigger impact for the charity and less tax for you.

For those over the age of 70, another strategy is to give a portion of your retirement account to your favorite charity. This can be done by sending your Required Minimum Distribution (RMD), or even more, directly to the charity instead of having it deposited into your bank account. By doing so, you avoid paying income tax on that distribution.

There are many other opportunities for generosity. If you would like me to help you with these or other financial planning strategies, feel free to reach out.

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Disclaimer: This article is for informational purposes only and is not tax, legal or financial advice. Everyone’s situation is different, so consult a financial advisor.

If you would like to connect with me, please call 615-619-6919 or email me at smoran@redbarnfinancial.com.

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Photo, top, courtesy of Julia M. Cameron / Pexels