Resources for Advisors: Navigating Year-End Charitable Giving

In the final months of the year, charitable giving surges as donors respond to fundraising appeals and prepare for year-end tax deadlines. At National Philanthropic Trust (NPT), 31% of all contributions in 2023 were made during December—a testament to the power of the Giving Season. For advisors, this time of year presents the opportunity to guide clients toward meaningful, tax-efficient decisions that maximize their charitable impact.

This year, the S&P 500 is on track to gain more than 20%. With many clients realizing gains and few losses in their portfolios, opportunities for tax-loss harvesting—selling securities at a loss to offset taxable gains—may be limited. However, this creates a compelling case for donating appreciated stock directly to charity, an advantageous strategy for offsetting taxable income generated when rebalancing a portfolio.

For example, a client holds a highly appreciated stock that creates an overweight allocation in their portfolio. Selling the stock outright would trigger a capital gains tax liability. Instead, the client donates the shares to charity—a tax-efficient approach available for securities held for more than one year. This strategy allows them to:

• Potentially avoid capital gains tax on the appreciation.
• Receive a charitable deduction based on the stock’s fair market value.
• Rebalance their portfolio to align with their investment goals.

Donor-advised funds (DAFs) are particularly effective tools for clients in this environment. Clients can contribute appreciated assets, invest for potential growth and recommend grants to their favorite charities when the time is right to support immediate and long-term philanthropic goals.

NPT Resources to Support Advisors

As an advisor, you play a critical role in helping clients align their financial strategies with their charitable ambitions. To support your efforts during this season of generosity, NPT offers a range of resources to enhance these conversations:

• Strategies for Year-End Giving: Roundtable Discussion
  Tune in to this 18-minute conversation as I sit down with NPT Regional Directors Jeff Gerold and Fernando Gonzalez to explore the opportunities the Giving Season provides. We share insights on the benefits of DAFs, highlight which clients they’re ideal for and explore what makes this year’s giving landscape unique. You’ll also find actionable tips on opening DAF accounts, making contributions and recommending grants to meet client goals.
• Giving Season Activation Toolkit
  Engage your clients with ease using this comprehensive toolkit. It includes sample outreach emails, social media posts and resources on DAF strategies to help you start impactful conversations.
• Contribution and Grantmaking Deadlines
  Planning is key when working against year-end deadlines, especially when complex assets like restricted stock or hedge fund interests are part of the charitable giving plan. To ensure contributions count for 2024, assets must be received by NPT by December 31. Our deadlines guide provides all the key dates to keep your clients’ plans on track.

As you work with clients this season, remember that NPT’s team of Regional Directors is here to help. Located across the country, we are available to meet with you, your clients and key stakeholders to discuss goals and explore ways to deliver meaningful support to the causes your clients care about most. Connect with an NPT Regional Director.