Charitable Strategies for Women: Reducing Taxes While Supporting Causes You Love

As women, many of us are natural nurturers—whether we’re supporting our families, friends or communities, so giving back is something that often comes instinctively. For those of us who are in a position to give financially, philanthropy provides a wonderful opportunity to make an impact on causes close to our hearts. But did you know that strategic charitable giving can also potentially offer tax benefits?

In this post, I’ll walk you through several charitable strategies that can help you support the causes you care about while also potentially reducing your tax burden. These strategies are especially helpful for women in their 50s and beyond, whether you're widowed, divorced or heading up your household’s financial decisions.

1. Qualified Charitable Distributions (QCDs): A Win for Your IRA and Your Charity

If you are 70? years or older, you may want to consider making a Qualified Charitable Distribution (QCD).

A QCD allows you to donate directly from your traditional IRA to a qualified charity, up to $100,000 per year, without counting the distribution as taxable income.

QCDs can also satisfy your Required Minimum Distributions (RMDs) once you reach age 73, which is a fantastic way to lower your taxable income while still meeting IRS requirements and supporting a charitable cause. This is a particularly powerful strategy for reducing taxes on large retirement accounts.

2. Donor-Advised Funds: Make an Immediate Impact and Plan for Future Giving

A donor-advised fund (DAF) allows you to make a charitable contribution, receive an immediate tax deduction and then decide which charities to support over time.

If you’ve had a year with higher-than-usual income—for instance, after selling a home or a business—donating to a DAF can help offset that income while letting you take time to thoughtfully decide where your funds should go.

Plus, your donations can grow tax-free within the DAF, meaning you’ll have even more to give to the causes that matter most to you in the future.

3. Appreciated Securities: Give More Without Paying Capital Gains Taxes

If you have owned stocks, bonds or mutual funds for over a year that have appreciated in value, donating them directly to charity can be a great way to avoid capital gains taxes. When you donate appreciated securities, you get to deduct the fair market value of the asset, while avoiding the capital gains tax you would owe if you sold the asset first.

This is an excellent strategy for women who have built up an investment portfolio and want to support their favorite organizations in a tax-efficient way.

4. Charitable Remainder Trusts (CRTs): Creating Income While Giving Back

If you want to generate income for yourself while also benefiting a charity, a Charitable Remainder Trust (CRT) could be an attractive option.

With a CRT, you place assets—such as stocks, real estate or cash—into the trust and receive an income stream for life or a set period of time. After that period, whatever remains in the trust goes to the charity of your choice.

This strategy is especially beneficial if you’re looking for ways to reduce estate taxes or provide income for retirement while still supporting a good cause.

5. Legacy Giving: Including Charitable Gifts in Your Estate Plan

For women who are planning their estate, including a charitable gift in your will or trust is a way to leave a lasting impact. Whether you choose to donate a specific amount or a percentage of your estate, these gifts can significantly reduce the estate tax burden for your heirs while supporting the causes you’ve spent a lifetime championing.

Working with an estate attorney and a financial advisor can help you design a legacy plan that reflects your values and financial goals, ensuring that your charitable wishes are honored.

Making Charitable Giving a Personal and Financially Savvy Decision

As you consider the best ways to give back, it’s important to integrate charitable planning into your overall financial strategy. Doing so allows you to make a meaningful difference while maximizing the tax benefits available to you.

Women have unique financial challenges and opportunities, especially as we age, transition into retirement or take on new roles as caregivers and heads of our families. By working with a financial advisor who understands your personal circumstances, you can craft a giving strategy that reflects both your heart and your financial needs.

I work closely with my clients to ensure that their charitable goals are aligned with their broader financial plans. Whether you’re looking to support your community, your favorite nonprofit or an educational institution, I’m here to help you navigate the financial landscape of giving in a way that benefits you and the causes you care about.

If you’re interested in discussing your charitable giving options or have questions about how to incorporate philanthropy into your financial strategy, please reach out. Together, we can create a plan that allows you to support the causes you love while staying financially secure.

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Please Note: Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact us. Please be aware that there may be substantial fees, charges and costs associated with establishing a charitable remainder trust. You should discuss any tax or legal matters with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Smith and not necessarily those of Raymond James.

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