Whether you have a grand passion for philanthropy or simply want to support a few carefully chosen charities, strategic giving can yield both social impact and tax benefits for higher-net-worth individuals. Thoughtful planning enables donors to maximize their charitable contributions while reducing tax liabilities and preserving wealth. Here are five methods to consider:

Donate appreciated securities

Donating stocks, bonds, mutual funds or ETFs that have significantly increased in value is one of the best ways to support a cause and reduce taxes. If you contribute such assets directly to a qualified charity (rather than selling them first and donating the cash proceeds), you can sidestep capital gains tax liability. This means the charity can enjoy the full value of the donation and you can deduct the security’s full value on your income tax return without paying capital gains tax, subject to IRS limitations.

Make a qualified charitable distribution (QCD)

For the 2025 tax year, if you’re age 70½ or older, you can donate a QCD of up to $108,000 from your IRA to a qualified charity. Such distributions aren’t taxable, and they satisfy required minimum distribution (RMD) rules. This makes QCDs particularly useful for individuals who’ll be at least age 73 this year and must take RMDs but don’t currently need all the income from their retirement plans. Such QCDs can help you reduce taxable income and the size of your taxable estate, among other tax benefits.

Establish a trust

Talk to your estate planning advisors about setting up a charitable remainder trust (CRT). With a CRT, you transfer assets to the trust but retain an income stream to benefit yourself or designated beneficiaries for a set term. At the end of the trust’s term, the remaining assets pass to your chosen charities. You can qualify for an immediate charitable deduction for the present value of your CRT’s remainder interest, defer capital gains taxes on contributed appreciated assets and benefit from the current income stream.

Another potential option is using a charitable lead trust (CLT). This tool can provide income from trust assets to a charity for a specified time period. After that period expires, the remaining assets are transferred to designated beneficiaries, such as your family members. Because you remove assets from your estate to fund a CLT, this strategy can significantly reduce gift and estate taxes, as well as income tax.

Set up a donor-advised fund (DAF)

These structured giving vehicles offer a relatively low-cost and flexible way to support charity. In general, you can contribute assets to a DAF, receive an immediate tax deduction and distribute charitable grants over time. DAFs are particularly useful for those who seek to start a family tradition of giving or signal their philanthropic intentions without expending the money and time to set up a private foundation.

Bunch charitable contributions

The Tax Cuts and Jobs Act increased the standard deduction, reducing the number of taxpayers who itemize federal income tax deductions — and who can, therefore, deduct charitable contributions. However, if this is your situation, you might think about “bunching” charitable contributions — or deducting multiple years’ worth of donations that, when totaled, exceed the standard deduction in a single tax year. Using this strategy, you could itemize deductions one year and take the standard deduction in other years. Just note that Congress currently is considering various tax bills that might change the applicability of this strategy.

Other methods of supporting charities while minimizing tax liability may be available, depending on your goals and circumstances. For example, it might make sense for you to include a charitable bequest in your will or designate a charity as the beneficiary of a life insurance policy or retirement fund account. Or you might be in a position to set up a private foundation that would allow you to realize far-reaching charitable objectives. Be sure to discuss the various possibilities with your financial advisors.

For more information, contact Justin Sylvan at 312.670.7444 or [email protected]. Visit ORBA.com to learn more about our Wealth Management Services. Sign up here to receive our blogs, newsletters and Client Alerts.