Read in English Leer en Español

6 Ways to Maximize Your Charitable Giving Deductions Before 2022 Ends

With the height of the pandemic behind us, 2022 has presented Americans and philanthropists alike with its own set of unique challenges.

Inflation is at its highest point in four decades. Interest rates are rising. And we continue to endure volatile U.S. stock performance in a bear market.

Despite rising costs and economic uncertainty, however, the most recent data shows that philanthropists continue to make an impact at record-setting levels.

In 2021, Americans gave $484.85 billion to charity, a 4% increase over 2020, according to the Giving USA 2022 Annual Report.

San Diego Foundation (SDF) donors met the challenge, too. During our fiscal year ending June 30, 2022, donors, fundholders and partners granted a record $150.8 million to more than 2,300 nonprofits, a 44% increase compared to fiscal year 2021.

Thank you for your generosity as we advance our vision of just, equitable and resilient communities.

With the Giving Season upon us, here are six ways you can maximize your giving at SDF before 2022 ends.

1. Give Cash

Giving cash, usually in the form of a check or wire transfer, to your donor-advised fund (DAF) enables you to claim a tax deduction of up to 60 percent of your adjusted gross income (AGI) in any one year when you itemize tax deductions. You can carry forward contributions exceeding that limit for up to five subsequent tax years.

2. Donate Appreciated Securities

While your portfolio may have hit a rough patch this year, the truth is not all stocks are down.

Direct gifts of long-term, appreciated securities, including publicly traded stock, publicly traded bonds, and mutual fund shares, to your DAF offer important advantages.

The full fair market value of your gift is deductible as a charitable contribution up to 30 percent of your AGI each year when you itemize deductions. You can carry forward contributions exceeding that limit for up to five subsequent tax years.

Also, you eliminate the capital gains tax you would incur if you sold the assets and donated the after-tax proceeds, which could increase your amount available for charity by up to 20 percent.

In the example below, “Sally” has $100,000 in long-term appreciated stock, with a $10,000 cost basis.

Assuming a 35 percent income tax rate and a 15 percent long-term capital gains rate, the DAF allows Sally to avoid tax on her $90,000 gain and give more to charity ($13,500).

Conversely, if you decide to sell depreciated securities at a loss, you may choose to donate cash from the sale of those securities and claim a tax deduction of up to 60 percent of your AGI from your cash donation.

3. “Bunch” Charitable Donations

The 2017 Tax Cuts & Jobs Act nearly doubled the standard deduction for most taxpayers, which has resulted in more taxpayers opting for the standard deduction rather than itemizing, costing taxpayers the ability to write off charitable donations.

If you and/or your family fall into this category, you can still get a tax benefit by “bunching” – or doubling up – your charitable donations in 2022.

Let’s assume a couple typically donates $4,000 to charity each year and this year, they have the following expenses:

The total of these items is $23,500 — less than the $25,900 standard deduction for couples in tax year 2022. So, they claim the standard deduction and will not itemize. In other words, they will deduct $25,900 regardless of the $4,000 they donated to charity.

Instead of donating $4,000 in a single year, this couple could consider “bunching” its donations by making two $4,000 donations, for a total of $8,000 in 2022. And, make no donations next year in 2023.

Using the same example above, an additional $4,000 (totaling $27,500) would put them over the standard deduction and they would itemize. Next year, they might not itemize.

The same “bunching” strategy would be repeated every other year. Only the timing of the donations changes. The amount of support stays the same.

4. Give a QCD from Retirement Assets

Introduced in 2006, Qualified Charitable Distributions (QCDs) help offset the Required Minimum Distribution (RMD) income tax burden from taxpayers and encourage charitable giving.

The law allows a taxpayer over age 72 ½  to donate up to $100,000 total to one or more charities directly from a taxable individual retirement account (IRA) instead of taking their RMD. As a result, you may avoid being pushed into higher income tax brackets and prevent phaseouts of other tax deductions.

QCDs provide many potential benefits and may be a suitable giving strategy if you:

Although QCDs cannot be gifted to DAFs, SDF offers donors an opportunity to make a QCD that supports their charitable interests through one of our strategic program funds, including:

Contact us to help guide you through the QCD giving process.

5. Add a Planned Gift to Your Estate Plan

Many donors revisit their estate plans with their professional advisors during Q4, which often presents an opportunity to consider establishing a planned gift during the Giving Season.

With a planned gift, you can create a charitable legacy that ensures your values and passions live on beyond your lifetime and provide lasting benefits for you, your family and your community.

Types of planned gifts include:

6. Donate Complex Assets

We understand giving comes in all shapes and sizes.

In addition to publicly traded securities, SDF accepts gifts of complex assets, including real estate, business interests, privately-held stock and a broad range of other asset that many nonprofits and commercial brokerage firms do not have the ability or experience to accommodate.

If you have questions about donating a non-cash asset not listed, please contact us.

Contribution Guidelines for 2022

As you continue to look for ways to help San Diegans in need and support causes you care about, be sure to contact our Donor Services Team at (619) 814-1332 or donorservices@sdfoundation.org to speak to us about your year-end giving needs.

Refer to the critical dates below to ensure that contributions and grant recommendations are received and processed by December 31, the IRS deadline for yearly tax deduction eligibility. For some assets, these dates fall in November.

Contribution Type Action Needed Timing
Mutual Fund Call Donor Services at (619) 814-1332 or email DonorServices@sdfoundation.org. Mutual fund donations must arrive to SDF by November 23.
Stock Submit a Stock Contribution Form or call Donor Services at (619) 814-1332 or email DonorServices@sdfoundation.org. Stock donations must arrive to SDF brokerage accounts by December 29 at 1:00pm.
Credit Card Log in to your MySDF account.
Click on “Give to My Fund” and follow instructions. Or, call Donor Services at (619) 814-1332 to contribute to your fund with your credit card. Credit card processing fees will apply.
Credit card donations must be processed by SDF by December 30 at 12:00pm.
Check Mail to:

Attn: Donations
San Diego Foundation
2508 Historic Decatur Road, Suite 200
San Diego, CA 92106

Please write your fund name and number in the memo field of your check. Make the check payable to San Diego Foundation. (For Endowment funds, please indicate whether the gift should be applied to the principal or distributable portion of the fund.)

Mail must be postmarked by the U.S. Post Office by December 31.
Electronic Bank Transfer Log in to your MySDF account.
Click on “Give to My Fund” and follow instructions. Or, call Donor Services at (619) 814-1332 to set up an electronic bank transfer to your fund.
Funds must be received by December 30.
Wire Transfer Call Donor Services at (619) 814-1332 or email DonorServices@sdfoundation.org. Funds must be received by December 30.
IRA
Includes Qualified Charitable Distributions (QCDs) and Required Minimum Distributions (RMDs)
Deadlines and actions needed are dependent on IRA contribution type and custodian.
Grantmaking
Grants Log in to your MySDF account.
Click on “Recommend Grant” and follow instructions.Or, call Donor Services at (619) 814-1332 or email DonorServices@sdfoundation.org.
Grants guaranteed to be postmarked before December 31 must be received by December 22 at 12:00pm.

Related Content