Where should you start if you want to invest but don’t know how? For many millennials and Gen Z investors, the biggest What if your charitable giving could extend its impact, supporting the causes you care about while also helping your family give more generously, for longer? For high-net-worth and ultra-high-net-worth families, philanthropy isn’t just about generosity. It’s also about tax efficiency, legacy planning, and engaging the next generation in shared
values. With the right approach, you can give strategically, maximize your tax benefits, and ensure your resources create lasting impact.

Why Charitable Giving Matters Now

Despite economic uncertainty, Americans continue to give. In 2021 alone, individuals donated nearly $327 billion to nonprofits. For families with significant wealth, charitable giving provides a dual opportunity: To advance causes that matter and to build a more tax-efficient wealth strategy for the family itself.

But how you give often matters as much as what you give. Donating the right type of asset to the right type of organization can significantly increase both the size of your gift and the benefit to your family.

Understanding 501(c)(3) Organizations

Most charitable giving happens through 501(c)(3) organizations, nonprofits recognized by the IRS as tax-exempt. Donations to these organizations are tax-deductible, and they range from local schools and religious institutions to hospitals, research groups, and global charities. Working with a qualified 501(c)(3) ensures your contribution is eligible
for tax benefits while making a measurable difference.

Two Main Ways to Give: Cash vs. Appreciated Assets

• Cash Donations: The most common method, cash giving, allows deductions of up to 60% of Adjusted Gross Income (AGI). This approach is simple and impactful, though it may not always be the most tax-efficient.
• Appreciated Assets: Gifting stocks, mutual funds, or real estate often provides greater benefits. You can deduct the fair market value of the asset and avoid capital gains tax on the appreciation. This allows you to give more to charity while preserving liquidity in your overall portfolio.

Charitable Giving Vehicles to Consider

While there are many structures available, three of the most practical for affluent
families include:

• Donor-Advised Funds (DAFs): A flexible and increasingly popular option. You contribute assets to a DAF, receive an immediate tax deduction, and recommend grants to charities over time. Think of it as a “charitable investment account” without the administrative burden of running a private foundation.
• Private Foundations: Best suited for families seeking control and legacy involvement. Foundations allow family members to serve on the board, direct grants, and create a multigenerational philanthropic structure. They come with more compliance requirements but can be an enduring way to embed philanthropy into family governance.
• Charitable Trusts: Trusts such as Charitable Remainder Trusts (CRTs) or Charitable Lead Trusts (CLTs) can generate income for you or your heirs, reduce estate taxes, and leave the remainder to charity. These are often used in complex estate plans to balance lifestyle, legacy, and giving.

The Tax Benefits Explained

• Immediate Deductions: Reduce taxable income in the year of your gift.
• Avoid Capital Gains: Donate appreciated assets directly to eliminate capital gains taxes.
• Estate Planning Advantages: Remove assets from your estate, lowering potential estate taxes.
• Family Engagement: Use charitable structures as a way to involve children and grandchildren in philanthropy and values-based decision-making.

Making Philanthropy Part of Your Legacy

For wealthy families, charitable giving is about more than tax savings. Rather, it’s about
values, purpose, and creating a legacy that extends beyond wealth. By integrating
philanthropy into your financial plan, you can:

• Support causes that reflect your family’s priorities.
• Teach younger generations about stewardship and responsibility.
• Ensure your wealth makes a difference for decades to come.

At VestGen, we help clients structure their giving so it is both impactful and tax-efficient.
Whether you’re exploring donor-advised funds, foundations, or trusts, we can help align
your philanthropy with your wealth, family, lifestyle, and legacy. Connect with a VestGen
advisor to discuss how tax-efficient charitable giving can become part of your long-term
plan.