Charitable giving is a meaningful way to reflect personal values and create a legacy beyond family and finances. For many individuals, integrating charitable giving into an estate plan helps support causes that matter most—whether during life or after passing.
While charitable gifts are often motivated by generosity, with thoughtful planning, they may also complement broader estate strategies and help align personal, financial, and family goals.
Direct Giving
Making gifts directly to charitable organizations is a straightforward way to contribute. Individuals may choose to give cash, appreciated securities, tangible personal property (such as collectibles or artwork), or real estate.
For individuals over age 70½, qualified charitable distributions (QCDs) from IRAs are another option. A QCD allows a direct transfer to an eligible charitable organization, which may satisfy all or part of the individual's required minimum distribution for the year. For 2025, QCDs are limited to $108,000 per donor.
Giving appreciated assets may offer additional advantages. If the organization later sells the asset, it may not be subject to tax on the gain. At death, charitable gifts can be made through a will or trust—either as a specific amount or as a percentage of the estate. Retirement accounts, in particular, may be an efficient way to fulfill charitable intentions, as distributions to eligible charities are typically not subject to income tax.
Donor-Advised Funds (DAFs)
A donor-advised fund is a giving account created with a sponsoring organization. Donors contribute assets, then recommend grants over time to qualified charities. DAFs provide flexibility—allowing individuals to make a gift today while deciding on the timing and recipients of future charitable distributions later.
Once established, the sponsoring organization manages the fund and is responsible for administrative duties and distributions. While donors may recommend grants and investments, ultimate decisions rest with the sponsoring organization. DAFs cannot be used to fulfill personal pledges to specific charities.
Private Foundations
A private foundation is a charitable entity typically established and overseen by an individual or family. Unlike DAFs, foundations require more active involvement and ongoing responsibilities. Founders manage governance, grant-making, and regulatory compliance, often with assistance from professionals.
Foundations may be appropriate for those who desire a more hands-on, long-term approach to charitable involvement. However, they also involve initial setup costs and ongoing administrative obligations. Foundations are subject to an annual minimum distribution requirement and may be subject to an excise tax on certain types of investment income.
Charitable Remainder Trusts (CRTs)
A charitable remainder trust allows a donor or loved one to receive income from the trust for life or a set term of years. When the trust ends, the remainder passes to a qualified charitable organization. The initial gift may be eligible for an income or gift tax deduction based on the estimated value of the future charitable gift.
Because CRTs are typically not subject to income tax, they can be used to sell certain assets without immediately recognizing gain inside the trust. However, beneficiaries may be taxed on distributions from the trust, depending on how the assets were invested.
CRTs are often considered when individuals wish to support a charitable cause while also providing income for themselves or a loved one.
Charitable Lead Trusts (CLTs)
A charitable lead trust operates in reverse of a CRT. The charity receives income from the trust for a term of years or the life of one or more individuals, after which the remaining trust assets pass to other beneficiaries, often family members.
Depending on how a CLT is structured, it may reduce the taxable value of gifts to heirs. If the trust assets grow during the term, any appreciation may pass to the remainder beneficiaries outside the donor’s estate.
CLTs are generally used when individuals seek to make a current charitable impact while planning for the future transfer of assets to loved ones.
Aligning Charitable Intentions With Estate Goals
Charitable giving is a deeply personal decision. When aligned with a well-crafted estate plan, it offers opportunities to support causes, reflect values, and pass on more than just financial wealth. Whether through direct gifts, donor-advised funds, charitable trusts, or foundations, a wide range of tools exists to help individuals shape the legacy they wish to leave behind.
Before deciding on any charitable strategy, it’s important to work with your advisory team—including your estate planning attorney, tax professional, and financial advisor—to ensure your giving aligns with your broader estate goals and personal intentions.