Charitable Giving That Fits Your Life and Your Financial Plan

Charitable Giving That Fits Your Life and Your Financial Plan

You can have money saved and still struggle to feel free with it. Especially when you own a business or earn commissions, there’s always something ahead that might require more money.

In financial planning conversations, we sometimes ask what would help someone feel more at peace financially. An answer that has stayed with me is the desire to give more freely. There’s something meaningful about reaching a point where you can share what you have without second-guessing whether you’ll be okay.

At PeaceLink, we encourage clients who feel they’ve been blessed financially to consider how generosity fits into their lives. And research suggests giving can benefit the person making the gift, too.

Why giving can feel so rewarding

In a study published in Science, people randomly assigned to spend money on others reported greater happiness than those assigned to spend it on themselves. Later research found that giving was particularly rewarding when people could see its impact, felt connected to the person or cause, and felt they had freely chosen to help.

That helps explain why supporting a church or nonprofit you care about can feel different from watching your account balance grow. You’re seeing your money do something that matters to you.

Giving won’t automatically remove financial anxiety, but I believe it can help us build a different relationship with money—one where we can enjoy it, save it, and share it.

If giving is already important to you, here are four ways to approach it thoughtfully.

1. Give cash and understand your deduction

Cash is straightforward. You choose an organization, make your gift, and keep the documentation.

For 2026, people who don’t itemize may deduct up to $1,000 in qualifying cash gifts, or $2,000 for married couples filing jointly. Itemizers generally deduct qualifying charitable gifts only above 0.5% of adjusted gross income, or AGI. At $200,000 of AGI, that threshold is $1,000. Qualifying cash gifts to public charities generally have a 60% of AGI deduction ceiling.

The deduction can reduce the cost of giving, but it won’t reimburse the gift. Start with what you want to give, then look at the tax opportunity.

2. Donate appreciated stock and replace it

Suppose you plan to give $10,000 to a church or nonprofit. You have the cash, but you also own stock in a taxable brokerage account worth $10,000 that originally cost $4,000.

Rather than writing a check, you could transfer those shares directly to the organization, assuming it accepts them. You generally avoid recognizing the $6,000 gain. We typically look for shares held longer than one year.

Then use the cash you planned to give to buy replacement investments. Assuming the price hasn’t changed, you’re still invested with $10,000, but your new cost basis is $10,000 instead of $4,000. The replacement shares begin a new holding period.

For perspective, selling that original $6,000 gain at an assumed 15% federal capital gains rate would create $900 in tax.

Avoiding the donated gain doesn’t require itemizing. A separate charitable deduction generally does, and long-term appreciated stock gifts to public charities generally have a 30% of AGI deduction ceiling.

3. Bunch giving during a strong income year

For Realtors and business owners, an unusually profitable year can be an opportunity to fund future generosity.

If you normally give $10,000 annually, you might contribute $30,000 in one year instead. This is called “bunching.” Combining gifts may help you exceed the standard deduction and benefit from itemizing.

We’d compare the tax results across those years and make sure the larger gift fits your cash flow. A strong year should still leave room for taxes, reserves, and your other goals.

4. Use a donor-advised fund to give over time

Bunching raises a practical question: what if you want the organizations you support to receive money every year?

A donor-advised fund can help. You could contribute that $30,000 now, potentially claim an itemized deduction this year, and recommend $10,000 in grants annually for three years. You can also contribute appreciated stock.

Your contribution permanently belongs to charity. The sponsor controls the assets and approves grants; fees apply, and later grants don’t create another deduction.

For someone with variable income, this can make consistent generosity easier. You fund it when you have the capacity, then support your church or nonprofit over time.

Giving With Confidence

At the end of the day, generosity is a personal decision, not just a tax strategy. The goal isn't to give simply because there's a deduction available, but to make room in your financial life to support the people and causes you care about.

One of the things I love about financial planning is helping people recognize when they have the freedom to do more with what they've built. Sometimes that means spending more on experiences with family, sometimes it means working less, and sometimes it means having the confidence to give more freely.

A financial plan can help you understand what you can give with confidence. From there, thoughtful tax planning can help you make the most of that decision. 

Cody Hawkins, CFP®

CERTIFIED FINANCIAL PLANNER™ professional

PeaceLink Financial Planning

This article is for educational purposes only and does not constitute individualized investment, tax or legal advice. Financial decisions should reflect your circumstances and goals. Investing involves risk, including the potential loss of principal. Financial projections are estimates, not guarantees of future results.