Discover Essential Year-End Giving Strategies: Strengthen Client Relationships and Embrace Philanthropic Trends for 2025

1) Providing two Do’s and Don’ts pertaining to their giving preferences and family philanthropy.

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2) Highlighting key philanthropic trends to share in the years ahead.

Here are the Do’s:

1. Appreciated Stock vs. Giving a Check: Keep in mind that donating low-cost basis stock that is appreciated in value can be more beneficial than just writing a check. For example: If you purchased stock for $1,500 and it is currently worth $4,000, by donating it, you avoid paying taxes on the $2,500 gain. Furthermore, the charity of your choice gets the full $4,000 value, making it more tax-efficient and creating a win-win scenario.

2. QCD vs Direct Donation: A Qualified Charitable Distribution (QCD) allows clients over 70½ to donate directly from their IRA to a charity, fulfilling their required minimum distribution (RMD) without incurring taxes. Keep in mind that a direct donation of cash or a check does not carry the same tax benefits.

Simply put, cash is NOT always king. Contrary to popular belief! Donating appreciated stocks can be more tax-efficient and a QCD provides specific advantages over cash donations for people in a particular age category.

Recent strong market performance may indicate that non-cash assets within your portfolio have significantly appreciated. By the end of November, the S & P Index was up anestimated 27%. As I pointed out above, donating low-cost / highly appreciated stocks, as well as privately held business interests or even cryptocurrency directly to your charity of choice, can potentially maximize your tax benefits and charitable impact. In addition, you may want to consider a donor-advised fund (DAF) that serves as a charitable giving account providing a structured and tax-efficient way for clients to manage their donations.

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The following are the Don’ts

- Understanding and Avoiding Blatant Self-Dealing and Conflicts of Interests

In order to receive the full charitable donation, donors need to understand that they aregiving up control. This is where we at Cannon suggest seeking professional fiduciary help.Whether donating to a private foundation or a registered charity, both must meet the fiduciary standard of care to protect their assets. A fiduciary must always put the best interests of those whom they serve firstin ALL they do. Heightened scrutiny may apply to certain investment vehicles and strategies that are speculative in nature. Working with a trustworthy financial advisor and an experiencedattorney will go a long way in avoiding any potential fiduciary breaches or concerns about self-dealing.

- The IRS knows - Receiving some benefit or service in return for your charitable contributions. Reputable 501[C][3] charities are required to provide a detailed breakdown of any goods and services that you have received in exchange for your charitable donation. Let’s say, you attended a gala or participated in a charitable golf tournament this year. In exchange for your $1000 donation, you were served a gourmet dinner and / or presented with an opportunity to play golf; if it’s worth $250, your net charitable contribution would be $750 for the 2024 tax year.

There are a few crucial industry philanthropic trends to know in 2025 and beyond.

Please note that for the next generation, the How is more important than What. It means that next generation donors are driven by three motivators: family influence, passion for specific causes and a strong desire to support local communities.

Evidence shows that millennials who engage in charitable activities began at an average age of 18. Interestingly, Gen Z started even earlier, at age 14.

Remember, these “jumpstarts” usually pave the way for lifelong commitments to social change. Besides, when it comes to younger philanthropists, giving is more than just financial contributions. It includes volunteering, helping with fundraising activities or donating items. As stated by Wealth Management Magazine, their approach to giving tends to be informal and direct, reflecting a strong desire to make an immediate impact.

What is more, next-gen donors try to dissociate themselves from traditional labels such as “philanthropists” or “altruists.” In other words, they prefer to be seen as “givers,”“volunteers,” “advocates” and “humanitarians,” emphasizing their active role in contributing to positive change.[2]

Here is a quick note to our colleagues in the not-for-profit space. The great news is the philanthropic sector is rapidly evolving with the rise of artificial intelligence. I would like to bring up a recent survey by the Technology Association of Grantmakers stating that 81% of foundations report using AI in some capacity.[3] The latest technology can be instrumental in identifying potential donors or assisting with grant applications. While adoption is currently in its early days and we have ways to go, its impact is expected to transform organizations in the years ahead. Something to look forward to, for sure!

Here is another key trend to watch: Digital assets, especially cryptocurrency, are emerging as a major funding source. Not-for-profits that embrace crypto donations now will be better-equipped to engage Millennial donors and many others who are crypto-savvy. While the challenges such as volatility, security and simplifying the giving process are undeniable, ignoring this shift is not the right strategy. Partnering with a trusted financial institution to handle crypto donations can position your nonprofit to declare confidently, “Yes, we can!” and thrive in this era of giving.

As we close out the year, always remember that we, Your Cannon Family, wish all the blessings and good fortitude to you in the coming Holiday Season and the New Year ahead. May 2025 be the best, most successful and productive yet!

[1] Fidelity Charitable website fidelitycharitable.com

[2] Wealth Management Magazine September 2024 “how to engage the next generation.”

[3] Technology Association of Grantmakers tagtech.org