Skip to main content

Financial Planning Helps Charitable Intent (May 2024)

By Kenneth D. Chapel, CFP®, RICP®, CEPA®, WesBanco Bank


Charitable giving holds the power to make a positive impact on society, but it also has the potential to be a strategic component of one's financial planning. Incorporating philanthropic financial strategies into planning allows individuals to align their values with their economic goals, fostering a sense of purpose and community engagement.

One key financial planning aspect of charitable giving is the potential tax benefits. Many charitable contributions are tax-deductible, meaning donors may reduce their taxable income by the amount donated. This can lead to lower income tax liability, which offers a financial incentive for being philanthropic. Although charitable giving is performed for its emotional intrinsic value, understanding the tax implications, and leveraging available deduction benefits can be an integral part to optimizing an overall financial plan.

Strategic giving involves thoughtful consideration to the type of asset to donate. Appreciated securities, for example, can be a tax-efficient way to contribute, as donors may avoid capital gains taxes while still claiming a deduction for the full market value of the asset. Conversely, for those over 70½, making up to a $100,000 qualified charitable distribution directly from their IRA to a 501(c)3 organization is not reported as a taxable distribution. Realizing the potential tax advantages of different types of assets allows donors to maximize the impact of their contributions while minimizing the impact on their own finances and budgets.

Estate planning

Incorporating charitable giving into an estate plan can also be a prudent financial move. Charitable bequests or establishing charitable trusts can help individuals leave a lasting legacy while potentially reducing estate taxes. There are many techniques that can be overlaid to an estate plan, so one should consult their financial planner and estate planning attorney to identify what is most appropriate for them and their family. In all, planned giving allows donors to support causes close to their hearts while ensuring their wealth serves a meaningful purpose beyond their lifetime.

In summary, the financial planning aspects of charitable giving encompass tax considerations, asset optimization, estate planning, and budgeting, to name a few. Working with a financial planner will help clients make informed decisions about integrating philanthropy into their planning strategies to achieve balance between financial success and giving while making a positive impact in the community.

The information contained in this publication is not intended as legal or tax advice.

Chapel Headshot

Kenneth D. Chapel, CFP®, RICP®

Kenneth Chapel is a Senior Financial Planner with WesBanco’s Private Client Services Group.
Ken works closely with individuals, families, businesses and their advisors to provide clients with the education and tailored advice needed to make informed decisions about their financial future. Additionally, Ken uses a goal-based financial planning approach that combines quantitative and qualitative goals and objectives to gain a holistic view in order to help achieve desired outcomes and successes.