As we head into the final week of a strong year for equities markets, we at LPL Research are thinking about the season of giving, to friends and loved ones as we wind down a difficult year in this season of giving, but also to favorite charitable organizations that support those in need and causes we care about. Philanthropic giving crosses political boundaries, can be local or global, and powerfully reflects the individual choices of donors to channel support to where they think it’s most needed. LPL Research wishes all a joyous holiday season and today shares some information about charitable giving that may make everyone’s holiday season a little brighter.
- The habit of end of year giving is tied to the holiday season and end-of-year reflection, but also to the tax calendar. Almost a third of charitable giving takes place in December and just over 10% over the last three days of the year (Source: Nonprofit Tech for Good). With fewer people itemizing deductions, end of year giving may not have the same sense of urgency. The truth is, no-one gives because of the tax deduction. It’s just a small incentive reflecting national values and creates a little extra motivation before the tax year ends.
- Many workplaces match some charitable donations, LPL among them. Check with your workplace to see if they have matching funds. Matching funds may be limited. If your workplace no longer has matching funds available, take pride in your employer’s support of charitable giving and your colleagues’ philanthropic efforts. At the same time, consider starting to give earlier in 2022, since matching funds are often replenished at the start of the year.
- For those with the means, there are charitable investing structures that can help maximize donations, minimize taxes, and build a more sustainable charitable legacy for favorite organizations. Some examples are Donor Advised Funds and for estate planning Charitable Remainder Trusts and Charitable Lead Trusts. Reach out to your financial professional if you think one of these options might be right for you.
LPL Research wishes all a joyous holiday season and looks forward to continuing to provide market perspective to our followers in 2022. Follow LPL Research through our blog, Twitter (@LPLResearch), and YouTube channel (youtube.com.LPLResearch). Happy holidays!
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