As we approach November and December, we are looking forward to the holidays, time with family, and the many opportunities to give back. Charitable giving is essential for high-net-worth (HNW) clients as it allows them to make a significant impact on causes they care about, helping to shape their legacy.
Based on a Bank of America study, we found that affluent households continue to lead in charitable giving. In 2022, 85% gave to charity, and more than half of affluent households in America report that they target charities that are close to their heart. HNW clients often find fulfillment and purpose in supporting communities and initiatives that enhance their personal brand and reputation.
A recent report from Indiana University found that charitable giving is expected to see a 4.2% boost this year and a 3.9% increase in 2025. Some of the contributing factors to the increase in giving include stock market gains, growth in personal income, and higher net worth.
Connecting Gifts to Financial Planning
It may not come as a surprise to find out that people approaching or at retirement age are among the most generous when it comes to charitable giving. This group has accumulated wealth, and volunteering and providing financial support to charitable causes can be a source of social connection. According to a recent survey by Fidelity:
- >75% of people ages 50 to 80 say that charitable giving plays a significant role in their life
- 55% of retirees report having volunteered in the past year
- 71% of pre-retirees say they’ve volunteered in the past year
You might expect that this civically engaged group would be taking advantage of the financial benefits of charitable giving. However, the Fidelity study found something that may be surprising: While many retirees report using a financial advisor to help manage their wealth, per the article, only half discussed “charitable giving” with their advisor — despite being active in charitable giving.
These are conversations that are important to your long-term financial goals. A financial advisor has the expertise to help you understand complex financial concepts, investment options, and market trends.
How to Give Generously While Receiving in Return
While most of the pre-retirees and retirees surveyed in the study were aware of at least one tax-advantaged way to support charities financially, 21% were completely unaware of any. Understandably, most of those surveyed didn’t know about the various types of gifts one can make either. In fact, less than a third of this highly engaged group knew that they could donate appreciated assets, like stocks, as part of their charitable gifts.
Start Aligning Your Financial Plans with the Cause You Love
Whether you’re donating appreciated assets — which can eliminate capital gains taxes and provide a tax deduction — or setting up tax-advantaged options like a Donor Advised Fund, our team at Peak can help you integrate strategic charitable giving into your financial plan. Not only will this help you reduce your taxable income, but it will also allow you to sustain your philanthropic efforts and make meaningful contributions for years to come.
Get in touch with us today to learn more about how we can help.
Securities and investment advisory services offered through Osaic FA, Inc., member FINRA/SIPC. Osaic FA is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic FA.
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