Three Easy Ways You Can Help Your Community

We at Pathview Wealth Advisors believe three easy ways you can help your community is through volunteering, spreading awareness, and through financial means. We can help you strategize financial giving in a tax-efficient manner.

What Is One Easy Way You Can Help Your Community That Doesn’t Involve Money?

The easiest way you can help your community without the use of money is with something more valuable, your time. Time is something you will never get back. However, if used wisely, time can be used as a tool in various ways. For one, your time can help give back and help your local community thrive.

Three ways you can do this is by:

1. Volunteering for local initiatives such as food drives, toy drives, or community gardens to name a few, are some ways you can help your community.
2. Skills based volunteerism if you have a skill or trait that an organization can use for their operations.
3. Volunteering on a board of a non-profit to help with initiatives. These can help an organization for years to come.

These are just a few incredible ways you could use your time and influence to effectively give back to an organization. Exploring these options can provide meaningful ways to assist your community.

What Are Three Ways You Can Give Back Financially Using a Tax-Aware Approach?

Three ways you can give back financially with a tax-aware approach are with the use of donor advised funds (DAFs), qualified charitable distributions (QCDs), and charitable remainder trust (CRTs).

Does Using a DAF to Help Your Community Have Benefits?

We at Pathview Wealth Advisors believe that giving back using a DAF has many benefits. For one, if you are donate appreciated stock, the benefit is magnified by the fact that you do not have to pay taxes on the unrealized gain in the underlying stock you choose. Also, you receive the full benefit of the fair market value of the stock at the time of the gift. This is a strategy that is often overlooked by donors.

Does Using a QCD Provide Any Benefits for Charitable Giving?

Yes, utilizing a tax-aware strategy called a qualified charitable distribution or QCD for short has many benefits. The use of QCDs is a tax-efficient strategy. It only applies to individuals who have pre-tax IRAs and are over the age of 70.5. For example, any money taken out of an IRA, at any point in time, is considered ordinary income. Ordinary income is simply that, income that you had in a given year that can be compared to earned wages from a job, to keep things simple. So, if you did not have a job in a given year but you took money out of an IRA, you would be taxed as if you had “earned” that income in the year of distribution.

The beauty of QCDs is that you can give up to $108,000 (as of 2025) directly to a charity, or multiple charities, of your choice. This allows you to avoid ordinary income tax altogether on the distribution. To illustrate this further, let’s say you are in a 35% tax bracket and your required minimum distribution (RMD) is $100,000. If you were to take your RMD, your tax liability, keeping things simple, would be roughly $35,000. This would leave you with a net amount of $65,000, after taxes.

Now let’s say you didn’t need the $100,000 because you are well-off, but you are charitably inclined. If this is you, then giving $100,000 directly to charity and avoiding a haircut of $35,000 might make sense for you. Of course, there are many factors to consider and tax planning would be the first step to consider. You would need to determine if this would be the appropriate option for you based on your financial goals and tax planning needs.

What Is a Third Tool You Can Use to Help Your Community?

The third charitable tool to consider would be a charitable remainder trust or CRT for short. CRTs are very interesting in the sense that you can front load them with a sizeable donation. You will receive income for you, your wife/husband, and the remainder would go to charity. One caveat is that the income received during your lifetime is taxed (or at least a portion is). The benefit is that you receive a type of annuity income stream for life. The amount of the deduction your receive depends on the deduction you elect and that also dictates the amount of income you receive from the CRT each year. These, again, are the types of calculations that tax planning and charitable planning thrive upon. Utilizing CRTs in your estate can be an effective way to help your community.

What Current Opportunities Should You Consider Given the Changes From the OBBBA?

If you are charitably inclined, you should consider seeking tax planning to find out the opportunities you could take advantage of this year. One key factor is to determine if you should load up your DAF this year (2025) over other years due to changes from the One Big Beautiful Bill Act (OBBBA).

For example, starting in 2026, charitable donations that are below 0.5% of adjusted gross income (AGI) will no longer be deductible if you itemize. This could be significant depending on your AGI.

Final Thoughts

If you are considering giving to a local charity, just know that it does not have to necessarily be through monetary means. You can donate your time and help spread awareness.

However, if you are going to give with money, it’s better to do it with a tax-aware approach. This is better versus giving blindly and leaving money on the table.

Since tax situations are uniquely complex for every individual, it is wise to seek the advice of a tax-aware advisor or CPA that offers tax planning. This is important when seeking tax planning, financial planning, or investment management to optimize giving. For that reason, we encourage you to contact us if any of these topics resonate with you. Discovering the best ways to help your community can be highly rewarding.

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