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The Benefits of Charitable Giving Thumbnail

The Benefits of Charitable Giving

Insights

How Giving Back Can Affect Your Finances, Your Legacy, and Society

Many people think about charitable giving during certain times of the year, but its relevance is not limited to seasonal traditions. Giving can align personal values with financial goals, while also contributing to the well-being of communities and causes.

In 2024, charitable donations in the U.S. totaled more than $592 billion, according to Giving USA, supporting vital programs in education, healthcare, social services, and the arts. Beyond the measurable dollars, charitable giving can have personal, financial, and societal benefits which may make it a meaningful way for individuals and families to create a philanthropic legacy.

At Kimelman & Baird (K&B), we believe giving is not only a privilege but also an opportunity. “Charitable giving can be one of the meaningful ways clients connect their financial lives with their values,” says Scott Kimelman, Partner & Co-Chief Investment Officer. “It allows them to see tangible impact in the causes they care about, and certain giving strategies may have potential tax advantages and long-term estate considerations.”

The Personal Rewards of Giving

Research from the Greater Good Science Center at UC Berkeley highlights that generosity is linked to reduced stress, increased happiness, and even improved health outcomes. Families who give together report strengthened bonds across generations, creating a shared sense of purpose and shared tradition.

“Charitable giving is one way to engage younger generations.” notes Yasmeen Mock, Partner & Chief Operating Officer; Head of Client Relations and Portfolio Administration. “When families define the causes that matter most to them, it sparks conversations about values, priorities, and legacy. In some cases, we see that giving can support deeper engagement and continuity across generations.”

The Financial Aspects of Charitable Giving

Charitable contributions may serve as a component of broader financial planning strategies. Key considerations include:

  • Tax Advantages: Donations of cash, stock, or other appreciated assets may qualify for income tax deductions, subject to IRS limits and guidelines. In certain cases, donating appreciated securities directly to a qualified charity can result in the avoidance of capital gains taxes.
  • Retirement Planning: Individuals aged 70½ or older may utilize Qualified Charitable Distributions (QCDs) from IRAs to donate up to $100,000 annually to eligible charities. These distributions can be excluded from taxable income if specific IRS requirements are met.
  • Estate Planning: While charitable gifts can be used for ongoing support for cherished organizations, such gifts may also reduce the taxable value of an estate.

“Charitable giving is often integrated alongside other financial priorities.” says Sapan Vyas, Partner & Co-Chief Investment Officer. “We help clients balance charitable goals with retirement, lifestyle, and legacy needs so that giving strategies reflect their objectives and constraints.”

Amplifying Impact Through the Fidelity Charitable Giving Account®

One way to consolidate charitable giving is through the Fidelity Charitable Giving Account®, a donor-advised fund (DAF) available to all donors.

A DAF functions like a charitable investment account for the sole purpose of supporting charitable organizations:

  • Contributions of cash, stocks, mutual funds, or other eligible assets may qualify for tax deduction in the year they are made, subject to IRS rules.
  • Contributions to a DAF may be invested, and any growth is not subject to tax while held in the account and may increase the amount available for future giving. Investment performance is not guaranteed and may vary.
  • Donors maintain the flexibility to recommend grants to their chosen charities on their own timetable.

The Fidelity Giving Account has no minimum initial contribution and low fees, which may suit donors seeking flexible options. It also offers sustainable and impact investing options, allowing donors to align both their portfolio and philanthropy with their values.

The Societal Impact of Charitable Giving

Charitable contributions are the lifeblood of nonprofits that provide essential services in our communities. From healthcare and education to social justice and the arts, these organizations rely on donor support to innovate, expand, and sustain their missions. The multiplier effect is powerful: each gift not only helps a nonprofit serve more people but also strengthens the broader community.

Building Your Legacy Through Giving

At Kimelman & Baird, philanthropy is more than a seasonal activity, it’s part of our identity.  For more on this, read Living Your Legacy through Philanthropy — Kimelman & Baird. Just as our firm donates annually to organizations aligned with our values, we work closely with clients to develop plans that reflect their own vision for impact.

Whether your goal is to reduce taxes, involve your family in shared values, or provide ongoing support for organizations you care about, thoughtful charitable giving can be structured to reflect those aims and your circumstances.

If you’d like to explore how giving might fit into your broader financial plan—or learn more about the Fidelity Charitable Giving Account—we invite you to connect with our team.

Let us help you align your finances with your values and make generosity a cornerstone of your legacy.

https://givingusa.org/giving-usa-2025-u-s-charitable-giving-grew-to-592-50-billion-in-2024-lifted-by-stock-market-gains/

https://ggsc.berkeley.edu/images/uploads/GGSC-JTF_White_Paper-Generosity-FINAL.pdf

Kimelman & Baird is not affiliated with Fidelity Investments. This communication has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. All information or ideas provided should be discussed in detail with an advisor, accountant, or legal counsel prior to implementation. Investing involves risk including the possible loss of principal. Past performance is not a guarantee of future results or success. Actual results could differ materially with each client.