For many families, charitable giving is where the numbers finally connect to meaning. It is the part of a financial plan that reflects personal values, supports important causes, and when structured thoughtfully, can work in harmony with goals around tax efficiency, cash flow, and long-term legacy.
The most familiar approach is direct giving, whether through annual cash donations or periodic gifts to specific organizations. For many donors, this remains the foundation of their philanthropy. Another widely used strategy is donating appreciated securities. By contributing stock or mutual fund shares held long-term, families can often avoid capital gains tax while still potentially receiving a charitable deduction for the full market value, creating a more efficient outcome than giving cash.
For retirees, qualified charitable distributions (QCDs) from IRAs offer a multi-purpose solution. Individuals over age 70½ can direct up to $111,000 per year (2026 maximum) from an IRA to qualified charities, satisfying required minimum distributions while reducing taxable income.
More advanced tools may play a role for certain families. Charitable remainder trusts and charitable lead trusts can balance income needs with philanthropic intent. Private foundations may appeal to those seeking a formal, multi-generational legacy structure, though they come with higher costs and administrative complexity.
Among these choices, donor advised funds (DAFs) have emerged as one of the most flexible and widely used solutions. A DAF allows a family to make an irrevocable charitable contribution to a dedicated account, receive an immediate tax deduction, and then recommend grants to qualified charities over time.
We often see DAFs make the most sense during high-income or liquidity years, after a business sale, an unusually large bonus, or a concentrated stock transaction. In those moments, families may want to be generous while also being thoughtful about the tax ripple effects. A DAF allows them to “front-load” multiple years of giving into a single tax year, potentially offsetting a spike in income while still supporting their favorite organizations over time.
Donor advised funds also simplify the mechanics of giving. Rather than tracking dozens of donations and receipts, families manage their charitable activity in one place. Contributions of appreciated securities are typically seamless, and grants can be made publicly or anonymously. Many families also use DAFs to engage children in philanthropy, creating a practical way to pass down values alongside wealth.
At Rockland Trust, we view donor advised funds as a natural extension of comprehensive financial planning. When charitable strategies are integrated with a client’s broader investment, tax, and estate planning framework, giving becomes part of the overall design rather than an afterthought, supported by continuity, oversight, and long-term stewardship.
Charitable giving is most powerful when it is intentional. By understanding the full range of options and how tools like donor advised funds can provide both structure and flexibility, families can transform generosity into a lasting, purposeful part of their financial lives. Please contact your Relationship Manager for more information.
