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The Eaton Vance Tax Forward Investing Center is offering an on-demand that provides advisors with tools to transform charitable intentions into powerful tax-planning opportunities.
Highlights can be found below.
Note that the replay is eligible for 1 CE Credit for CFPs / IWI / CFAs.
Chapter 1: Foundational Tax Concepts in Charitable Giving
Cash donations: Deductible up to 60% of adjusted gross income (AGI) to public charities, 30% to private foundations.1
Appreciated securities: Long-term holdings are deductible at fair market value (up to 30% of AGI for public charities), allowing avoidance of capital gains tax.2
Short-term securities: Deductible only up to their cost basis, with lower AGI limits.
Qualified charitable distributions (QCDs): Allow donors over age 70½ to make direct individual retirement account (IRA) gifts to charities, avoiding inclusion in gross income, though QCDs cannot fund donor-advised funds or private foundations.
Chapter 2: Donor-Advised Funds and Private Foundations
Donor advised funds (DAFs): Sponsored by charities, DAFs allow donors to consolidate giving, receive immediate tax deductions (60% AGI for cash, 30% for appreciated securities), and delegate administrative responsibilities, including investment management. Unlike private foundations, DAFs do not require a 5% annual distribution at the individual account level but meet aggregate requirements.3
Private foundations: Established by individuals or families, they have lower deduction limits (30% for cash, 20% for securities) but offer greater flexibility, such as making grants to individuals and customizing investments. However, they involve upfront legal and administrative costs and may be subject to excise taxes.4
Tax advantage: Gifting appreciated securities to a DAF simplifies giving by providing a single tax receipt and allows the assets to grow tax-free within the fund, enabling potentially larger future grants.
Bunching donations: Consolidating multiple years of giving into one tax year to exceed the standard deduction threshold and maximize itemized deductions, resulting in significant tax savings for donors in higher tax brackets.
Chapter 3: Split Interest Giving Vehicles
Charitable Lead Annuity Trusts (CLATs): Charity receives income interest first, remainder returns to donor or heirs.
Charitable Remainder Vehicles (CRTs): Donor or designees receive income for life or term, remainder goes to charity.
Pooled Income Funds (PIFs) and Charitable Gift Annuities (CGAs): Prepackaged products with varying income and deduction features. At least 10% of the gift’s present value must be the charitable remainder for most vehicles, except PIFs.5 Younger donors may benefit from “young pooled income funds” due to favorable Internal Revenue Service (IRS) discount rates resulting in larger upfront deductions.
Charitable gift annuities: Offer unique features such as deferred income and are backed by the sponsoring charity, but have limitations on the number of income beneficiaries and flexibility.
Common donor objectives: Managing concentrated stock positions tax-efficiently. Providing lifetime income with longevity risk protection. Transferring wealth to future generations through income interests.
Chapter 4: Integrating Philanthropy into Client Conversations
How to give: Choosing the appropriate vehicle (direct gift, DAF, private foundation, split interest vehicle).
What to give: Prioritizing cash or appreciated securities to maximize deductions and avoid capital gains tax.
When to give: Timing gifts to optimize tax benefits, including bunching strategies and aligning giving with income fluctuations or liquidity events.
Collaboration with clients’ tax professionals: Helps to navigate complex tax implications and maximize economic value.
Opportune moments to pair philanthropy with tax planning: These include restricted stock units (RSU) vesting, business sales, Roth conversions and portfolio rebalancing.
Chapter 5: Recent Legislative Changes and Planning Implications
One Big Beautiful Bill Act (OBBBA) provisions: Effective in 2026, these reduce the economic value of itemized deductions for high-income taxpayers, including a 35% cap on benefit and a 50 basis point (bp) floor that excludes the initial portion of deductions from tax relief.6 These changes create incentives to accelerate charitable giving before 2026 to maximize tax benefits.
The Authors
Eileen Tam Chief Philanthropy Officer at the U.S. Charitable Gift Trust
Brian Smith Co-head of Eaton Vance Wealth Strategies Group
1 Internal Revenue Service (IRS)
2 IRS
3 IRS
4 IRS
5 IRS
Risk Considerations
Charitable donations should not be treated as, and are not designed to compete with, investments made for private gain. An intention to benefit the one or more qualified charitable organizations should be a significant part of the decision to contribute. The tax consequences of contributing to a charity will vary based on individual circumstances. Prospective Donors should consult their own tax advisors.
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