You are in Principle 8: Prepare to Give · part of the Prosperity Compass™ · WealthScaping home
Prepare to Give
"Give back and show gratitude, and blessings increase."
True prosperity flows in a cycle. When you give with intention and gratitude, you participate in an abundance mindset that, research shows, increases what returns to you in well-being, relationships, and meaning.
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The Prosperity Cycle
"The measure you give will be the measure you get back." — Luke 6:38
What the Research Shows
Generosity is good for the giver. In a well-known experiment, people randomly assigned to spend money on others ended the day happier than those told to spend it on themselves (Dunn, Aknin & Norton, Science, 2008). Survey data from 136 countries found the same link between giving and well-being around the world, in rich and poor nations alike (Aknin et al., Journal of Personality and Social Psychology, 2013). Pair your giving with a gratitude practice: explore the Gratitude Suite.
Charitable Giving
Strategic philanthropy aligned with your values—supporting causes that matter while maximizing tax benefits.
Gifting
Sharing resources with family using tax-smart strategies that preserve wealth across generations.
Tithing
The spiritual practice of giving first—honoring God with the firstfruits builds faith and provision.
Legacy Planning
Creating impact beyond your lifetime through charitable trusts, bequests, and planned giving.
2026 Key Giving Limits
Limits change yearly; verify current figures at IRS.gov.
Charitable Giving Platforms
Donor-Advised Funds (DAFs) have revolutionized charitable giving—get an immediate tax deduction, invest for growth, then grant to charities over time.
Fidelity Charitable
Distributes billions of dollars each year to hundreds of thousands of nonprofits.
- Hundreds of thousands of donors
- Accept cash, stock, crypto, real estate
- Investment options for growth
- $0 minimum to open (online)
Vanguard Charitable
Founded 1997. Independent 501(c)(3) with Vanguard's low-cost philosophy.
- Mission: Increase philanthropy's impact
- Multiple investment pools
- Recurring grant programs
- Legacy giving options
Schwab Charitable
Accept wide variety of assets including private company stock.
- Accept complex assets
- No minimum grant amount
- 24/7 online access
- Integration with Schwab accounts
Daffy
A modern, app-based donor-advised fund with very low minimums.
- Flat monthly membership instead of a % fee
- Accepts cash, stock, crypto
- Give to nearly any U.S. charity
- Mobile-first experience
DAF Strategy: Bunching
Bunching Strategy: Contribute multiple years of charitable gifts in one year to exceed the standard deduction, then distribute grants over subsequent years. This maximizes deduction value while maintaining steady support for your causes. Starting in 2026, itemized charitable deductions only count above 0.5% of AGI, which makes bunching even more valuable. Non-itemizers can now deduct up to $1,000 ($2,000 joint) of cash gifts to charities, though not gifts to DAFs.
Charity Research & Evaluation
Give with confidence. These tools help you evaluate nonprofit effectiveness and impact.
Charity Navigator
Rates a large share of U.S. charities on accountability, finance, and impact.
- 0-4 star ratings
- Accountability & Finance beacon
- Impact & Results beacon
GuideStar by Candid
Comprehensive nonprofit data from 990s and direct reporting.
- 990 forms and financials
- Leadership information
- Platinum/Gold/Silver seals
CharityWatch
In-depth analysis going beyond surface financials.
- A-F letter grades
- Program efficiency ratios
- Cost to raise $100
IRS Tax Exempt Search
Verify 501(c)(3) status and eligibility for tax-deductible contributions.
- Confirm tax-exempt status
- Check for revocations
- View EIN numbers
Tax-Smart Giving Strategies
Qualified Charitable Distributions (QCDs)
For IRA owners age 70½+, QCDs offer powerful tax benefits by transferring directly to charity.
QCD Benefits
- Excluded from taxable income
- Counts toward RMD
- Up to $111,000/year (2026)
- May lower Medicare premiums
- No itemizing required
QCD Rules
- Age 70½ or older required
- Direct transfer from IRA to charity
- Only from IRA (not 401k)
- Cannot go to DAFs or foundations
- December 31 deadline
Giving Vehicle Comparison
- DAF: Immediate deduction, invest, grant later
- CRT: Income stream + charity remainder
- Foundation: Maximum control, higher cost
Appreciated Asset Strategy
Donate appreciated stock held over 1 year instead of cash:
- Avoid capital gains tax on the appreciation
- Deduct full fair market value (up to 30% of AGI)
- Double benefit: Tax deduction + avoided gains tax
Charitable Trusts: Advanced Planned Giving
For those with significant appreciated assets, charitable trusts offer the most sophisticated giving tools in the tax code—providing income streams, capital gains avoidance, estate tax reduction, and wealth transfer to heirs, all while creating meaningful charitable impact. These "split-interest" trusts divide benefits between charitable and non-charitable beneficiaries.
Charitable Remainder Trusts (CRTs): Income Now, Charity Later
You (or loved ones) receive income for life or a term of up to 20 years; the remainder passes to charity. Because CRTs are tax-exempt under IRC §664, the trust can sell highly appreciated assets—stock, real estate, a business—with no immediate capital gains tax, then reinvest the full proceeds to generate your income stream. You also receive an immediate partial income tax deduction for the present value of the charitable remainder.
CRAT (Annuity Trust)
- Fixed dollar payout set at creation (5%–50% of initial value)
- Predictable, stable income regardless of performance
- No additional contributions allowed
- Best for: those wanting a guaranteed income floor
CRUT (Unitrust)
- Fixed percentage of trust value, revalued annually
- Payments can grow—natural inflation hedge
- Additional contributions permitted
- Best for: long horizons; the most popular CRT choice
CRUT Variations
- NIMCRUT: Pays lesser of net income or the percentage, with make-up provision—powerful for income deferral
- Flip CRUT: Starts as NIMCRUT, "flips" to standard CRUT on a trigger event—the go-to structure for real estate and business interests
Charitable Lead Trusts (CLTs): Charity Now, Heirs Later
The mirror image of a CRT: the charity receives income payments first (for a term of years or lifetime), and the remainder passes to your heirs—often with dramatically reduced or even zero gift and estate tax. A properly "zeroed-out" CLAT can transfer all trust growth above the IRS §7520 rate to your children completely free of transfer tax, without using any lifetime exemption.
Why Families Use CLTs
- Transfer wealth to heirs gift/estate tax-efficiently
- "Freeze" asset values—all growth escapes transfer tax
- Support your charities systematically for years
- Grantor CLATs offer large upfront income tax deductions
CRT vs. CLT at a Glance
- CRT: You get income → charity gets remainder
- CLT: Charity gets income → heirs get remainder
- CRT shines: Appreciated assets + income need
- CLT shines: Estate tax exposure + charitable intent
Charitable Gift Annuities
- Simpler cousin of the CRT: a contract with a charity
- Fixed lifetime payments, partial tax deduction
- Lower minimums (often $5,000–$25,000)
- SECURE 2.0 allows a one-time QCD (up to $55,000 in 2026) to fund a CGA or CRT from your IRA
Charitable Trust Resources
IRS: Charitable Remainder Trusts
The authoritative source—CRT requirements, annotated sample declarations of trust, and Form 5227 filing obligations.
- Payout limits: 5% minimum, 50% maximum
- 10% remainder requirement
- IRS model trust forms
Fidelity Charitable: Trust Guides
Excellent educational overviews of both remainder and lead trusts, including how they pair with donor-advised funds as the charitable beneficiary.
- CRT vs. CLT comparisons
- Grantor vs. non-grantor structures
- DAF-as-remainderman strategy
American Council on Gift Annuities
The ACGA publishes the suggested maximum gift annuity rates that most charities follow—check current rates by age before establishing a CGA.
- Current suggested rate tables
- State regulation information
- Consumer FAQ on gift annuities
ACTEC: Find an Estate Attorney
Charitable trusts are irrevocable and unforgiving of drafting errors. The American College of Trust and Estate Counsel directory lists peer-elected specialists.
- Fellow directory by state
- Educational podcasts on CLATs/CRTs
- Planning resources for families
The Concentrated Stock Solution
Classic CRT scenario: You hold $1.5 million of stock with a $150,000 cost basis. Selling outright could trigger roughly $250,000+ in capital gains taxes. Contribute it to a CRUT instead: the trust sells tax-free, reinvests the full $1.5 million in a diversified portfolio, pays you income for life, and you receive an immediate charitable deduction—while the remainder ultimately blesses your chosen causes. The tax dollars that would have vanished now compound for decades.
Private Family Foundations
A private family foundation is the pinnacle of structured philanthropy—your own 501(c)(3) charitable entity, controlled by your family, capable of engaging children and grandchildren in a shared mission of giving across generations. Unlike a DAF, you retain complete legal control over investments, grantmaking, and governance.
Foundation Advantages
- Complete family control of grants and investments
- Multigenerational engagement and legacy
- Can pay reasonable compensation to family members
- Can grant to individuals, run programs, make PRIs
- Exists in perpetuity if desired
Key Requirements
- 5% annual payout of net investment assets required
- 1.39% excise tax on net investment income
- Form 990-PF filed annually (publicly viewable)
- Strict self-dealing prohibitions with family
- Deductions: 30% AGI (cash), 20% AGI (appreciated securities)
Foundation vs. DAF
- Control: Foundation total; DAF advisory only
- Cost: Foundation higher; DAF minimal
- Privacy: DAF anonymous; 990-PF is public
- Deduction limits: DAF more generous (60%/30% AGI)
- Practical minimum: Many advisors suggest $250K–$1M+ before a foundation beats a DAF
Family Foundation Resources
Foundation Source
Turnkey foundation creation and full back-office support—grant processing, tax filings, compliance monitoring—so your family can focus on mission, not paperwork.
- Foundation setup in days, not months
- Ongoing compliance and 990-PF prep
- Grant Certificates for extended family
National Center for Family Philanthropy
Nonprofit dedicated to families who give—research, peer networks, and guidance on governance, next-gen engagement, and succession.
- Family governance resources
- Next-generation engagement tools
- Peer learning communities
Exponent Philanthropy
Membership community for foundations with few or no staff—exactly how most family foundations operate. Practical guidance for doing more with less.
- Resources for "lean funders"
- Trustee education programs
- Annual conference and courses
IRS: Private Foundations
The complete regulatory framework—minimum distribution requirements, self-dealing rules, excise taxes, and Form 990-PF instructions.
- 5% payout calculation rules
- Self-dealing guidance
- Life cycle of a private foundation
The Deeper Return: Raising Generous Children
The greatest asset a family foundation transfers isn't money—it's values. Sitting around a table deciding together which causes to fund gives children and grandchildren a working apprenticeship in stewardship, empathy, and purpose. Research on family philanthropy consistently finds that shared giving is among the most effective vehicles for transmitting values across generations—and it gives adult children a reason to keep gathering long after the founders are gone. A foundation is a wealth transfer strategy; it is also a family formation strategy.
Family Gifting Strategies
Share your wealth with loved ones using tax-advantaged strategies.
Annual Gift Tax Exclusion
Give up to the annual exclusion to unlimited recipients with no gift tax or reporting.
- $38,000 per recipient for married couples
- No lifetime exemption reduction
- No Form 709 if each spouse gives separately (gift-splitting requires one)
529 Plan Superfunding
Contribute up to 5x the annual exclusion to a 529 education savings plan.
- $95,000 single / $190,000 couple (2025)
- Removes assets from estate
- Supports education goals
Direct Education Payments
Pay tuition directly to educational institutions—unlimited and tax-free.
- Must be tuition only
- Paid directly to school
- No gift tax impact
Direct Medical Payments
Pay medical expenses directly to healthcare providers—unlimited and tax-free.
- Paid directly to provider
- Insurance premiums included
- No gift tax impact
The Practice of Tithing
Tithing—giving the first 10% of your income—is an ancient spiritual practice that builds faith and positions you to receive blessing.
Biblical Foundation
- Proverbs 3:9-10: Honor the Lord with your wealth and firstfruits
- Malachi 3:10: Bring the whole tithe, test me in this
- 2 Cor 9:7: Give cheerfully, not under compulsion
Tithe vs. Offering
- Tithe: The first 10% to your local church
- Offering: Additional giving beyond the tithe
- Firstfruits: Give before other expenses
Practical Benefits
- Breaks the power of money over your life
- Develops trust in God's provision
- Creates discipline and intentionality
- Supports your faith community
Essential Books on Giving
The Life You Can Save
Influential work on effective giving to alleviate global poverty.
View on Amazon
Doing Good Better
How effective altruism can help you make smarter choices about giving.
View on Amazon
Give and Take
Explores how generosity leads to success. Givers, not takers, rise to the top.
View on Amazon
Reflection Questions
1. What causes or values are most important to you, and how does your current giving reflect them?
2. Are you giving with intention and strategy, or reactively when asked?
3. Do you practice firstfruits giving (tithing before other expenses), or do you give from what's left over?
4. What legacy do you want to leave? How will your generosity be remembered?
5. Are you using tax-smart strategies (appreciated stock, QCDs, DAFs) to maximize your philanthropic impact?
6. Would a charitable trust or family foundation serve your legacy better than outright gifts? Could shared giving become the gathering place that keeps your family connected across generations?
Kevin Brough's background includes 20 years in financial services, but he is no longer a licensed financial advisor, insurance agent, or securities broker.
Affiliate Disclosure: Book links are Amazon affiliate links; VisionLogic may earn a small commission at no additional cost to you. Other resource links are not affiliate links at this time.
