Charitable giving as an end-of-year business strategy

As 2024 comes to a close, business owners also have increasing profitability and minimizing tax burden on their holiday to-do lists.

Understanding your financial standing for the year is where you have to start.

Consult your certified public accountant (CPA) or tax adviser to determine needed changes in your tax strategy as the year wraps up.

Did you have a successful year or see a surge of revenue in the last quarter?

Depending on financial performance, making a charitable gift could be a viable option to both reduce your tax liability as a business owner and make a meaningful impact on your community.

Making a sizable donation is a simple and efficient way to make a positive impact and get that end-of-year tax relief.

With the Dec. 31 deadline looming, contributing to a donor advised fund allows you to make a donation while providing extra time to decide how to spend your financial gift later in the new year.

By contributing to a trusted donor advised fund, your business can participate in the season of giving and reap practical tax benefits on your investment. This method of charitable investment is a tax-savvy way to grow funds tax-free for an increased philanthropic effect.

A donor advised fund works similarly to an investment account. You deposit assets, either a sum of money, shares of appreciated stock or business interest, into the fund that immediately becomes recognized as a charitable contribution from your business, decreasing your tax liability. These dollars are then invested and grow over time until the business is ready to make a grant to the charity of their choice.

Unlike a one-time gift, a donor advised fund allows you the flexibility to develop a long-term philanthropic strategy that aligns with the goals of your team. Studies show that employees feel more connected and have a greater sense of purpose when their employer gives back to the community. With a donor advised fund, you can work with your team to shape a legacy of giving that mirrors your brand values and the passion of your employees.

At Tulsa Fiduciary Fund, we help our clients create a long-term grant strategy to donate to local nonprofits and fund specific community projects over time.

Once your philanthropic plan is in place, using a Donor Advised Fund streamlines the giving process and reduces time and effort of managing individual gifts.

Once you’ve made the choice to contribute to a donor advised fund, it is important to select a fiduciary that you can trust. Key principles to look for are transparency, financial experience, low fees to maximize contributions and a deep understanding of the local community.

There are also many benefits to selecting a local fiduciary who knows the market and has ties to the community in which you do business.

For example, leadership of the Tulsa Fiduciary Fund have served on boards of local nonprofit organizations throughout the community.

While there are plenty of national investment firms that offer donor advised funds, working with a local fund allows you to partner with an organization that knows the landscape of Tulsa. The nonprofit organizations in our community provide critical services and deserve financial services that support their work without all the red tape.

Charitable giving through a donor advised fund not only makes an important impact on the community. Establishing your business as a leader for social responsibility generates goodwill with employees, local stakeholders and clients.

As you prepare to close out the year strong, consider charitable giving through a local donor advised fund as a strategy to reduce tax liability, support causes you care about and make a lasting community impact.