Kyle Penney

It’s hard to believe but here we are again in the fourth quarter of another year. Where did the time go?

When the Christmas decorations begin to fill the aisles, it means it is also time to plan for end of year giving. Of course, if you make cash gifts to charities at the end of the year, which many people do, you don’t have to do much planning. You can just wait to see what funds are available to give at the last minute and write a few checks. However, if you are trying to be strategic and maximize your charitable giving, now is the time to plan how and what you will give to benefit your favorite charities.

As I have shared previously, according to research, one-third of all annual charitable giving takes place in the final three months of the year and one-quarter of all charitable giving takes place between Thanksgiving and December 31. The tax deduction for charitable giving has a hard deadline of December 31, so it is helpful to note the way holidays fall on the calendar for 2023, which may affect the timing of your gifts.

Christmas falls on a Monday in 2023, so you can plan on most businesses, charities, financial institutions and the stock market to all be closed on Monday, December 25. New Year’s Eve falls on a Sunday in 2023, so even though some banks may be open limited hours on Saturday, December 30, all stock trading for the year must be complete by the close of the markets at 4 p.m. ET on Friday, December 29. Many charities will close early or have limited holiday office schedules, so make sure your favorite charity is open if you want to drop by and hand-deliver a gift. We know many of you are working with advisors to the last minute each year, so please note that East Texas Communities Foundation will be closed on December 22 and 25, but open 8-5 on Tuesday, December 26 through Friday, December 29 to assist you with your last-minute gifts.

Gifting shares of stock or other publicly traded securities is a wise choice for many donors because of the opportunity to avoid capital gains taxes which would otherwise be incurred if you sell securities and use the proceeds of the sale to make charitable gifts. In fact, using a donor-advised fund is a great strategy to handle your contributions of publicly traded securities. A donor advised fund allows you to make your gifts of publicly traded securities periodically, usually once a year or every few years, then use the donor-advised fund to make smaller gifts to multiple charities more frequently throughout the year.

To reap the tax advantages of gifting publicly traded securities, donors need to make sure they don’t run out of time to properly complete a gift at the end of the year. Your gift of securities is counted when the charity receives it in their account, which typically requires 1-2 trading days from the time the instructions are given to make a trade, and could be 10-14 days for some mutual funds or other securities with more administrative requirements. If you are thinking about a gift of publicly traded securities, it is best to contact your broker well in advance of your gift and discuss the specific securities you would like to contribute and the appropriate timing to complete those transfers.

If you are making gifts online by credit card, ACH or other online payment method such as Venmo or PayPal, you can generally consider the payment delivered to the charity when the transaction is irrevocably submitted to the payment processor. You will usually receive an immediate electronic confirmation and acknowledgement that your gift was completed. In most cases, such an electronic transaction can be made up to the stroke of midnight on December 31, but don’t push your luck, because there can always be unforeseen connectivity and system issues which could hamper your ability to complete a transaction. The IRS will only care about the date and time your gift was completed, not the dates and times of your attempted gifts that failed.

If you want to make a gift of something more complex, such as real estate or business interests, now is the time to act. Gifts of complex assets usually require timely coordination with your team of advisors to comply with IRS requirements and seek approval from the receiving charity. We are entering the season of giving, so giving yourself and your favorite charities time to properly consider your gift will make giving a more joyful experience for all involved, and may be your next best opportunity to Give Well.