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Planning Ahead: Why Early Charitable Giving in 2025 Matters

As the excitement of year-end giving fades and the new year begins, now is the perfect time to start talking to clients about planning their charitable contributions for 2025. While many focus on December for philanthropy, starting early offers numerous benefits for donors and nonprofits, as well as the overall impact of charitable efforts.

Encouraging your clients to create a year-long charitable giving strategy can make a significant difference – here are some tips from us!

The Case for Starting Early

When donors plan their giving strategies at the start of the year, they gain more flexibility, control, and opportunities to maximize their impact. Early planning:

Supports Nonprofits Year-Round

Many nonprofits struggle with uneven cash flow, relying heavily on year-end contributions to meet their annual budgets. By committing to a giving plan in January, your clients can help provide financial stability to their favorite organizations throughout the year, ensuring their programs run smoothly and constituents’ needs are consistently addressed.

Optimizes Employer Matching Programs

Employer matching gift programs are often limited by available funds or deadlines. Starting early in the year ensures clients can leverage these opportunities while the funds last, avoiding the rush and potential roadblocks later.

Streamlines Financial Planning

A predictable giving schedule can simplify your clients’ cash flow management, making philanthropy an integrated part of their overall financial strategy. Automatic contributions to donor-advised funds or other charitable accounts can take the guesswork out of giving and create a structured plan for supporting causes they care about.

Maximizing the Impact of Giving

Beyond the financial and logistical benefits, early planning allows donors to make more informed and intentional decisions about their philanthropy:

Time to Research Charities

Early planning provides the opportunity to vet organizations thoroughly, ensuring your clients’ contributions align with their values and goals. The community foundation can be one way to start on this, with deep knowledge of local nonprofits and ways to maximize impact.

Engaging the Next Generation

For families, charitable planning can be a teaching moment. Starting early allows time to include children and grandchildren in conversations about giving, fostering a legacy of generosity. Younger family members can learn about the importance of philanthropy, financial responsibility, and the causes their family supports.

Avoiding the QCD Rush

For clients over 70 ½, early planning helps avoid the year-end scramble to process Qualified Charitable Distributions (QCDs) from IRAs. Completing a QCD in the first quarter not only eliminates stress but ensures funds reach charities for immediate impact.

Flexibility for Complex Giving

• Some charitable strategies require time and careful coordination. Early planning ensures there’s room to explore and execute more advanced techniques, such as:
  Gifts of Closely-Held Business Interests: These gifts can provide substantial tax benefits while allowing clients to align their business exit strategies with their philanthropic goals. However, they require coordination among legal, financial, and charitable advisors.
• Charitable Remainder Trusts (CRTs): CRTs offer both income and tax benefits while supporting charitable causes, but they require careful planning to align with your clients’ estate strategies.

Starting early leaves time to navigate these options without the pressure of last-minute deadlines, ensuring all parties can align their schedules and responsibilities.

How the Athens Area Community Foundation Can Help

The Athens Area Community Foundation is here to partner with you and your clients to create thoughtful, impactful giving strategies for 2025. From providing insights into local nonprofits to helping structure complex gifts, our team is ready to assist.

Reach out to our team today to learn how we can support you and your clients in creating a year-long charitable giving plan. Early preparation sets the stage for a rewarding and impactful 2025—for donors and nonprofits alike.