Because QCDs are so useful, our team is keeping an eye on pending legislation that might expand the ways your clients can use them. Specifically, Congress continues to consider two bipartisan charitable giving bills: the Charity Parity Act (S. 2204/H.R. 4495), which would permit QCDs directly from employer-sponsored retirement plans, such as 401(k)s, in addition to traditional IRAs, and the IRA Charitable Rollover Facilitation and Enhancement Act (S. 3975), which would extend QCD eligibility to donor-advised funds. Neither proposal has advanced beyond committee, but both are still active and could expand charitable giving options for your clients if enacted.

We’ll continue to keep you informed as these proposals develop.

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Four recent articles reinforce a common point: the most effective charitable planning rarely happens in response to a single tax event. Instead, it grows out of ongoing conversations about a client’s values, family, financial goals, and legacy.

How to Turn Wealthy Clients’ Charitable Giving Into a Cohesive Plan

–Kiplinger

This article encourages advisors to move beyond treating charitable gifts as one-off transactions and instead help clients develop a coordinated philanthropic strategy across tax planning, estate planning, wealth transfer, and family dynamics.

When Clients Ask About Their Tax Bill, the Answer Might Be Philanthropy
–Advisor Perspectives

The focus of this article is that major tax events—such as business sales, retirement plan distributions, or highly appreciated assets—often create ideal opportunities to discuss charitable giving. Even though the transactional elements might spark a conversation, substantive charitable planning goes far beyond a single transaction and is most effective when it becomes part of a broader financial planning conversation.

Purpose-Driven Wealth Starts with Asking the Right “Why”
–InvestmentNews

This article outlines why technical expertise is important, but meaningful planning begins by understanding what clients hope to accomplish with their wealth. Advisors who ask deeper questions about values, purpose, and legacy can naturally open the door to conversations about intentional charitable planning and stronger long-term client relationships.

The High-Net-Worth Want Philanthropy Guidance

–Financial Advisor Magazine

The article reports that high-net-worth clients increasingly expect their financial advisors to provide philanthropic guidance as part of comprehensive wealth planning. This creates a meaningful opportunity for advisors who proactively include charitable giving in conversations with their clients.

Taken together, these articles reveal a clear pattern: Clients don’t simply want to save taxes—they want their wealth to reflect what matters most to them. Our team can be a resource as you explore those goals with your clients and bring charitable planning into the conversation early. We welcome the opportunity to work alongside you and your clients.

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A popular strategy that deserves special attention in year-end planning is “bunching” charitable contributions. The bunching concept became widely discussed when the Tax Cuts and Jobs Act of 2017 substantially increased the standard deduction for calculating income tax. According to important historical data, this change caused many taxpayers who previously itemized deductions to begin claiming the standard deduction instead because their annual charitable gifts and other deductible expenses were no longer sufficient to exceed the standard deduction threshold.

Since the beginning of 2026, charitable planning has become even more nuanced. The One Big Beautiful Bill Act added a new limitation under Internal Revenue Code Section 170 requiring that itemized charitable deductions must generally exceed 0.5% of adjusted gross income before a deduction is available. In addition, Section 68 now effectively limits the tax benefit of itemized deductions for taxpayers in the highest marginal income tax bracket to 35%. These two new provisions are sometimes called the “floor” and the “cap.” Although in many cases charitable giving remains highly tax-efficient, these changes make proactive planning increasingly important.

So, what is “bunching”? And why is it so useful under current tax law? Here’s how it works:

—Rather than making charitable gifts in roughly equal amounts each year, a client may benefit from consolidating two or more years of planned charitable contributions up front into a single tax year.

—By concentrating, or “bunching,” donations into one year, the client may be better positioned to itemize deductions in that year while claiming the standard deduction in subsequent years, potentially producing greater cumulative tax savings over time.

For many of your clients, a donor-advised fund at the Lenawee Community Foundation serves as an effective vehicle for implementing a bunching strategy. That’s because a client can make a single, larger contribution to the donor-advised fund, generally claim the charitable deduction in the year of the contribution under Internal Revenue Code Section 170(a), and then recommend grants to favorite charities now and in future years. In short, the timing of the income tax deduction is separated from the timing of charitable distributions, allowing the client’s favorite nonprofits to continue receiving consistent annual support.

As year-end approaches, many clients will naturally ask whether they should “bunch,” or accelerate, charitable gifts before December 31. Advisors who raise the bunching conversation now and coordinate early with our team can help clients evaluate whether this strategy aligns with both their philanthropic objectives and their broader financial plans while allowing plenty of time to implement the strategy thoughtfully.

Bunching is not the only technique worth considering well before year-end! Here are two additional important reminders for your client conversations:

—Remember that charitable planning opportunities are typically even more attractive when appreciated securities are involved. Under Internal Revenue Code Section 170(e)(1)(A), a client who contributes long-term appreciated publicly traded securities to a public charity, including a donor-advised or other type of fund at the Foundation, generally may deduct the property’s fair market value (subject to the applicable adjusted gross income limitations) while avoiding recognition of the built-in capital gain that otherwise would result from a sale. This is usually a much better tax outcome than giving cash.

—Note that Qualified Charitable Distributions allow IRA owners age 70 ½ or older to give directly to charity tax-free—up to the 2026 annual limit of $111,000—even before required minimum distributions begin, potentially lowering adjusted gross income and reducing taxes on Social Security benefits and Medicare premiums. For a subset of your clients, this is important in light of the charitable deduction limitations under the One Big Beautiful Bill Act.

Our team is honored to work alongside you all year long to help structure charitable gifts in a way that advances your clients’ philanthropic goals while making the planning process as seamless as possible. We welcome the opportunity to help you and your clients get an early start on year-end charitable planning.

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So, what happens when one of these clients starts asking questions about what’s on their tax return? For instance:

“Wait a minute. I distinctly remember that my stock was worth $81.95 per share when the market closed on the day I transferred 100 shares to the Foundation to add to my donor-advised fund. But my tax return is showing a deduction amount less than $8,195. Is that a mistake?”

It’s a great question, and of course you know the answer! When a client contributes publicly traded securities to a fund at the Lenawee Community Foundation—or directly to another public charity—the amount of the charitable deduction is indeed based on the fair market value of the asset at the time of the gift under Internal Revenue Code Section 170 and Treasury Regulation § 1.170A-1(c). For publicly traded securities, however, “fair market value” is not ordinarily the closing price. Instead, the IRS valuation rule generally uses the average between the highest and lowest quoted selling prices on the date of the contribution. This methodology appears in Treasury Regulation § 20.2031-2(b)(1), outlining the IRS’s longstanding valuation rules.

Here’s a simple example.

Suppose a client transfers shares to a donor-advised fund at the Foundation on August 20. On that date:

• High price: $82.40
• Low price: $79.60
• Closing price: $81.95

Many clients understandably assume their deduction will be based on the $81.95 closing price. Under the applicable valuation rules, however, the value generally used is the average of the high and low prices:

($82.40 + $79.60) ÷ 2 = $81.00 per share

The difference may be relatively small in many cases. For larger gifts, or during periods of market volatility, it can become meaningful.

You may know this rule well, but many clients do not. That’s why it’s a good idea to remind a client about this rule when they’re making gifts of appreciated stock. It is also important to remember that determining the valuation date itself may involve additional analysis. The relevant date is generally the date the gift is considered complete for federal tax purposes, which may differ depending on how the securities are transferred and when control passes to the charitable organization. Because of these nuances, it’s wise to coordinate closely with our team whenever timing is critical, such as at year end.

Fortunately, our team regularly works with gifts of appreciated securities and can help facilitate a smooth transfer. Especially as the fall planning season approaches, clients often focus on maximizing charitable deductions while avoiding capital gains tax on appreciated investments. Being prepared to explain why the deduction is based on the average of the day’s high and low—not simply the closing price—can be a helpful component of client conversations.

Please reach out to our team anytime, especially when a client is getting ready to transfer stock. We will keep an eye out for it and help ensure the transfer and processing go smoothly. Thank you for the opportunity to partner with you in serving your clients!

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What’s going on here?

Business succession planning is becoming increasingly important as a growing share of American wealth is tied to privately held companies. According to the National Center for the Middle Market at The Ohio State University, approximately 200,000 U.S. companies generate annual revenues between $10 million and $1 billion. At the same time, a recent Wall Street Journal article highlighted the growing ranks of wealthy Americans whose fortunes were built through private business ownership and equity growth. For many of these business owners, a succession event may represent the largest liquidity event of their lifetime. For attorneys, CPAs, and financial advisors, these trends point to a growing need for thoughtful planning around business transitions, wealth transfer, and charitable legacy strategies.

What is most important for advisors to know?

The single most important takeaway is that charitable planning should be part of the succession conversation as early as possible. Whether a client is preparing to sell a closely held business, transfer ownership to family members, explore an employee stock ownership plan (ESOP), or simply begin thinking about life after the company, charitable planning deserves a seat at the table early in the process.

Too often, philanthropy enters the conversation only after a transaction is well underway or already complete. By then, some of the most effective planning windows may be closed. By asking the right questions early, you can help your clients support meaningful causes, potentially reduce taxes, involve family members in giving, and create a lasting charitable legacy.

What questions should I ask my clients?

Here are four “must ask” questions and why they are important, plus a word of caution.

1. Have you thought about including charitable giving in your business succession plan?

Many business owners have most of their wealth tied up in their companies. When a sale or ownership transition occurs, the resulting tax consequences can be significant. In some situations, contributing a portion of closely held business interests to charity before a transaction may allow a client to support charitable goals while potentially reducing capital gains tax exposure.

Again, timing is key. Once letters of intent are signed or a transaction becomes binding, certain charitable planning opportunities may no longer be available. That’s why advisors should raise charitable planning discussions long before the deal reaches the finish line.

Remember that charitable planning is not limited to third-party sales. Clients considering ESOPs, family transfers, recapitalizations, redemptions, or other succession strategies may also benefit from exploring charitable opportunities.

2. Are there causes or organizations that helped shape your business, your employees, or your family’s values?

Business succession often prompts reflection. Many owners begin thinking not only about what they have built, but also about the communities, schools, nonprofits, and organizations that contributed to their success. This conversation can help clients identify charitable priorities that might otherwise be left unexplored. It also creates an opportunity to discuss how a business transition could become a catalyst for meaningful community impact instead of simply a financial event.

3. Would you like your children or grandchildren to be involved in charitable decisions after the transition?

For many families, succession planning is about more than transferring wealth. It is also about passing along values. A donor-advised fund at the Lenawee Community Foundation can provide a flexible way for family members to participate in charitable decisions over time. Rather than making all charitable decisions immediately after a sale, a family can establish a fund, potentially involve multiple generations in recommending grants, and create a structure that supports ongoing conversations about philanthropy and community impact.

4. Are you interested in creating a charitable fund that can support multiple organizations over time?

Many business owners want to make a significant charitable commitment during a liquidity event but are not yet ready to determine exactly which organizations should receive support. A donor-advised fund can help bridge that gap. Clients can contribute assets during a high-income year, potentially receive a charitable deduction if eligible, and then recommend grants to charitable organizations over time. This flexibility allows clients to separate the timing of a charitable contribution from the timing of individual grant decisions.

A word of caution

Some clients may initially assume that a private foundation is the best vehicle for implementing their charitable goals alongside a business exit or succession plan. However, private foundations can be subject to complex rules governing self-dealing, excess business holdings, required distributions, investments, and other activities, not to mention the unfavorable tax deductibility rules for gifts of closely held stock to a private foundation as compared with a donor-advised fund. For many business owners, a donor-advised fund can provide a simpler alternative with significantly less administrative burden and, in many cases, more favorable tax treatment.

Our team is happy to work alongside you and your clients to explore charitable planning opportunities anytime you encounter a pending business succession situation. We’re honored to be your partner in helping clients create lasting impact through charitable giving.

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Indeed, recent headlines are a reminder that initial public offerings can create significant charitable planning opportunities. For example, CNBC’s article on SpaceX millionaires and wealth management, The Wall Street Journal’s “Tech’s Next IPO Wave Promises a Charitable Windfall,” and Business Insider’s coverage of newly wealthy SpaceX employees all point to the same theme: Liquidity events can quickly turn founders, executives, early employees, and investors into high-net-worth charitable clients.

Of course, for attorneys, CPAs, and financial advisors, the key is to bring up the topic of charitable planning as early as possible—ideally before shares are sold and before clients make irrevocable tax, investment, or estate planning decisions.

You may be curious about how IPOs and charitable planning might come together for your clients and how the Lenawee Community Foundation can help! Consider three scenarios for inspiration:

Scenario 1: Founder or executive with highly appreciated stock

A founder or executive approaching an IPO may be holding shares with very low basis and significant expected appreciation. Depending on timing, restrictions, and tax rules, contributing a portion of appreciated shares to a fund at the Foundation may help your client support charitable goals while potentially reducing exposure to capital gains tax. A donor-advised fund, field-of-interest fund, or designated fund, for example, can allow the client to create a long-term charitable strategy while maintaining flexibility after the IPO dust settles.

Scenario 2: Employee with a sudden wealth event

As recent SpaceX coverage illustrates, IPOs can create thousands of newly wealthy employees who may never have needed sophisticated charitable planning before. These clients may be juggling concentrated stock positions, tax liabilities, estate planning needs, and family conversations about wealth. A donor-advised fund at the Lenawee Community Foundation can provide a simple, organized way to set aside charitable dollars in a high-income year and then recommend grants over time as the client becomes more intentional about giving. This strategy is called “bunching.”

Scenario 3: Investor or family seeking legacy and multigenerational community impact

Some clients who benefit from IPO activity may already have significant wealth and want to use the liquidity event to formalize a philanthropic legacy. These clients may be good candidates for multiple charitable funds, such as a donor-advised fund for flexible family grantmaking, a scholarship fund to support education, and an unrestricted or field-of-interest fund to address changing community needs over time. Our team can work alongside you and your client’s full advisory team to align tax planning, family goals, and charitable impact.

Finally, and importantly, what’s the common thread across all three scenarios? Timing. Once an IPO, sale, or lock-up expiration is underway, some planning options may be limited. Advisors who ask charitable questions and bring the LCF team into the conversation early can help clients turn a major financial event into meaningful support for the causes they care about.

We welcome the opportunity to discuss clients’ charitable opportunities related to IPOs, appreciated stock, business interests, other complex assets—and anything else related to philanthropy. We’re here to help. It is our honor to be your first call on matters of charitable giving.

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Charitable planning beats AI?

In the article “Why Charitable Efforts Are the Advisor’s Edge in an AI-Driven World” appearing in Financial Advisor Magazine, the author suggests that charitable planning may become an increasingly significant way for advisors to differentiate themselves as artificial intelligence automates more traditional planning and investment functions. The article argues that conversations about philanthropy, legacy, and personal values create opportunities for advisors to build deeper client relationships in ways that technology cannot easily replicate, reinforcing the advisor’s role as a trusted counselor rather than simply a technical expert.

Donor-advised funds continue to grow. . .

In Financial Advisor Magazine‘s article “Making Sense of the DAF Surge: Five Things Financial Advisors Should Know,” the author takes a look at the continued growth of donor-advised funds and the factors driving their popularity. Among the key takeaways are that donor-advised funds simplify charitable giving, allow donors to separate the timing of tax deductions from grantmaking decisions, and facilitate gifts of appreciated assets. The article also notes that many clients increasingly expect charitable planning to be integrated into broader wealth management conversations, making familiarity with donor-advised fund strategies an important competency for advisors.

. . .and that is good news for charities.

The article “DAF Fundraising Report: Nonprofit Takeaways” on Candid’s website highlights findings showing that donor-advised fund donors are often highly engaged philanthropists who give repeatedly and frequently make larger charitable gifts over time. The report encourages nonprofits to strengthen relationships with donor-advised fund donors, improve stewardship efforts, and make it easier for donors to recommend grants through their charitable giving accounts. This article is useful to advisors because it connects the dots between donors, donor-advised funds, and nonprofit organizations.

What’s the takeaway?

Remember that our team can provide a wide range of solutions for your clients’ charitable giving needs, including donor-advised funds, legacy planning, information about community needs and nonprofits, and ways to involve family members in philanthropy. We’re here to be a trusted charitable giving resource for you and your clients. 

Thank you for the opportunity to partner with you in serving our community.

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Tackling the details is important. Effective charitable planning also requires something broader, and that’s context. That’s why our team is committed to keeping you up to date on research and trends that affect philanthropy and related strategies at a macro level. Indeed, charitable planning does not occur in a vacuum; it exists within a rapidly evolving nonprofit sector and a dynamic legislative and regulatory environment.

In that spirit, we’re sharing three important trends and updates:

Philanthropy—including your clients’ gifts—supports a larger and more complex nonprofit sector than ever before.

Charitable giving is going strong! In 2025, Americans contributed an estimated $617 billion to support causes ranging from local nonprofits and places of worship to educational institutions and animal welfare organizations. This fell just short of the record set during a pandemic-related surge in philanthropy, but nevertheless, 2025 represents one of the highest levels of charitable giving ever recorded.

Consistent with that trend, in its recent report, The U.S. Tax-Exempt Sector Explained: The Growing Role of Nonprofits in America, the Bipartisan Policy Center highlights the significant growth of the nonprofit sector over the past several decades. Nonprofits today provide essential services, strengthen communities, advance education and healthcare, and address needs that government and the private sector often cannot meet on their own. This signals an important reminder to advisors that charitable planning is not simply a tax exercise. Helping your clients support charitable organizations can have meaningful implications for communities and local economies well beyond the organizations receiving the gifts.

Charitable planning tools continue to evolve.

PG Calc’s recent article, The State of Play: Navigating the Current Landscape of QCD Legislation and DAF Regulations, provides a helpful review of ongoing discussions in Washington surrounding Qualified Charitable Distributions and donor-advised funds. These tools continue to offer valuable planning opportunities for many clients, and the article serves as a reminder that charitable planning strategies are shaped by legislation, regulation, and public policy discussions. Advisors who stay informed about potential changes are often better positioned to help clients adapt as the charitable planning landscape evolves.

Clients increasingly expect charitable planning to be integrated into broader financial and estate planning conversations.

Philanthropy is becoming more sophisticated, more visible, and more interconnected with wealth transfer, retirement planning, tax planning, and legacy goals. A recent article in Financial Advisor Magazine highlighted once again the importance of philanthropy to high net worth families, which in turn means that advisors who work with these clients must be familiar with donor-advised funds and other charitable planning tools. Clients often look to their trusted advisors not only for technical expertise, but also for perspective on how charitable giving fits into their overall financial picture.

The bottom line is that context matters! By working with our team to stay informed about trends affecting nonprofits, charitable incentives, and philanthropic planning, you can better serve your charitable clients and help them achieve both their financial and estate planning goals while creating lasting community impact.

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What’s especially notable is that in recent years, Congress has expanded planning opportunities by indexing annual giving limits for inflation ($111,000 per person in 2026) and allowing certain one-time QCDs (“Legacy IRAs”) to fund charitable gift annuities and charitable remainder trusts. And now, proposed legislation known as the “Charity Parity Act” would, if enacted, extend QCD treatment beyond IRAs to include employer-sponsored retirement plans such as 401(k)s, 403(b)s, and 457(b)s. This potential change in the law would remove the extra step of rolling assets into an IRA before making a charitable gift, simplifying the process for many donors whose retirement savings remain primarily in workplace plans.

Consider a typical client scenario. Your client, age 74, is taking Required Minimum Distributions (“RMDs”) from a traditional IRA. Because the client claims the standard deduction, charitable gifts do not generate additional tax savings. By instead directing a portion of the RMD to a qualified charity as a QCD, the client can satisfy part or all of the RMD obligation without increasing taxable income. In many cases, this can also help reduce Medicare premium surcharges and lessen the taxation of Social Security benefits, creating planning advantages beyond the charitable deduction itself.

Here are three examples of how the Lenawee Community Foundation can help your client achieve charitable goals through QCDs:

1. A client directs a QCD from an IRA to Lenawee’s Health, Happiness, and Hope Fund at the Lenawee Community Foundation to support broad community needs. The client satisfies part or all of the client’s annual RMD requirements while supporting flexible grantmaking that addresses changing priorities in the region.
2. A client uses a QCD to contribute to a field-of-interest fund at the Lenawee Community Foundation focused on causes such as education, healthcare, the arts, or environmental conservation. This allows the client to support a specific area of passion while relying on the Lenawee Community Foundation’s expertise to identify effective nonprofit organizations over time.
3. A client makes a QCD to an existing designated fund or scholarship fund held at the Lenawee Community Foundation. For example, the client may support a favorite local nonprofit through a designated fund or help students pursue higher education through an endowed scholarship fund, all while reducing taxable income through a QCD.

Keep in mind that charitable giving with IRAs goes beyond current gifts to charity! As part of advising clients about their IRAs, be sure to check their beneficiary designations. Not only is it tax advantageous for a client to name a fund at the Lenawee Community Foundation or other public charity as beneficiary of an IRA, but it’s also a best practice to avoid problems in the future. (Retirement plan beneficiary designations continue to show up in cautionary tales!)

For attorneys, CPAs, and financial advisors, developments related to QCDs are worth watching closely. QCDs increasingly serve as a natural connector among retirement planning, philanthropy, and legacy conversations. Just as importantly, QCD discussions often open the door to broader planning opportunities, helping clients align financial goals with the causes and communities they care about most. As always, please reach out to the Lenawee Community Foundation anytime! 

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Here are three things to know:

—Mainstream media is picking up the pace in its coverage of charitable planning techniques. For example, the Wall Street Journal recently published an article about donor-advised funds as a tool for tax savings and community impact. Many clients may not realize that the Lenawee Community Foundation offers donor-advised funds, along with other options for structuring a charitable giving plan to support their favorite causes and address critical community issues. Be sure to reach out to the Lenawee Community Foundation whenever a client asks you about setting up a donor-advised fund. 

—Thoughtful planning is especially important in light of the new floor on itemized charitable deductions. Starting in 2026, to be eligible for a deduction, a client’s qualified deductions must exceed 0.5% of adjusted gross income, essentially raising the threshold at which charitable giving produces a tax benefit. This could make it advantageous for some of your clients to “bunch” charitable contributions through a donor-advised fund, allowing the client to front-load donations into a single tax year to cross the threshold. 

—At the same time, under a “cap” provision in the new law, if a client is in the 37% federal income tax bracket, itemized charitable deductions are now capped at the 35% tax rate. In simplified terms, depending on other factors, this means that if a client donates $10,000, the tax break would be $3,500 instead of $3,700. In short, the floor and the cap add extra complexity to helping clients plan their charitable contributions. 

—The new tax laws have changed the landscape for not only your clients who itemize deductions but also for those who do not itemize. Non-itemizers are now eligible for an “above the line” deduction of $1,000 for single filers and $2,000 for joint filers. Be aware, however, that the new deduction for non-itemizers does not apply to noncash gifts or gifts to donor-advised funds. Because both noncash gifts and gifts to donor-advised funds are important tax planning tools for many clients, this limitation is worth noting in your discussions. 

—Finally, remember that donating appreciated stock held for more than one year is usually more tax-efficient than writing a check. That’s because it allows your client to avoid capital gains tax on the appreciation. What’s more, clients who itemize deductions will be eligible to claim a tax deduction for the full fair market value. 

Please reach out to the Lenawee Community Foundation anytime. We know the new tax laws add a lot to your plate, and we are always happy to point you in the right direction as you conduct research and offer counsel to your clients. And remember, you don’t have to jump headfirst into the complexity during your client discussions. Even talking about philanthropy in the simplest terms can help strengthen your client relationships and grow your practice.

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