With end-of-year planning in full swing, it’s time for a thoughtful giving strategy

In a study of high-net-worth investors conducted by Bank of America and Indiana University, the vast majority of respondents — more than 88 percent — donated to charity within the past year. But those gifts were not just altruistic. Wealthy investors are motivated to engage in philanthropic activity for a variety of reasons, including to advance their overall financial goals and legacy planning.

Too few financial advisors seem to grasp that reality. A separate Bank of America survey found that a stunning 47% of high-net-worth individuals reported feeling dissatisfied with how their advisors talk about charitable giving. Not our clients at Astra.

We’re laser-focused on your family’s goals, first, before suggesting the right giving vehicles to make sure you get there. We treat your legacy with the same care as your capital.

How charitable gifts can create meaningful impact in the world and work smarter for clients

Some advisors wrongly assume that high-net-worth clients only care about maximizing how much they can save on their taxes. In fact, research suggests that wealthy individuals are rarely motivated by the short-term gains of a tax writeoff.

They do, however, care about the intersection of those donations and their other generational planning.

With the right strategy, charitable gifts can create meaningful impact in the world and work smarter behind the scenes for clients. Here are a few charitable vehicles that savvy advisors are increasingly using to help clients achieve both:

Foundations:
If you want to take a hands-on approach to philanthropy, a private foundation offers a powerful avenue. Established and funded by you, your family, or your business, a foundation can become the engine for your long-term charitable vision. A board — often family members — oversees investments, governance, and grantmaking, allowing you to build a lasting charitable footprint with your own values at the center.

Donor-Advised Funds (DAFs):
Think of a DAF as your own charitable investment account, minus the administrative headaches. You contribute cash, securities, or other assets, and you decide how the funds are invested and which nonprofits receive grants — giving you flexibility and control without the heavy lift of running a foundation. DAFs are increasingly popular, too, because donors receive an immediate tax deduction on their contributions, even if the funds aren’t distributed for some time.

Charitable Remainder Trusts (CRTs):
CRTs are a great choice if you want to support a cause and provide income for loved ones. You place assets into a trust that pays an income stream to you or your beneficiaries for a set period. When the term ends, whatever remains goes to your chosen charity. It’s a blend of generosity, legacy, and smart planning.

Sure, you can still write a generous end-of-year check — and plenty of people do. But today’s high-net-worth donors have far more creative and strategic tools at their disposal, if they have the right financial advisor to guide them.

Tools to optimize your strategy

Every investor has different needs for their approach to charitable giving. It’s important to weigh the potential benefits and tradeoffs of various strategies prior to committing to a plan. Those considerations include: 

✔️Extended giving: Think of this as a big, upfront financial investment that allows you to give gradually down the road — such as through a DAF. By “bunching” several years’ worth of planned charitable donations into a single tax year, you may unlock a larger upfront deduction.

✔️Tax gain harvesting: By donating highly appreciated assets (say, into a DAF), you can support causes you care about and sidestep capital gains taxes you’d otherwise owe. It’s a win for the charity and a win for portfolio efficiency.

✔️Qualified Charitable Distributions (QCDs): For investors 70½ or older, QCDs can be a smart way to align generosity with smart tax planning. They allow you to donate up to $100,000 per year directly from your IRA to a qualified charity. QCDs don’t count as charitable deductions. Instead, they simply redirect dollars that would have shown up in your taxable income.

The Astra approach

We believe in creating custom solutions that represent the unique values of the families we work with. We’re not here to impose templates. We’re here to help you build a lasting legacy — and provide you all the tools to make your goals a reality.