Charitable giving is a hot topic among high-net-worth couples as Congress and the White House consider tax reform, said Adrienne Penta, an estate lawyer and executive director of the Brown Brothers Harriman Center for Women & Wealth.
During the campaign, President Donald Trump proposed capping deductions, including those for charitable giving, but backed off that idea in his latest tax plan.
Under current tax law, you can deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you can deduct up to 50 percent of your adjusted gross income in charitable contributions, but deductions can be limited to 20 percent to 30 percent of your income in some cases.
Estate planners are taking a wait-and-see approach to how tax reform may change charitable giving, Penta said.
Meanwhile, many donors are accelerating their charitable deductions before they can potentially be limited. For example, contributions to the National Philanthropic Trust, a large donor-advised fund, rose to $1.7 billion last year, up 72 percent from 2015. (A donor-advised fund lets you take a tax deduction in the year in which you made the contribution, then pay out grants over time to qualified charities you pick while your money is invested.)
Whatever happens with tax reform, gender plays a big role in couples’ giving strategy. “In many of situations I work with, women are often driving charity-giving conversation and creating a charitable mission in their families,” Penta said.