Giving to Bay Area Churches and Ministries, Tax-Aware

How do you give to your church in a tax-aware way?

Start with the basics: give to a qualified organization, keep the right records, and match the type of gift to your situation. A tax-aware plan changes how you give. It does not need to change why you give.

This post is general education, not tax advice. Your CPA knows your return. We do not name or rank any church or ministry here. Choose where to give by prayer and by what you know of the work.

Do churches qualify for a tax deduction?

In general, yes. IRS Publication 526 lists “churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations” among its examples of qualified organizations. You usually claim the deduction by itemizing. Ask your CPA how current law applies to your year.

The IRS also sets limits. Your deduction for charitable contributions “generally can’t be more than 60% of your AGI,” though 20%, 30% or 50% limits may apply in some cases. AGI means adjusted gross income.

Records matter. For a gift of $250 or more, the IRS says you can claim a deduction only with a contemporaneous written acknowledgment from the organization. Each gift is judged on its own. The IRS example: if you gave your church $25 each week, the weekly payments “don’t have to be combined.”

What are the main ways to give, and how do they differ?

Four tools cover most plans. Each has its own rules.

Read more in our guides to qualified charitable distributions, donor-advised funds, and giving appreciated stock and bunching.

The IRS cap for a qualified charitable distribution is indexed, so check the current figure. Our post on QCD or DAF giving from retirement savings compares the first and last tools. Our post on RMD age and your giving covers how an IRA gift fits with required withdrawals.

When might appreciated stock make sense?

If you hold stock that has gained value, giving shares instead of cash may be worth a look. The IRS has a rule for “qualified appreciated stock”: stock that is capital gain property and has readily available market prices. Details such as holding period and AGI limits apply.

Neither choice is right for everyone. Our post on gifting appreciated stock or selling first lays out the trade-offs. The glossary entries on donating appreciated stock and bunching charitable deductions explain two ideas that work together.

What is a donor-advised fund, and what is one Bay Area example?

A donor-advised fund (DAF) is an account for charitable gifts. The IRS describes it as “a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund.” You give to the fund, and you recommend grants to charities over time.

Sponsors differ on minimums and rules. As one local example, the Silicon Valley Community Foundation lists this on its own site: “Open a donor advised fund with a contribution of $5,000 or more.” We share it as an example of what a local sponsor publishes, not as a recommendation. Compare terms before you choose. See our glossary entry on donor-advised fund.

How should faith shape the plan?

Scripture puts the heart of the giver first. Second Corinthians 9:7 teaches that giving should be willing, not forced. Malachi 3:10 speaks of tithes brought to the temple storehouse. Christians hold different views on whether to tithe on gross or net income and whether the tithe is required. We do not rule on that here. Our post on tithing on gross or net describes the main views.

Tax planning should serve your giving. It should not decide it. Many families find it helps to set a yearly giving goal first. Then they ask which tool gets that gift to the church in the best way.

How does the Seek First Foundation fit?

The Seek First Foundation is the firm’s ministry arm, and its page describes “professionally led, judgment-free workshops and resources for Bay Area believers.” Learn more on the Foundation page. The firm also describes how it gives on the giving page.

What can you do before year-end?

1. Add up what you gave this year and what you plan to give.
2. Gather written acknowledgments for each gift of $250 or more.
3. Ask your CPA whether you will itemize this year.
4. If you are 70½ or older, ask your IRA custodian about a qualified charitable distribution.
5. If you hold appreciated stock, ask your CPA about giving shares.
6. Write your giving goal for next year.

Next step

Seek First’s charitable giving strategy work helps families plan what to give and how. Book a free 20-minute call at /contact or call (866) 398-4044.