Also if you live in the US & want to decrease the cost of your donations by like 10% and/or give like 10% more, one option is to use a 100% equities investment account (like all S&P500 or something) to save all the money you would donate each year until you can make a big enough stock-transfer donation to an effective organization to reduce your tax bill.
100% Equities
In standard personal finance, you lower risk as you age to protect your retirement security. In “Investing to Give,” the philosophy is different.
Because large charities and global problems are less vulnerable to market volatility than a single individual, many EAs advocate for a risk-neutral or high-equity portfolio.
* The Logic: If the market crashes 20%, a large charity (like the Against Malaria Foundation) will not “go bust” the way an individual retiree might. They can wait for the market to recover.
* The Portfolio: This usually points toward 100% broad-market equities (like a Total World Stock Market Index Fund). You accept higher volatility for higher expected long-term returns, maximizing the final donation amount.
Direct Stock Transfers
Direct stock transfers avoid capital gains taxes on your stocks that increased in value.
Standard Investment Account Batched Donations
Because I live in a US state with no state income tax to deduct, my “baseline” itemized deductions are likely very low (perhaps just mortgage interest, if I have any). This makes the “Standard Deduction hurdle” much harder to clear, meaning my smaller annual donations often yield zero tax benefit.
Here is how to solve that with “Batching”.
Part 1: The “Batching” Strategy
The Goal: Stop giving small amounts every year where you get no tax credit. Instead, save up and give a massive amount in one single year to crush the Standard Deduction, then give nothing (on paper) for the next few years.
The Math (2025/2026 Projections):
* Single Standard Deduction: ~$15,000
* Married Standard Deduction: ~$30,000
Scenario: Let’s assume you are Single and want to donate $5,000/year.
* The “Standard” Way: You donate $5k in 2025, 2026, 2027, & 2028.
* Total Donated: $20,000
* Total Tax Deduction: $0 (because $5k is less than the $15k standard deduction; you just take the standard deduction every year anyway).
* The “Bunching” Way: You save that money in an investment account for 4 years, then donate all $20,000+appreciation in Year 4.
* Year 1-3: You take the Standard Deduction.
Year 4: You donate $20,000+ through direct stock transfers. Combined with other deductions (e.g., sales tax, mortgage interest), you might reach $25,000+ in itemized deductions. For a single tax filer making $100,000 a year this would mean saving an extra $2000+ in taxes**.
Donation Deduction Limits
The amount you can deduct in a single year is subject to limitations based on your Adjusted Gross Income (AGI).
• For gifts of appreciated long-term capital gain property (like stock) to a public charity (including Donor Advised Funds), the deduction is generally limited to 30% of your AGI (Income).
• Any amount exceeding this limit can usually be carried forward for up to five additional tax years.
Also if you live in the US & want to decrease the cost of your donations by like 10% and/or give like 10% more, one option is to use a 100% equities investment account (like all S&P500 or something) to save all the money you would donate each year until you can make a big enough stock-transfer donation to an effective organization to reduce your tax bill.
100% Equities
In standard personal finance, you lower risk as you age to protect your retirement security. In “Investing to Give,” the philosophy is different.
Because large charities and global problems are less vulnerable to market volatility than a single individual, many EAs advocate for a risk-neutral or high-equity portfolio.
* The Logic: If the market crashes 20%, a large charity (like the Against Malaria Foundation) will not “go bust” the way an individual retiree might. They can wait for the market to recover.
* The Portfolio: This usually points toward 100% broad-market equities (like a Total World Stock Market Index Fund). You accept higher volatility for higher expected long-term returns, maximizing the final donation amount.
Direct Stock Transfers
Direct stock transfers avoid capital gains taxes on your stocks that increased in value.
Standard Investment Account Batched Donations
Because I live in a US state with no state income tax to deduct, my “baseline” itemized deductions are likely very low (perhaps just mortgage interest, if I have any). This makes the “Standard Deduction hurdle” much harder to clear, meaning my smaller annual donations often yield zero tax benefit.
Here is how to solve that with “Batching”.
Part 1: The “Batching” Strategy
The Goal: Stop giving small amounts every year where you get no tax credit. Instead, save up and give a massive amount in one single year to crush the Standard Deduction, then give nothing (on paper) for the next few years.
The Math (2025/2026 Projections):
* Single Standard Deduction: ~$15,000
* Married Standard Deduction: ~$30,000
Scenario: Let’s assume you are Single and want to donate $5,000/year.
* The “Standard” Way: You donate $5k in 2025, 2026, 2027, & 2028.
* Total Donated: $20,000
* Total Tax Deduction: $0 (because $5k is less than the $15k standard deduction; you just take the standard deduction every year anyway).
* The “Bunching” Way: You save that money in an investment account for 4 years, then donate all $20,000+appreciation in Year 4.
* Year 1-3: You take the Standard Deduction.
Year 4: You donate $20,000+ through direct stock transfers. Combined with other deductions (e.g., sales tax, mortgage interest), you might reach $25,000+ in itemized deductions. For a single tax filer making $100,000 a year this would mean saving an extra $2000+ in taxes**.
Donation Deduction Limits
The amount you can deduct in a single year is subject to limitations based on your Adjusted Gross Income (AGI).
• For gifts of appreciated long-term capital gain property (like stock) to a public charity (including Donor Advised Funds), the deduction is generally limited to 30% of your AGI (Income).
• Any amount exceeding this limit can usually be carried forward for up to five additional tax years.
Here’s an even better write-up of this & similar ideas
https://michaelgris.com/posts/charity-tax/