Charitable Giving for Physicians: Tax-Smart Wealth Strategies
As we enter the second half of the year we’ll have the opportunity to focus on the causes and communities that matter most. Whether it’s supporting local food banks, community foundations, or religious organizations, your generosity can leave a lasting impact. Morgan Housel has said, “of all the ways to use money, giving may be the most personally rewarding and socially impactful. It turns success into significance.”
I believe there is a deep, inherent desire in each of us to lift others. For example, when high winds fueled a devastating wildfire in the Lahaina area of Maui in August 2023, people from 47 countries responded with compassion. As of October 2024, the Maui Strong Fund has received over $201 million in donations—evidence of the power of collective giving. You may have been one of those generous donors.
Yet even in the world’s most prosperous country, 44 million people—including 13 million children—experience food insecurity each year. In Utah, during 2024, more than 61 million pounds of food—equating to over 50.8 million meals—were distributed through the Utah Food Bank. You may have helped feed those families.
If you are charitably inclined, there are several ways to give. Below are three strategic and often underutilized charitable tools that can help you give effectively while also optimizing your tax situation:
Donations In Kind
Donating appreciated assets—such as stocks, bonds, mutual funds, or ETFs—can be a smart way to give. When you donate investments held longer than a year, you may avoid capital gains tax while claiming a charitable deduction for the asset’s fair market value. It’s a win-win: you support the cause and improve your tax efficiency.
Donor Advised Funds (DAFs)
DAFs offer a flexible, tax-smart approach to charitable giving. You can contribute to a DAF in 2025 for an immediate tax deduction and distribute grants to charities over time. This approach allows you to grow your contributions tax-free while thoughtfully deciding when and where to give. DAFs are particularly helpful in high-income years or when selling a business or investment.
Qualified Charitable Distributions (QCDs)
If you're age 70½ or older, a QCD is a powerful way to donate directly from your IRA to a qualified charity. In 2025, you can transfer up to $108,000 tax-free. QCDs count toward your Required Minimum Distribution (RMD) and reduce your taxable income—an especially strategic option if you take the standard deduction or don’t need the RMD for living expenses.
As year-end approaches, proactive planning around charitable giving can help you support causes you care about. There are effective ways to give. Whether you’re making a one-time gift or building a long-term giving strategy, your physician focused wealth advisors at Physician Wealth Advisors (PWA) are here to help. PWA is a wholly owned subsidiary of the Utah Medical Association (UMA). Reach out today to discuss giving and other relevant financial topics PWA. You can schedule a one on one consultation at - 801-747-0800.