Charitable giving in a bear market: A checklist

As you work with charitable clients during periods of market uncertainty, you may notice that even the possibility of a downturn can influence decision-making. Conversations often shift from long-term projections to shorter-term concerns, and clients may hesitate when it comes to charitable giving. As a trusted advisor, you can help clients stay focused and thoughtful by reinforcing a few key principles and identifying planning opportunities that remain effective in any market environment.

Here is a checklist to guide your conversations.

Acknowledge the emotional side of market volatility.

Even financially secure clients can feel uneasy when markets fluctuate. Trends continue to show that financial uncertainty affects emotional well-being, and those feelings can influence decision-making. Creating space for clients to express concerns is an important first step in helping them move forward with clarity and confidence.

Remind clients that not all assets are affected equally.

A down market does not mean all holdings have declined. Many clients still hold highly appreciated assets, especially positions accumulated over long periods. This creates an opportunity to revisit one of the most effective charitable giving strategies: contributing appreciated stock.

Highlight the benefits of giving appreciated assets.

Gifts of long-term appreciated securities to a fund at the community foundation can allow clients to avoid capital gains tax while supporting the causes they care about. This strategy can remain effective regardless of market conditions and can be especially meaningful when clients are looking for tax-efficient ways to give.

Encourage flexibility through donor-advised funds.

Establishing or contributing to a donor-advised fund at the community foundation allows clients to separate the timing of the tax deduction from the timing of grantmaking. This can be particularly appealing during uncertain periods, giving clients the ability to make a gift now and recommend grants over time as they gain more clarity.

Discuss increased community needs.

Economic strain often increases demand for nonprofit services, particularly for households already feeling the effects of inflation and rising costs. The community foundation can provide insight into the most pressing needs in our region and help your clients direct support where it can make the greatest difference.

Don’t overlook Qualified Charitable Distributions.

For clients age 70 ½ and older, Qualified Charitable Distributions remain a powerful tool. QCDs can be used to satisfy required minimum distributions while potentially avoiding income tax on those amounts, making them an attractive option regardless of market performance. The community foundation can help ensure these gifts are directed to eligible funds aligned with your client’s charitable priorities.

On another positive note, a bipartisan group of U.S. Senators has introduced the IRA Charitable Rollover Facilitation and Enhancement Act to expand charitable giving options for older Americans. If enacted, the bill would allow Qualified Charitable Distributions (QCDs) from IRAs to be directed to donor-advised funds, removing a current restriction that limits flexibility for donors who want to support multiple charities through a single giving vehicle. 

Reinforce a long-term perspective.

Market cycles are a natural part of investing, and many philanthropic clients are motivated by long-term impact rather than short-term conditions. Encouraging clients to stay focused on their values and goals can help maintain consistency in their giving, even when headlines are unsettling.

Lean on the Community Foundation for Greater Atlanta.

Our team is here to help you navigate these conversations. We can provide up-to-date information on community needs, offer ideas for structuring gifts, and work with you and your clients to develop flexible, tax-efficient charitable strategies. Whether your client is ready to act now or simply needs reassurance, we are honored to support your efforts.

Please reach out anytime. We are here to help you and your clients make a meaningful difference in every type of market environment.