Maximizing Personal Benefit of Charity

I’m coming up on my end of year donations, and I want to make them as efficient as possible. This includes getting the biggest financial benefit for myself, whether it’s maximizing taxes saved or bonus money earned. I see two main ways to get added benefit from my donations. Anybody know of other options or see any flaw in my reasoning?

Option 1: Credit card bonuses

I could put donations on a new credit card and use that to hit a minimum spend requirement. The best bonuses come in when you spend more money (typically $3,000 in 90 days). I don’t spend nearly enough on my own to hit that. I don’t have the energy to manufacture spend with gift cards or wire transfers either. Throwing my donations on a new card would help get me the $3,000 level bonuses.

Caveat: This isn’t the only way to hit the spend. I could pay rent with a service that charges a 2.5% fee, and once a year, I could pay upfront for a gym membership.

Option 2: Donate stock

Another efficient way of donating is giving stock that has increased in value directly to charity. This way you don’t need to pay capital gains tax before handing it over.

One trick I learned while researching: donate appreciated stock, then buy the same amount so you reset the cost basis.

Caveat: This provides no personal benefit if your capital gains tax would otherwise be zero. I likely will be in this category as long as I’m FIRE’d.

Winner: It Depends

For 2019, when my LTCG tax will be zero, it makes more sense to use donations to hit a credit card spend and avoid the fees for paying rent with a card.

If I go back to work in 2020 and earn enough to push me out of the 0% bracket on LTCG, it might make stock donation a better deal. That would depend on how much the stock has appreciated, how much it would save on taxes, and how big of a cc bonus it could earn.

Or, would a bonus still be better in a working year? Nobody’s making me sell my appreciated stock in 2020. If I’m working, I can cashflow my expenses easily. Then I can wait until 2021 to sell those shares at 0% tax.


I’d go for the credit card. Love to hear what you come up with if you do. I’m shopping for one now for property taxes.


From what I can tell, the bigger benefit to you comes from using a credit card.

You didn’t ask this, but you did mention “efficient” giving, so I will add: Be aware that using a credit card is almost always worse for the recipient charity, unless you choose to also gift to cover fees associated with their credit card processing. Working for non-profits, I’ve researched options for how to take credit card donations and minimize fees, and there is no perfect solution for this. Third-party credit card processors get their cut, somehow. Charities have realized that making credit card donations possible can increase how much people gift (especially with “Evergreen” donations that are essentially toggled on like subscriptions). A lot of people don’t realize that using the credit card does increase the administrative/fee cost, though.