And what it unlocks when you do
The Law That Changed Philanthropy
In 1917, Senator Henry Hollis of New Hampshire made an argument that would shape American philanthropy for the next century. His observation was simple and direct: people give last. Giving is the final line item in the household budget — the thing that gets cut first when income drops, taxes rise, or uncertainty sets in.
His solution was a legal incentive to flip the sequence. Reward donors for giving first, before the tax event, and let the tax benefit underwrite the generosity. The charitable deduction was born.
That law has been in the U.S. tax code for over 100 years. Most donors have never been shown how to use it.
The Sequence Problem
The financial sequence most donors follow, without ever consciously choosing it, looks like this:
1. Earn income
2. Pay taxes — federal, state, payroll
3. Cover living expenses, healthcare, education
4. Fund retirement and investments
5. Donate — whatever is left, whenever it feels right
The alternative sequence — the one the tax code was designed to incentivize:
1. Earn income
2. Structure a charitable contribution (before the tax event)
3. Receive an immediate tax deduction
4. Pay significantly reduced taxes
5. Cover expenses and fund retirement with more capital remaining
The difference between these two sequences, for a donor earning $300,000 per year, can be $15,000 to $40,000 annually in tax savings — redirected to your mission instead of the IRS.
What the Tax Code Actually Allows
Cash donations to public nonprofits — deductible up to 60% of adjusted gross income (AGI).
Appreciated asset donations — when a donor gives stock, real estate, or business interests that have increased in value, they eliminate the capital gains tax entirely and receive a deduction for the full fair market value.
Donor-Advised Funds — a donor contributes assets to a DAF, takes an immediate deduction, and distributes grants over time.
Private Foundations — a donor establishes a dedicated giving entity, takes a deduction of up to 30% of AGI, and retains full control over how the funds are deployed. This is our specialty.
Charitable Remainder Trusts — a donor transfers appreciated assets to a trust, receives a lifetime income stream plus an immediate tax deduction, and names your organization as the remainder beneficiary.
Why Your Organization Needs to Have This Conversation
The organization that teaches a donor about these tools becomes the organization that benefits from them. When a donor learns about a Donor-Advised Fund from your development director, they are far more likely to name your organization as a primary beneficiary.
This is not about asking for more. It is about showing donors what is already possible — and positioning your organization at the center of the conversation.
Sid Peddinti, Esq. is the founder of the 10X The Donation™.
Schedule a confidential strategy session and we’ll assess your donor base, identify the specific opportunity, and show you exactly what the path forward looks like.
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