BOSTON (Reuters) - Four years after the credit crunch hit, Denise Koenig and her husband, Robert, finally feel comfortable increasing their year-end charitable giving past where it was in 2007. The Boston couple have given away about $4,000 every year for the past five years but realized that they could easily afford to double that amount. "Our jobs are safe, real estate is doing better, the stock market is up," says Denise Koenig, a 43-year-old management consultant. "We can do more."
But Koenig doesn't plan to just start flinging money at every nonprofit that sends her address labels or robocalls her around the holidays.
"Our gifts also feel more precious now," says Koenig. "We want to be smarter with them."
The holidays often find families asking how and where their charitable giving can have the most impact, but this year those discussions may have more urgency: There's the potential for tax reforms that could affect the treatment of charitable donations, as well as the large need left in the wake of Superstorm Sandy.
Here are some of the latest strategies that can help maximize the impact of donations.
SET PRIORITIES, MAKE A BUDGET
American households donate about 5 percent of their incomes every year, according to the Chronicle of Philanthropy, which puts median contributions at $2,564.
Yet, for what is perhaps one of their biggest investments each year, few families plan ahead about where and how they'll give - they end up donating episodically to whichever group a friend or coworker pitches.
"Most of my clients are surprised by how much of their giving goes to friends' and family fundraising," says Eric Kessler, managing director of Arabella Advisors, a firm which helps families and foundations manage their philanthropy.
Kessler instead tells families to establish priorities and make a giving plan upfront and then stick with the plan. "You decide, for instance, 10 percent will go to friends' and family (causes), but 90 percent should be reserved for what we're really passionate about," he says.
GIVE WITH A GROUP
Just as it's easier to exercise when your friends join in, it's easier to have a charitable impact when you plan your giving with a larger group. Popular for more than a decade, giving circles are formed when groups of donors pool their funds and their ideas to support either particular causes or organizations.
"Your $100 donation can be compounded by 10 or 100," says Lisa Philp, vice president for strategic philanthropy at the Foundation Center, a New York City clearinghouse for philanthropic research.
Giving circle members tend to give more, volunteer more and be more strategic about their gifts, according to a study from researchers led by the University of Nebraska at Omaha. They are more likely to make multi-year gifts and monitor the performance of the organizations they help.
Philp, for example, is a member of a giving circle focused on Asian American female artists. "You're considered a member if you gave as little as a dollar," Philp says. "But the process provides a more formal structure around giving as well as knowledge-sharing."
PLAY FOR THE MATCH
Another way to boost the power of a contribution is to ask your boss for help: Many employers will match charitable gifts; check to make sure your intended charity will meet your company's giving guidelines.
You can also reach out to your favorite charity to see if they can find matching funds for you. "Nonprofits should want to work with you to find the maximum amount of funds available," says Lisa Dietlin, a Chicago philanthropy consultant.
SHARE YOUR SHARES
When Ann Neumann and her wife met with their financial adviser in August, they were surprised by his advice. "He said, ‘Don't write a check this year. Let's look at your stock portfolio,'" says Neumann, a psychiatrist in Bethesda, Maryland.
That's because the tax system rewards donors who give appreciated securities instead of cash. Those donors escape taxes on the capital gains earned by their investment and get a full charitable deduction for the value of the securities they turn over.
For example, if you bought $10,000 worth of shares in October 2011 and today they are valued at $20,000, you did very well. If you sold them to make a donation, you'd pay $1,500 in capital gains taxes on the $10,000, leaving $18,500 for the charity. After taking your charitable deduction on that amount, you'd have spent $16,875 to deliver $18,500 to the charity.
If you hand over $20,000 in shares instead, the charity can sell them without paying any taxes, because it is a nonprofit. You'll get a full $20,000 deduction, and that will save you $5,000 on your taxes. It would cost you less - $15,000 - to give your charity more, the full $20,000.
OPEN A DONOR-ADVISED FUND
The Koenigs decided to go big this year and open their own family charitable fund with the $50,000 bonus check Denise is expecting in December. The easiest way to do that is by setting up a donor-advised fund.
These family funds are sort of like mini-foundations; they are typically sub-accounts of community foundations (locally focused charities that raise money for the benefits of a specific geographic area) or large charitable pools spun off by mutual fund companies or brokers. Families can name them and set up their own giving guidelines.
These vehicles allow donors to make a contribution this year and be eligible for an immediate tax deduction, but then release funds on their own timetable.
"Donor-advised funds aren't simply for the super-wealthy," says Wistar Morris, a principal at Signature, a wealth management firm in Norfolk, Virginia. "They make sense for someone giving as little at $5,000."
To establish a donor-advised fund, find your local community foundation at the website of the Council on Foundations (www.cof.org) and see if it will set up a fund for you. Compare what it offers with the major funds associated with big investment companies: Fidelity Charitable (www.charitablegift.org); The T. Rowe Price program for Charitable Giving (http://program for giving.org); the Charles Schwab Corporation's Schwab Charitable Fund (schwabcharitable.org); and the Vanguard Charitable Endowment Program (www.vanguardcharitable.org).
Donor-advised funds can be set up in a day and don't require prior approval from the Internal Revenue Service, says Eileen Heisman, president of the National Philanthropic Trust, which manages donor-advised funds.
Denise Koenig is still deciding where to house her family's donor-advised fund, but wants the proceeds to go eventually to local libraries and, she laughs, "maybe a little financial literacy, too."
(The author is a Reuters contributor. The opinions expressed are her own. This is part of a six-story package on charitable giving.)