Arizonans are in the middle of the pack when it comes to opening up their wallets to charities this holiday season.

According to a November study conducted by the Boston College Center on Wealth and Philanthropy, Arizona ranks 38^th of 50 states in per capita charitable giving.

“So, many Arizonans have the means to be more generous to charitable causes and create win-win situations for both non-profit organizations and their own tax liability situations,” says Ben L. Schaub, CEO of The American Foundation, a 501(c) (3) public charity.

Schaub thinks people do not realize that even a little bit can go a long way for the donor when it comes time to file their tax return.

“For less than the cost of a couple of mortgage payments a donor can create a family foundation, or set up a donor-advised fund,” Schaub says. “These strategies can significantly reduce the donor’s tax liability.”

The study conducted this fall by the Center on Wealth and Philanthropy reveals that Arizonans contribute slightly less than two percent of their household income to charity.

“Warren Buffet’s charitable gift of billions made national headlines this year, but people can take advantage of the many financial planning options associated with charitable giving, even with limited funds,” Schaub says.

Schaub suggests several options to help families get the most out of their charitable donations:

Donor-advised Family Foundation Account – Started with as little as $5,000, donors have the control of recommending the charities to which they would like the grants to be given.  In addition, donors are able to eliminate or reduce estate and gift tax, generate greater income tax deductions and can eliminate capital gains tax on the sale of appreciated stock and real estate.

Charitable Remainder Trust – Under the family foundation format, this trust will create income for the donors for the remainder of their lives with the balance transferred to their own family foundation upon their death that will continue to give in perpetuity.  This creates a family legacy as the foundation continues to donate after the benefactor has passed.

IRA Charitable Rollovers - Available only in 2006 and ‘07, IRA owners ages 70½ and older can directly roll over up to $100,000 per year from an IRA into public charities without having to declare it as income.

“Supreme Court Justice Louis Brandeis once said, ‘For my tax evasion I should be punished; for my tax avoidance, I should be commended,’” Schaub says.  “Now more than ever, people should look to charitable giving as a prudent way to lower, and in some cases, completely avoid taxes.”

Schaub recommends that a call to your tax advisor before the end of the year to discuss if these strategies could be a worthwhile investment of your time.