Turning taxes into local impact
Arizona’s charitable tax credits allow residents to direct a portion of their state income tax to qualifying nonprofits that serve neighbors in need. Instead of simply paying that amount to the state, families can support organizations they care about and receive a dollar-for-dollar credit against their Arizona tax bill, up to the annual limits for each credit type.
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For example, gifts to Qualifying Charitable Organizations and Qualifying Foster Care Charitable Organizations can support safety net services, healthcare, and family support programs right here in Arizona. When donors understand that these credits reduce the tax they owe not just their taxable income giving can feel less like an extra expense and more like a smart reallocation of dollars they must pay anyway.
Why timing and ‘bundling‘”‘ matter
Federal tax rules have made it harder for many households to benefit from itemizing charitable deductions every year, but that does not mean those tax benefits are gone. By “bundling” two or three years’ worth of planned contributions into a single year, some families can push their itemized deductions above the standard deduction and capture a larger tax benefit.
In practical terms, a family might decide that every third year is their “big giving year,” when they make a larger gift to a favorite hospital foundation, food bank, or children’s charity. In the in between years, they take the standard deduction but still feel connected to their giving because those larger gifts are supporting multiyear work like expanded pediatric services or family support programs at places such as Phoenix Children’s.
Non cash ways to give more
Cash is not the only, or even the most efficient, way to give. Donating appreciated stock or mutual fund shares that have grown in value can allow donors to avoid capital gains tax and potentially deduct the full fair market value if they itemize. That means more of the asset goes to charity and less to taxes, especially powerful for those who have held investments for many years.
Donor advised funds offer another flexible tool: families can make one larger, potentially deductible gift in a high income year, receive the tax benefit then, and recommend grants over time to organizations serving Arizona children and families. Retirees may also be able to make qualified charitable distributions directly from IRAs to support nonprofits; while Phoenix Children’s is one example of a hospital that can benefit from these gifts, many Arizona charities are equipped to receive them.
Why year end giving still counts
For nonprofits, the final weeks of the year are not just busy they are often decisive. Year end gifts can be the difference between maintaining critical services and scaling back. Hospitals caring for children, shelters, youth programs, and family support organizations rely on this season to fund staffing, equipment, and wraparound services that families count on all year.
When donors combine year end timing with tools like Arizona’s tax credits, appreciated assets, or bundled giving, they help organizations plan confidently instead of worrying whether they will meet budget. That stability matters when you are caring for a child with a complex medical condition or supporting a family through crisis situations hospitals like Phoenix Children’s see every day.
Starting a family giving tradition
The most powerful part of tax smart giving is not the numbers it is the habit. Families can start small: choose one or two causes, talk together about why they matter, and set a simple goal each year tied to their tax picture. Involving kids letting them help choose a charity, write a note to accompany a gift, or tour a hospital or youth program turns tax planning into a shared story about values.
Many Arizona households will never think of themselves as “philanthropists,” yet they quietly transform lives through thoughtful, steady generosity. By learning how credits, deductions, and non cash gifts work, families can stretch each dollar a little further supporting institutions like Phoenix Children’s and many other local nonprofits that stand beside Arizona’s children and families when they need it most.
Author: Nicola Lawrence is vice president of individual giving at Phoenix Children’s Foundation.
