Smart Giving: Tax-Efficient Charity for Microsoft Employees
While writing a check for charity might feel good on its own, it isn’t always the best way to support your favorite causes.
As a Microsoft employee, you have a unique opportunity to help the world through tax-advantaged charitable donations. Here’s how to give more effectively, optimize your taxes, and integrate real-world philanthropy into your broader financial plan.
1. Donor-Advised Funds (DAFs): Give Now, Distribute Later
A donor-advised fund (DAF) is a charitable investment account that allows you to contribute assets, receive an immediate tax deduction, and distribute donations over time. Instead of making a one-time gift directly to a charity, you can frontload multiple years' worth of donations into a DAF, claim the deduction all at once, and decide later how to distribute the funds.
Once your assets are in the DAF, they grow tax-free, and you can recommend grants to charities whenever you're ready. This makes DAFs incredibly flexible, allowing you to separate the tax benefits of giving from the actual timing of your donations.
How You Can Use a DAF as a Microsoft Employee
A DAF can be especially useful in high-income years, such as when your restricted stock units (RSUs) vest or when you receive a large bonus. Instead of donating smaller amounts each year, you can "bunch" multiple years of contributions into one tax year, maximizing your itemized deductions and lowering your taxable income while still spreading your donations out over time.
DAFs also allow you to donate Microsoft stock or RSUs without triggering capital gains taxes. Instead of selling shares, paying taxes on the gain, and then donating the after-tax amount, you can contribute the stock directly and receive a deduction for its full fair market value. This can be one of the most tax-efficient ways to give.
Getting Started with a DAF
Choose a DAF provider: Many options are available to pick from.
Contribute cash, stock, or other assets: Donating appreciated stock can help you avoid capital gains taxes.
Claim your tax deduction: Your contribution is deductible in the year you make it, even if you distribute funds later.
Invest and grow your assets tax-free: The funds in your DAF can be invested, allowing you to give even more over time.
Recommend grants to charities at your own pace: Distribute donations whenever you’re ready, whether immediately or over several years.
2. Microsoft’s Matching Program: Double Your Impact
One of the easiest ways to increase your charitable impact is through Microsoft’s employee giving program. In 2025, Microsoft continues to match employee donations dollar-for-dollar, up to $15,000 per year. This means that if you donate $15,000 to an eligible charity, Microsoft will match it with another $15,000 — instantly doubling your gift.
But Microsoft’s generosity doesn’t stop there. The company also matches donations of Microsoft stock and provides a $25 per hour match for volunteer time. Whether you're giving financially or donating your time, Microsoft is committed to amplifying your impact.
How You Can Use Microsoft's Matching Program
Microsoft’s matching program is more than just free money for charity. It’s a way to be strategic about your giving. Instead of donating small amounts here and there, consider maxing out your $15,000 match to ensure you’re getting the full benefit.
If you have appreciated Microsoft stock, donating shares instead of cash can be an even smarter move. Not only will Microsoft match the value of your stock donation, but you’ll also avoid paying capital gains taxes, making it a tax-efficient way to give more.
And if you volunteer regularly, don’t forget to log your hours. Even a few hours per month can add up to hundreds or thousands of extra dollars donated to your favorite nonprofits, all funded by Microsoft.
Getting Started with the Matching Program
Log into Microsoft’s employee giving portal: Search for eligible nonprofits, track donations, and submit match requests.
Make a donation: Give through the portal or donate directly and log it afterward.
For stock donations, coordinate with your brokerage: Transfer shares to the nonprofit, then submit the match request.
Log volunteer hours: Microsoft donates $25 per hour for your time, so be sure to record it.
Track your contributions: Keep an eye on your donations to make sure you maximize the $15,000 match.
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3. Appreciated Stock: Turn Gains into Good
If you're a Microsoft employee with appreciated stock, donating shares directly to charity can be one of the most tax-efficient ways to give. Instead of selling stock, paying taxes on the gain, and then donating what’s left, you can give the shares directly and take a deduction for the full fair market value.
How You Can Use Stock Donations as a Microsoft Employee
Donating stock is particularly useful if you have RSUs that have recently vested or a large portion of your wealth tied up in Microsoft shares. Selling stock can trigger significant capital gains taxes, but donating it directly lets you avoid those taxes while still benefiting your favorite charities.
If you’ve been holding Microsoft stock for a long time and it has appreciated significantly, you might consider donating shares to a DAF, where they can grow tax-free until you’re ready to distribute them.
Getting Started with Stock Donations
Identify appreciated stock to donate: Look for long-held Microsoft shares with significant gains.
Verify that the charity accepts stock donations: Not all nonprofits can accept stock, so check before donating.
Work with your brokerage: Transfer shares directly to the charity or to a DAF for tax-efficient giving.
Submit a match request through Microsoft: Get Microsoft to match your stock donation to double your impact.
4. Qualified Charitable Distributions (QCDs): Give in Retirement
If you’re a retired Microsoft employee over the age of 70½, a qualified charitable distribution (QCD) can be a highly tax-efficient way to give. A QCD allows you to donate directly from your IRA to a qualified charity, satisfying your required minimum distribution (RMD) without increasing your taxable income.
Since RMDs count as ordinary taxable income, directing some or all of them to charity via a QCD can reduce your adjusted gross income (AGI), potentially lowering your tax bracket and Medicare premiums. Instead of withdrawing funds, paying income taxes on them, and then donating what remains, a QCD allows you to give the full amount tax-free.
How You Can Use a QCD as a Microsoft Retiree
If you don’t need your full RMD to cover living expenses, using a QCD can be an excellent way to support charities while minimizing your tax burden. The annual limit for QCDs is $100,000 per person ($200,000 for married couples filing jointly). This means you can transfer up to that amount directly to charity each year, avoiding income taxes on those funds.
QCDs must be made directly from your IRA to a qualified 501(c)(3) nonprofit — you cannot withdraw the funds first and then donate them. Unlike other charitable deductions, QCDs can be used even if you take the standard deduction, making them an attractive option for retirees who no longer itemize deductions.
Getting Started with QCDs
Confirm eligibility: You must be at least 70½ years old.
Choose a qualified charity: Religious organizations, educational institutions, and other 501(c)(3) nonprofits qualify.
Instruct your IRA custodian: Have the funds sent directly to the charity.
Ensure proper tax reporting: Make sure the donation is correctly reported on your tax return.
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5. Charitable Remainder Trusts (CRTs): Earn Income While Giving Back
A charitable remainder trust (CRT) allows you to contribute assets to a trust, receive an income stream for a set period (or for life), and then have the remaining assets go to charity. This strategy is ideal if you have appreciated assets — such as Microsoft stock — since it lets you diversify your holdings, defer capital gains taxes, and receive an immediate charitable tax deduction.
How You Can Use a CRT as a Microsoft Employee
A CRT is especially beneficial if you have highly appreciated stock and want to reduce taxes while maintaining an income stream. Instead of selling your Microsoft stock and paying capital gains taxes, you donate the shares to a CRT. The trust can then sell the stock without tax consequences, reinvest the proceeds in a diversified portfolio, and pay you (or another beneficiary) an income for a set number of years or for life.
Since a CRT is tax-exempt, your assets can grow without being reduced by capital gains taxes, potentially increasing the amount available for both you and the charity. In addition, you get an immediate tax deduction based on the estimated amount that will eventually go to charity.
This is a great strategy if you’re looking for ways to secure income in retirement, support charities, and lower your taxable estate all at the same time.
Getting Started with a CRT
Meet with an estate planning attorney: A CRT is a legal entity, so you’ll need a professional to draft the trust documents.
Choose the right structure: You can set up a CRT to pay either a fixed amount (annuity trust) or a percentage of assets (unitrust) annually.
Donate appreciated assets: Transfer Microsoft stock, real estate, or other appreciated assets into the trust.
Receive income payments: The trust will sell assets and pay you (or another designated beneficiary) income for life or a set number of years.
Support the charity of your choice: At the end of the term, the remaining trust assets go to the charity, completing your philanthropic legacy.
6. Charitable Lead Trusts (CLTs): Support Charities Now, Benefit Later
A charitable lead trust (CLT) is the opposite of a CRT. Instead of paying you first and charity later, a CLT pays income to a charity for a fixed period, and then the remaining assets are passed to your heirs or other beneficiaries. This strategy is particularly useful for reducing gift and estate taxes on assets you plan to leave to your family.
How You Can Use a CLT as a Microsoft Employee
If you’re looking for a way to support charities now while preserving wealth for your family, a CLT can help you reduce estate taxes while making a meaningful philanthropic impact.
A CLT works well if you have assets that are expected to appreciate significantly, such as Microsoft stock. Instead of passing the full amount to your heirs (who could face substantial estate taxes), you place the assets in a CLT, allowing the trust to make payments to a charity for a set number of years.
At the end of the trust term, the remaining assets go to your designated beneficiaries—often at a reduced tax cost since the IRS discounts the future value of the assets when calculating gift and estate taxes.
Getting Started with a CLT
Determine your goals: Decide how much you want to give to charity now and how much you want to pass to heirs later.
Choose a trust structure: CLTs can be structured to pay either a fixed amount or a percentage of trust assets to charity each year.
Select the charitable beneficiaries: The organization(s) you support will receive income payments for the duration of the trust.
Transfer assets into the trust: Highly appreciated stock, real estate, and other assets can be used to fund the trust.
Reduce estate and gift taxes: After the trust term, the remaining assets go to your heirs, often at a lower tax cost.
Maximize Your Charitable Giving with the Right Strategy
By structuring your charitable contributions wisely, you make the biggest impact possible — for both the causes you care about and your own financial future. That’s where smart giving comes in. And by working with a fiduciary financial advisor, you optimize your charitable contributions even more.
At TrueWealth Financial Partners, we help professionals like you maximize the tax benefits of charitable giving while staying on track with your bigger financial goals. Whether it’s leveraging Microsoft’s matching program, donating stock, using a DAF, or setting up a charitable trust, we’ll help you build a strategy that makes the most of your generosity.
Ready to give smarter? Let’s talk about how you can make a bigger impact, reduce your tax burden, and align your giving with your long-term financial plan.
Schedule a free consultation so we can start making your donations go further today.
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