'Tis the traditional season for charitable giving. Taxpayers get a break on what they owe so long as their charitable contributions are made before yearend. The number of people who can itemize their charitable giving is down significantly after the Tax Cuts and Jobs Act went into effect in 2018. The legislation sharply increased the standard deduction and fewer taxpayers have enough deductions for itemizing to make sense.

There are still plenty of tax advantaged ways to give away money for those with means. Among them: Contributing appreciated stock, real estate and other assets to charities, a tax-effective way to give; opening a donor-advised fund at a financial institution or community foundations; and making qualified charitable distributions (QCDs) directly from IRAs for those age of 70 ½ and older.

Charitable giving by individuals fell last year, although individuals still account for a majority of charitable donations. The latest "Giving USA 2023: The Annual Report on Philanthropy for the Year 2022" calculates that giving by individuals fell by 13.4% after adjusting for inflation in 2022 compared to 2021. Charitable giving has dropped only three other times in the last 40 years in current dollars. First in 1987, the year of the Black Monday stock market crash and during the Great Recession of 2008 and 2009. Last year's decline probably reflected a combination of economic uncertainty, stock market volatility, and the end of the 2020 pandemic-driven surge in giving.

There is much more to charitable giving than tax breaks at yearend, of course. I like the poem "When Giving Is All We Have" by Alberto Rios, named Arizona's first poet laureate in 2013. Rios writes:

"Giving has many faces: It is loud and quiet,
Big, though small, diamond in wood-nails.
Its story is old, the plot worn and the pages too,
But we read this book, anyway, over and again:"

Giving repeatedly and regularly makes a difference to ourselves and our community. One theme of mine is that giving is the underappreciated foundation of good money management. The amount of money given away typically pales compared to retirement savings contributions and mortgage payments. What matters in the mindset. When we give away money, we're actively showing what matters to us. The mindfulness of giving and the connections the act forges in our community can also inform the rest of our personal finance decisions, including spending and investing.

Chris Farrell is senior economics contributor, "Marketplace"; commentator, Minnesota Public Radio.