By Mary Kathryn Britenfeld | Photo By Getty Images/uchar

Smart Ways to Invest Your ‘Talents’

Do You Invest Your Talents?

October 12, 2022 | It is a question worth pondering. In one of Jesus’ best-loved parables (Matthew 25:14-30), a man is preparing for a long journey. Prior to his departure, he calls his servants and entrusts them with some money. What happens next can teach us how God thinks about investing.

  • The first servant receives five talents and works to build them into five more
  • The second servant receives two talents and doubles their value
  • The third servant receives one talent and buries it in the ground

Jesus tells us that upon the man’s return from his journey, he rewards the two servants who increased the value of his original offering. However, the third servant is rebuked for burying his one talent and receives no reward. The message is clear: Doing nothing with our talents is not what Jesus asks us to do.

As a financial advisor, I love this parable. I pray that we all do something meaningful with our talents. Even better, when we are blessed with more than what we need, we have opportunities to be “good and faithful servants” by further sharing our gifts. Making qualified charitable distributions or donating securities of marketable appreciation may be a great way to offer up those talents to others. Here are a few options to discuss with your financial advisor or tax preparer.

Qualified Charitable Distribution

When planning your individual retirement account withdrawal strategy, you may want to consider making charitable donations through a qualified charitable distribution (QCD) if you qualify. A QCD is a direct transfer of funds from your Individual Retirement Account (IRA) payable to the qualified organization of your choice, such as the Catholic Church, or your favorite Catholic or other charitable organization. Your financial advisor can arrange the transfer upon your request as it must go directly from the custodian to the charitable organization to qualify.

A QCD paid directly to a qualified organization from your IRA is not subject to federal tax. Therefore, when utilizing the QCD option, you can lower your adjustable gross income, which may provide you with greater income tax savings. This option may also positively affect other items on your tax return when compared to making a cash gift and claiming an income tax deduction.

For those of you turning age 72 this year, welcome to the distribution club! You will now be subject to required minimum distributions (RMD), which means you must begin withdrawing from your traditional IRA, SEP IRA, or SIMPLE IRA. In 2020, the age for withdrawing from retirement accounts changed from 70 ½ to 72 years. The RMD is the amount you must take out of your account to avoid penalties from the IRS. Upon distribution from an IRA, you must pay applicable federal taxes. This is where the benefits of a QCD comes into play – no federal taxes paid if the distribution goes directly to a qualified charity of your choice. State tax rules may vary. 

Charitable gifts of appreciated securities

Charitable gifts of appreciated securities can benefit both the donor as well as the charitable organization receiving the gift. As the donor, your gift is not subject to the capital gains tax. Capital gains taxes are owed on the profits from the sale of an investment. As there is no sale in this example, there is no capital gains tax to be paid. By contributing shares directly to the Church or other qualified charitable organization, not only can you deduct the fair market value of your gift from your income taxes, you can also avoid paying capital gains taxes on the gifted shares. Please discuss this strategy with your financial advisor and/or tax preparer because some limitations may apply.

Biblically responsible investment strategies can be a great way of stewarding our “talents,” just like the two wise servants in Jesus’ parable. By tapping into a growth mindset and investing our resources, we can continue building the kingdom of God here on earth.


Mary Kathryn Britenfeld is a financial advisor and college instructor in Grand Rapids, Mich. She has an MBA from the University of Notre Dame.