With the end of the year approaching, a topic that may be on your mind is charitable giving. But how exactly should you approach it?

For many people, charitable giving tends to be driven by the charities themselves. As solicitations arrive, people decide on a case-by-case basis whether or not to pull out their checkbooks. But some folks follow a more structured process, and that’s the approach I recommend. It includes these three questions:

1. How much ideally would you like to give? There are a few dimensions to this question. As a starting point, I suggest totaling up the gifts that you’ve made, on average, over the past few years. If you’ve been making gifts on the larger side, then those figures will be on your tax return. Or, if you use a donor-advised fund, most funds’ websites provide annual giving summaries. That’s what I would call a “dollar-based” approach to thinking about giving, and that’s the way most people think about contributions.

An alternative is to take a percentage-based approach. Just as it sounds, some folks target a specific percentage of their pay for charitable giving. If your income varies significantly from year to year, this approach may be more appealing. I am, of course, not prescribing—or proscribing—any particular amount or percentage. I am just suggesting that your first step be to quantify your goals.

2. How much can you afford to give? To answer this question, I’d start with the pay-yourself-first framework. If you’re not familiar with it, here’s how this strategy works: Assuming you have a sense of your long-term financial goals, you’d work backward to calculate the minimum you’d need to save each year to be on track for those goals.

For example, suppose you currently have $2 million saved, and your goal is to have $5 million for retirement in fifteen years. In that case, assuming 5% returns (to be on the safe side), you’d have to save about $40,000 per year to hit that $5 million goal. If you take the pay-yourself-first approach, then you’d just need to make sure you’re adding that amount to your savings each year. Then you can choose to allocate what’s left in any ways you see fit, including charitable giving.

3. What are the tax considerations? On the surface, this seems like a simple question. If you’re in the 32% tax bracket, then every dollar you give ought to save you 32 cents in taxes. Unfortunately, the IRS doesn’t make it that easy. There are a few wrinkles to keep in mind.

The wrinkle that affects the most people: the standard deduction. In 2021, an individual taxpayer is entitled to a $12,550 deduction, and a married couple is entitled to $25,100. But under current rules, there’s a $10,000 cap on the deduction that can be taken for state and local taxes. That makes it more difficult than in the past to muster enough deductions to exceed the standard deduction. The result: If you don’t have any other significant deductions, charitable contributions may not provide any incremental benefit.

One solution to this challenge, as I’ve noted before, is to use a donor-advised fund. Then you can group several years of contributions together into one year such that you exceed the standard deduction and realize a bigger tax benefit. You could then repeat this process periodically—every two or three years, for example. Another benefit of donor-advised funds: They allow you to donate appreciated assets, thus sidestepping capital gains taxes. Some even accept cryptocurrencies.

Donor-advised funds are terrific, but there are a few caveats. If you’re donating appreciated stock, annual contributions are limited to 30% of adjusted gross income, but if you’re donating cash, the limit is 60%. The IRS imposes other contribution limits, which are important to keep in mind. For most people, these limits are very generous, but it’s nonetheless important to be aware of them.

Another tax consideration applies to investors who are contending with required minimum distributions. Beginning at age 70½, taxpayers are eligible to make contributions directly out of their tax-deferred retirement accounts. This is called a qualified charitable distribution (QCD). What’s the benefit? While contributions made this way aren’t eligible for a deduction, they carry a potentially more valuable benefit. They count toward required minimum distributions, up to a maximum of $100,000 per person. Not only can this lower your income tax bill, but it can lower other costs which are tied to adjusted gross income. These include Medicare surcharges and the degree to which Social Security is taxed. If you’re in this age range, you’ll want to compare the relative tax benefits of a standard contribution to a QCD.

What about potential tax law changes? While Congress is never very popular, they’re certainly not winning new friends this year. For months, they’ve been debating potential rule changes, some of which would be retroactive to earlier periods in 2021. As an investor trying to make planning decisions, this makes things even more difficult. According to the latest version of the bill, there would be no changes to the income tax brackets next year. However, the 3.8% net investment income tax would apply to distributions from S corporations. If you own an S corporation and take sizable distributions on top of your salary, that would represent a tax increase in 2022. All things being equal, that would be a reason to delay deductions such as charitable contributions into 2022. It’s important to note, though, that negotiations are ongoing. This change might or might not make it into the final rules.

A final point for exceptionally generous donors: As noted above, in most years, deductions on cash contributions are limited to 60% of adjusted gross income. But for 2021, as part of the CARES Act, you’re permitted to deduct up to 100% if you contribute directly to a charity. Yes, you could zero out your tax bill this year if you were so inclined.