When to Consider Charitable Giving
Significant giving opportunities often arise when you are making major business, personal, and financial decisions. The following are some typical scenarios:
Year-end tax planning: You just earned a large bonus and want to give a portion back to the community but have no time to decide on the most deserving charities. You could establish a Donor Advised Fund through the Community Foundation for an immediate tax deduction and the ability to make gifts to charities for years to come.
Preserving an estate: Estate planning identifies significant taxes going to the IRS, but you want to direct dollars for local benefit. The Community Foundation can work with you to reduce your taxable estate through a charitable bequest or other planned gift. Your gift will create a legacy of caring in the community that stays true to your charitable intent forever.
Retiring in comfort: You are concerned about running out of money during your lifetime, but you have always been charitable. You could establish a life income gift (such as a Charitable Remainder Trust) at the Community Foundation that pays income potentially for life. Upon your death, the gift can be distributed by the Community Foundation in accordance with your charitable interests.
Establishing a private foundation: You are thinking about establishing a private foundation but are looking for a simpler, more cost-efficient alternative. The Community Foundation can help you analyze the pros and cons of creating a Donor Advised Fund, a supporting organization, or a private foundation.
Closely-held stock: Your personal net worth is primarily tied up in a closely-held company, but it is important for you to give back to the community. You could establish a Donor Advised Fund or planned gift, and you are eligible for a tax deduction measured by the fair market value of the appreciated stock less any interest you retain.
Sale or disposition of highly appreciated stock: You have appreciated stock and want to use a portion of the gains for charitable giving, but the identified charities are too small to accept direct stock gifts. You could establish a fund at the Community Foundation with a gift of appreciated stock. You receive a tax deduction on the full market value while avoiding the capital gains tax that would otherwise arise from sale of the stock. You may then make gifts from your fund to the organizations and programs you care about most.
Sale of a business: You own highly-appreciated stock in a company that is about to be acquired. The Community Foundation can work with you to suggest several ways to structure a charitable gift (including the use of planned giving techniques) to help you reduce capital gains tax and maximize impact to the community.
Strategic giving: You are passionate about helping meet a specific community need and want to make a meaningful gift. You can work with our grant-making experts to understand community needs and programs and then direct gift dollars to make the greatest impact.
Substantial IRA/401(k) assets: You want to leave your estate to community and family, and you have substantial assets in retirement accounts. Your professional advisor can help you evaluate the most beneficial asset distribution to minimize taxes and to give more to your heirs while the Community Foundation can make sure you preserve your charitable intent.