In our community and across the country, concerns about rising inflation, worries about more frequent natural disasters, and fears of a lingering bear market are weighing heavily on everyone. Bear markets aren’t much fun for anyone. But that doesn’t mean your charitable giving commitments have to be put on hold.
If you are like many donors, you are still looking for ways to support the organizations you care about that rely on your support to achieve their missions. Even in the context of a somewhat harrowing start to the fourth quarter, there are still some financial bright spots in charitable giving.
Remember, not every stock is down.
Not every stock is down. It’s still incredibly tax-efficient to donate highly-appreciated stock to your fund at the community foundation.
When you give appreciated stock held for more than one year (a long-term capital asset) to your donor-advised or another type of fund, instead of selling it outright, the capital gains tax is avoided. Plus, marketable securities are typically deductible at their fair market value, further helping your overall income tax situation.
Don’t forget about the Qualified Charitable Distribution (QCD).
If you’ve reached the age of 70 ½, the QCD is an elegant and effective planning tool. You are still required to take Required Minimum Distributions (RMDs) from your IRA even in a down market, and the QCD can help offset this tax hit by allowing you to direct up to $100,000 to a qualified public charity, including a field-of-interest fund or unrestricted fund at the community foundation.
Consider adding bequests to your estate plan.
This is also a good time to make sure your estate plan is in good shape, including bequests you may wish to leave to a fund at the community foundation so that the causes you care about can continue to be supported for generations to come. A bequest by way of a qualified retirement plan beneficiary designation is an especially effective tool to support your charitable intentions after you are gone. That’s because funds flowing directly to a fund at the community foundation from a retirement plan after your death will not be subject to either income tax or estate tax.
Our priority at the community foundation is to help keep philanthropy strong in our region so that our citizens and our nonprofit organizations can weather the storms now and for years to come.
If you are already a fundholder at the community foundation, thank you! We hope you’ll continue to reach out to our team with questions and ideas about how you can deploy financial resources to achieve your charitable goals.
If you’ve not yet established your own individual, family, or corporate fund at the community foundation, we encourage you to reach out to learn more. This is a perfect time to take advantage of the tax benefits of charitable giving while at the same time engaging your family in making a real and immediate difference in the lives of people in our community who need assistance.