Be the expert: Charitable giving options

It is not unusual for conversations about major charitable donations to start six months or more before a complex gift is inked. And, of course, the fourth quarter is when many clients want to wrap things up with charitable remainder trusts, large endowment gifts, and even bequests. That’s why it’s a good idea to make sure your clients are aware of their options early in the year.

Appreciated stocks and other investments

Giving publicly-traded stocks, bonds, and mutual fund shares that a client has owned for over one year is a tax-effective way for them to support their favorite charity. These can be given directly, or to a donor-advised fund or designated fund at the Community Foundation. Capital gains tax can be avoided on the appreciation, meaning 100% of the value is used for the desired charitable outcomes, and the gift is deductible at fair market value. 

Retirement savings plans

Whether via a Qualified Charitable Distribution (“QCD”) from an IRA owned by a client who is over 70 1/2 years old, or through a bequest via a beneficiary designation, retirement savings can be an effective source for charitable giving. Charitable gifts of retirement assets through a QCD or bequest are not subject to income tax. The assets are also removed from the client’s estate for estate tax purposes. QCDs from IRAs can be directed to field-of-interest or designated funds at the Community Foundation, and any type of fund can receive a bequest of retirement assets. 

Complex assets

Real estate, closely-held business interests, collectibles, and other nontraditional “alternative” assets can deliver strong tax benefits when given to a public charity. The proceeds from the sale will support the client’s favorite charitable causes based on the gift agreement. In fact, a client can use a donor-advised fund at the Community Foundation to ensure that the proceeds from such a sale will support several organizations. This technique is useful to clients who want to support multiple charities with the gift of a single alternative asset.

You can become the trusted expert when you help your clients understand the range of property they can give to support their favorite charities. And, by collaborating with the Community Foundation to achieve your client’s charitable wishes, you can be sure they do it in the most tax-savvy manner.

As always, the Community Foundation is here to help. Reach out to Alison O’Carroll, director and philanthropic counsel, at 404.333.0241 or aocarroll@cfgreateratlanta.org to discuss creative gift solutions and gifts of complex assets that can support multiple nonprofit causes.