Community Foundation of St. Joseph County

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Giving Tips from Community Foundation President Rose Meissner

Making the Most of Your Year-End Philanthropy

Rose Meissner

The end of the year is a big time for charitable giving. Here are a few practical tips for charitable giving. After such a strong stock market rally, a few of these tips may be even more appealing.

Income tax deduction. Gifts to public charities are fully deductible up to 50% of your adjusted gross income for cash gifts (30% for gifts of appreciated securities). The new tax proposal under consideration will double the standard deduction. If this passes, most people who currently itemize will find it makes more sense to take the standard deduction. Some current “itemizers” may choose to move up intended 2018 charitable donations into 2017 to capture the benefit of the charitable deduction.

Give stock, not cash. The steep rise in the stock market means many people have highly appreciated securities (think “Apple”, for instance). If you give away shares of Apple and use the cash you were going to give to charity to purchase new shares, your new shares will have a higher cost basis, reducing your capital gains taxes when you sell the shares in the future.

Gifts from IRA accounts. If you’re over 70½, you can make gifts up to $100,000 directly from your IRA to public charities (excluding donor-advised funds). These gifts count toward your annual required minimum distribution and will not be counted as personal income. They are not tax deductible, though, because IRA assets were never taxed to begin with. Here again, this option might be even more attractive given recent stock market performance.

Build an endowment for the future. Consider placing a portion of your annual giving into an endowed fund, either your own named family fund or that of a favorite charity.  Many Community Foundation donors establish donor-advised funds as a charitable savings account. Their fund is invested to produce earnings that subsidize their annual gifts to charity in the future while creating a permanent legacy. Donor-advised funds can be established for as little as $10,000, payable at once or over a period of time.

Charitable gift annuities. Charitable gift annuities are a great way to increase your own income now and benefit your favorite charity later. How? You give a gift of cash or stock (minimum: $10,000) to the Community Foundation now, for which you (and your spouse, if applicable) receive a fixed income, guaranteed for life. The gift annuity rate (typically 5%–8%) is based on age (older people receive higher rates). Your gift annuity is partially tax-deductible and your annual income will be partially tax-free.

Act before December 31, 2017, to save on this year’s taxes. If I can be of any assistance, please call me (574) 232-0041 or email me.

Best wishes for a peaceful holiday season and a wonderful new year!

Rose Meissner
President, Community Foundation of St. Joseph County