charitable giving presentation

If you’re a professional advisor (such as a financial advisor, insurance agent, attorney, or accountant, among others) looking for more information on how to advise your clients on smart charitable giving strategies, I’d love to speak with you and your colleagues. At every chance, I’m happy to share my firm’s mission to “maximize charitable giving in Iowa” with groups of any size!

rows of brown chairs

In terms of topics, there is actually very little in the area of charitable giving that I do not feel comfortable presenting about. So, if you have a specific subject in mind, do not hesitate to propose it. The following is a sampling of topics I’ve spoken about previously. I can easily combine multiple topics to best fit the presentation to the group’s objectives.

Planned Giving 101

  1. What is “planned giving?”
  2. Gifting during lifetime versus gifting at death
    • Advantages and disadvantages of each
    • Meet clients/donors “where they’re at”
  3. What 2017 federal tax legislation changed for charitable giving
    • Two huge challenges: charitable deduction & estate tax
  4. The seven basic estate planning documents everyone needs (and how charitable giving fits in)
  5. IRA Charitable Rollover & other gifting opportunities through retirement benefit plans
  6. The numerous benefits of the Endow Iowa Tax Credit
  7. Ins and outs of donor-advised funds
  8. Highly appreciated stock and other non-cash assets

Planned Giving 201 (Advanced Gift Types)

When I give presentations on advanced gift types, I also include a short summary of Planned Giving 101 topics.

  1. Charitable gift annuity (CGA)
  2. Charitable remainder trust (CRT)
  3. Charitable remainder annuity trust (CRAT)
  4. Charitable remainder uni-trust (CRUT)
  5. Flip CRUT
  6. Charitable lead trust (CLT)
  7. Retained life estate

Working Together is Better

I can also speak to how nonprofit staff (most especially development officers) and professional advisors can best work together for mutual benefit and for the betterment of clients.

four people around a computer

Fundraising Ethics

Another topic I’ve also discussed in the past is the ethics of fundraising: how to spot warning signs of an impending ethical dilemma; the best ways to handle common ethics concerns; what actions to avoid; etc.

Exceed Client Expectations

If you present me with a list of your most top learning objectives, I would be happy to tailor a high-quality presentation to the group targeting those specific points. Really, any presentation related to charitable giving should be about what can make an impact in the lives and decisions of your clients. Let’s work together to help you and your team exceed client expectations and make an actionable impact on charitable giving in Iowa.

Contact me via email or phone (515-371-6077) to get your learning session planned and scheduled!

 

Marting Luther King Jr. and American Flag

On Martin Luther King Jr. Day, I think it’s important to pay tribute to a man who truly championed ideals of equity, freedom, peace, and justice. Among his many accomplishments, Dr. King tirelessly pushed for nonviolent activism and peaceful resolution to human rights issues. He reportedly wrote five books and gave hundreds of speeches in a single year…more than most of us could produce in a lifetime. And, there’s no doubt that he was a key player and influencer in the passage of the U.S. Civil Rights Act of 1964. Dr. King was subsequently was awarded one of the highest honors in the world in 1964—the Nobel Peace Prize—for “his dynamic leadership of the Civil Rights movement and steadfast commitment to achieving racial justice through nonviolent action.” (He donated the prize money, $54,123, back to the civil rights movement.)

Dr. King and his lasting legacy can undoubtedly serve as an inspiration to us all. I see his dream of a better world—a better future for all—exemplified in action by the hardworking Iowa-based nonprofit organizations. I also see his lessons being practiced by the wonderful donors who support these organizations and advance their missions.

So, yes, it’s nice to have a day off of work, but make certain the day doesn’t pass you by without setting a plan in place to perform some form of service for others. Dr. King tirelessly pursued the advancement of human rights for the greater good and we can honor him by practicing forms of charitable giving as a way to advance the greater good for our communities. Be it through volunteering time to an organization that speaks to your heart (remember, certain costs associated with volunteer can be tax deductible), setting up a donor-advised fund, or simply writing a list of the nonprofits you would like to include as beneficiaries in your will, you too can set out on an honorable service-oriented path and inspire your friends, family, and colleagues to follow suit.

MLK Jr. Day Quote

Dr. King’s lessons resonate with our hearts and heads because we too have dreams of making our corners of the world a better place to learn, live, and grow through service. Maybe Dr. King’s commitment to “practice what you preach” mentality has inspired you this year to give charitably more and more often. Maybe you considered his question, “What’s your life’s blueprint?” and decided to form the charity you’ve wanted to establish for a long time. Either way, don’t hesitate to contact me for a free consult. As Dr. King said: “The time is always right to do what is right.”

Arrows pointing up

An estate plan is simply a set of legal documents to prepare for your death or disability. The specific documents you’ll need depends on various factors, including the number, size, type of your assets, and your overall estate planning goals.

If forced to list the top 10 major components and the associated goals of a comprehensive estate plan, I’d list the following (in rough order of importance):

  1. A plan for orderly disposition of all your property of your choosing.
  2. Naming guardians to raise and care for minor children.
  3. Naming fiduciaries to handle minor children’s assets.
  4. A plan to help fund the charities you supported during your lifetime.
  5. A financial power of attorney so you can name an agent to manage your financial decisions, if you are ever unable to do so, with as specific (or non-specific) directions to the agent as you desire.
  6. A healthcare power of attorney so you can name an agent to manage your financial decisions, if you are ever unable to do so, with as specific (or non-specific) directions to the agent as you desire.
  7. A plan for succession or sale of a business (often a close corporation or family business).
  8. A plan to dispose of property in a tax advantaged manner.
  9. Planning for life insurance to support those economically dependent on you and/or to provide liquidity for the estate.
  10. Making known your wishes (whether simple or complex) regarding the disposition of your final remains.

Of course, any order of importance is unique to that individual. Someone with, say, minor children will find items #2 and #3 incredibly important. Someone else with adult children, or no children at all, but with a very large estate may look at #8 as quite significant. One list doesn’t fit all, just like there’s no one-size-fits-all solution for estate planning.

 

woman cheering at water's edge

What are your estate planning goals? Feel free to share with others in the comments below.

Estate planning is a smart step you can take today. The easiest way to get started is with my free, no-obligation estate plan questionnaire. If you have questions or want to discuss your individual situation, don’t hesitate to reach me by phone (515-371-6077) or email.

25 Days of Giving: Global Trends in Giving 2017 Report

The 2018 Global Trends In Giving report is full of important and valuable statistics for nonprofit professionals. These statistics are not just interesting, but can also impact your donor plans and marketing strategies. But, December is an incredibly busy month with all the year-end fundraising pushes, and policy reviews in prep for the coming operating year. So guess what? I read it for you! (You’re welcome.)

The 28-page report, sponsored by Public Interest Registry (PIR) with research completed by Nonprofit Tech for Good, surveyed a global sample of more than 6,000 donors in a time period from April through June of this year. (It should be noted that although global, the results only represent the views of respondents that read in languages Arabic, English, French, Portuguese, or Spanish; have access to the Internet; and use email and/or social media. 

Here are just a few highlighted insights from the report:

  • There are some clear similarities across generations. For instance, Millennials, Generation X, and Baby Boomers all prefer to give online, compared with options like cash, bank/wire transfer, and mail. Furthermore, approximate 14-15% of each generation group gave on #GivingTuesday 2017. Additionally, approximately 56% of donors from each generation group attend fundraising events. 
  • Millennials and Generation X donors are both most inspired to give through social media and their top cause category is children and youth. In comparison, Baby Boomers are most inspired to give through email and their top category cause is health and wellness.

Occassion of tribute gift

  • By gender, women make tribute gifts more often than men (35% v 21%). However, male and female donors are within 1 percentage point of one another when it comes to enrollment in a monthly giving programs (~55%) and volunteering locally (~67%).
  • Social media, closely followed by email, are the communication tools that most inspire giving.

nonprofit communication

  • Planning your social media awareness and advertising for the year ahead? Facebook remains the undisputed champion of online donations.

Global giving social media

  • Your nonprofit’s website should end in .org. 68% of donors most trust the “.org” domain extension. 
  • Adopting policies such as those regarding ethics, document retention, and confidentiality are essential! 92% of donors say it is important charitable organizations “make a concerted effort to protect their contact and financial info from data breaches.”

how donors prefer to be thanked for donations

  • When thanking donors, the majority (69&) toward appreciating email the most.

Free gifts report giving

  • When thinking about incentivizing and inspiring donors, free gifts don’t always do the trick. Only 20% of donors are more likely to donate if they’re offered a free gift. (Plus, donors need to be aware of considerations when claiming quid pro quo donations.)

Again, these are a just a few of the most important figures picked from an extremely well done and detailed report, 2018 Global Trends In Giving. If you give the report a read, what were the most unexpected and unique statistics to you? I’d love to hear your thoughts and insights!

For any aspect of donation facilitation, organizational compliance, as well as legal training, I’m happy to provide beneficial services to to help your nonprofit best pursue its mission. Don’t hesitate to reach out via email or phone (515-371-6077) any time.

We’re taking a brief break from the details about the logistics of donation substantiation and the benefits of giving stocks to talk about one of my favorite subjects: books! 

The people of Iceland have a lovely tradition called jólabókaflóð where books are exchanged with loved ones on Christmas Eve and then a cozy night is spent reading together. If you choose to start your own “Yule book flood” holiday custom, consider passing along one of the GoFisch Book Club selections we’ve chosen over the year. Which brings us to this month’s title: Winners Take All: The Elite Charade of Changing the World.Winners Take All

The author, Anand Giridharadas, explores how rich and powerful donors utilize donations not just in attempt to change the world, but to shape policy. He presents an argument that the wealthiest of donors perpetually intend to do good, but never intend less harm. The author explores tough questions, which at times, are hard to reconcile with the current state of major giving in the world today. Giridharadas also offers ideas, with a call to action for everyday citizens, on how robust social change can, and should, be more egalitarian.

Not all of the ideas in Winners Take All will be popular with all (especially not the upper crust of the richest donors), but that’s what makes this book so intriguing. It’s not afraid to push the envelope on the conversation around how the public sector operates and delve into the realities of philanthrocapitalism.

What are your thoughts on Winners Take All? I’d love to hear how this inspires your charitable giving or influences your giving strategy. Want to discuss how you can make the most impact with your year-end donation? Don’t hesitate to drop me a line!

glittery ornaments

2018 marks the first tax year under the provisions of the Tax Cuts and Jobs Act. The law ushered in many changes, including an increase in the standard deduction. The deduction for single filers is now $12,000 (up from $6,350 for 2017) and $24,000 if you are a married joint-filer (up from $12,700). In reality, this means that the number of households claiming the itemized deduction (including their charitable donations) will reduce from 37 million to approximate 16 million (according to the Urban-Brookings Tax Policy Center). But, fear not. There are strategies to clear the initial standard deduction threshold.

What the Heck is Bunching?

One of the major options available to charitable donors is to “bunch” donations. To bunch donations you make larger charitable donations this year in a way that exceeds the standard deduction and then smaller ones next year to compensate. Depending on your charitable giving capacity and goals, this means you could alternate every other year or every few years.

Reminder, substantiated donations to a qualified nonprofit can be combined with mortgage interest and state/property taxes when calculating excess above the standard deduction limit. (The Greater Kansas City Community Foundation created a useful illustrated chart of this concept.

man in chair at christmas

Bunching in Practice

By way of example, instead of giving you “normal” $5,000 to charity annually, consider accelerating your gift two years worth of donations in 1 year. So you would end up giving $10,000 every two years. The $10,000 is the same amount you planned to give over the two years, but strategically donated in a way that maximize itemized tax benefits. With this option, you may claim your itemized deductions over the limit one year and then take the standard deduction the next.

Donor-Advised Fund

If you’re considering bunching donations, you may want to do so through a donor-advised fund (or DAF), which offers a unique level of donative flexibility. The DAF allows you to make you charitable contributions and receive an immediate tax break for full donation, even though you can choose to recommend grants to your fave nonprofits from the fund at a later date and over time.

Questions about bunching or how to maximize your charitable donations under current federal and state tax laws? Don’t hesitate to contact me for a free one-hour consultation!

Thanks for reading the 25 Days of Giving series; this is the “gift” for day 3! Plan on coming back to the blog every day from now through Christmas Day.

Might this be a good season to consider being more generous to your place of worship? Generally, churches are considered to be public charities. This means they are typically exempt from local, state, federal, and property taxes. This also means donations can be deducted if you itemize your federal income taxes.

Allow me to offer up four tips which could allow you to give more to your church and pay less in taxes. It’s a win-win situation: make a financially wise contribution AND a difference in an organization you care about.

Tip 1: Consider All Your Assets

You need to consider ALL your assets for smart giving. Don’t just consider cash, but look at your entire basket. Here are three real-world examples:

  1. I know a farmer who doesn’t have lot of cash on hand—we’ve all heard the phrase, “land rich, cash poor.” But, farmland itself can be a very tax-savvy gift. So are gifts of grain.
  2. I know a young person who’s self-employed. Again, not lots of cash on hand. But, this person inherited an IRA from a relative, and must make annual required minimum distributions [RMDs]. IRA RMDs can be a tax-wise gift.
  3. I also know a couple who recently retired. The couple has three life insurance policies, which made lots of sense when their kids were younger. Their kids are now grown and independently successful. A paid up life insurance policy could be signed over to their favorite charity.

Your individual facts and circumstances are unique. Consider seeking a qualified attorney or financial advisor to look at your whole basket of assets.

Tip 2: Consider Long-Term Capital Gains Property

Gifts of long-term capital assets, such as publicly traded stock and real estate, may receive a double federal tax benefit. Donors can receive an immediate charitable deduction off federal income tax, equal to the fair market value of the stock or real estate.

Records are required to obtain a federal income tax charitable deduction. The more the charitable deduction, the more detailed the recording requirements. For example, to receive a charitable deduction for gifts of more than $5,000, you need a “qualified appraisal” by a “qualified appraiser,” two terms with very specific meanings to the IRS. You need to engage the right professionals to be sure all requirements are met.

Second, assuming the donor owned the asset for more than one year, when the asset is donated, the donor can avoid long-term capital gain taxes which would have been owed if the asset was sold.

Let’s look at an example to make this clearer. Sara Donor owns stock with a fair market value of $1,000. Donor wants to use the farmland to help her favorite causes. Which would be better for Sara? To sell the stock and donate the cash? Or, gift the stock directly to her church? Assume the stock was originally purchased at $200 (basis), Sara’s income tax rate is 37%, and her capital gains tax rate is 20%. 

Donating cash versus donating long-term capital gain assets, such as publicly traded stock Donating cash proceeds after sale of stock Donating stock directly
Value of gift $1,000 $1,000
Federal income tax charitable deduction ($370) ($370)
Federal capital gains tax savings $0 ($160)
Out-of-pocket cost of gift $630 $470

NOTE: ABOVE TABLE IS FOR ILLUSTRATIVE PURPOSES ONLY. ONLY YOUR OWN FINANCIAL OR TAX ADVISOR CAN ADVISE IN THESE MATTERS.

Again, a gift of long-term capital assets made during lifetime, such as stocks or real estate, can be doubly beneficial. The donor can receive a federal income tax charitable deduction equal to the fair market value of the asset. The donor can also avoid capital gains tax.

Tip 3: Consider Endow Iowa Tax Credit Program

Under the Endow Iowa Tax Credit program, gifts made during lifetime can be eligible for a 25% tax credit. There are three requirements to qualify:

  1. The gift must be given to, or receipted by, a qualified Iowa community foundation (there’s a local community foundation near you).
  2. The gift must be made to an Iowa charity.
  3. The gift must be endowed (i.e., a permanent gift). Under Endow Iowa, no more than 5% of the gift can be granted each year – the rest is held by, and invested by, your local community foundation. This final requirement is a restriction, but still, in exchange for a 25% state tax credit, it must be seriously considered by Iowa lawyers and donors.

Tip 4: Combine the First Three Tips!

Let’s look again at the case of Sarah, who is donating stock per the table above. If Sarah makes an Endow Iowa qualifying gift, the tax savings are dramatic:

Tax benefits of donating long-term capital gain asset with Endow Iowa
Value of gift $1,000
Federal income tax charitable deduction ($370)
Federal capital gains tax savings ($160)
Endow Iowa Tax Credit ($250)
Out-of-pocket cost of gift $220

NOTE: ABOVE TABLE IS FOR ILLUSTRATIVE PURPOSES ONLY. ONLY YOUR OWN FINANCIAL OR TAX ADVISOR CAN ADVISE IN THESE MATTERS.

Note Sara’s significant tax savings! In this scenario, Sara receives $396 as a federal charitable deduction, avoids $160 of capital gains taxes, and gains a state tax credit for $250, for a total tax savings of $806. Put another way, Sara made a gift of $1,000 to her favorite charity, but the out of pocket cost of the gift to her was less than $200.

giving package with green spruce

Each donor’s financial situation and tax scenario is unique; consult your own professional advisor for personal advice. I’m happy to offer you a free consult to discuss your charitable giving options. I can be reached by phone at 515-371-6077 or by email.

blue and tan present

Thanks for reading the 25 Days of Giving series! Plan on coming back to the blog every day from now through Christmas Day.

In December there is gift giving with wrapping paper abound, but when it comes to charitable giving the important assets (like your retirement assets) don’t need ribbons or bows. Let’s first focus on a major retirement asset giving tool, the IRA charitable rollover.

IRA Charitable Rollover

This federal law allows donors age 70½ and older to make direct distributions of up to $100,000 from his/her IRA each year to any qualified charity. The donation is not treated as taxable income and, moreover, counts toward the donor’s required minimum distribution for that year.

At the end of 2015, Congress made the IRA charitable rollover a permanent giving tool, unlike the year-to-year renewal basis they had operated on since the introduction of the IRA charitable rollover in 2006 (as part of the Pension Protection Act).  The result? Tax savvy IRA account holders can now plan charitable giving in a more reliable way.

Other Options

There are two other accessible ways to direct retirement benefit plan assets to your favorite charity:

  • Gifts at death via beneficiary designations.
  • Withdrawals over age 59½ followed by outright deductible gifts that can effectively result in tax-free retirement plan gifts.

Keep in mind, too, that the IRA charitable rollover applies only to IRAs. These two options — gifts at death via beneficiary designations and withdrawals by those older than 59½ — will work with virtually all qualified retirement plans, including 401(k)s and 403(b)s. baubles on a green tree

Naming your favorite charity as beneficiary

Donors considering charitable bequests may not realize that they can make a meaningful gift simply by naming their favorite charity as the beneficiary of an IRA, 401(k), 403(b), or other retirement plan. Giving retirement assets in this way is easy, and does not require drafting or amending a will or trust. A donor simply has to contact his/her financial institution holding the retirement benefit plan and request a change of beneficiary form.

Note, however, that if the account holder is married, the spouse should be informed and may have to consent to the gift. The plan assets may also be left to a charitable or marital trust[s]. In the latter case, professional advisors should be consulted. (Hint: call me!).

Give now!

Donors could also choose to make current gifts using funds withdrawn from their qualified retirement plans. Individuals over age 59½ may generally withdraw funds from retirement plans without penalty, make a gift with these funds, and then claim an offsetting charitable deduction. In most cases, a gift made in this manner will be a “wash” for tax purposes.

Let’s take a quick example. Rebecca (age 64) wants to make a very generous donation of $10,000 to her favorite charity. She can withdraw $10,000 from her IRA or 401(k) account, and make that donation. Assuming she itemizes her tax deductions, the $10,000 donation should leave her “even Steven” with regard to taxes – the $10,000 in income is offset by the $10,000 charitable deduction, resulting in zero net income taxes.

Advice is Priceless

The decision to want to give to you favorite causes this season is easy. Knowing exactly where to start with smart giving can be a little more complex. If you have questions about the IRA charitable rollover or any other giving strategy, don’t hesitate to reach out via email or by phone (515-371-6077). My firm’s mission is to maximize charitable giving in the state of Iowa and I want to help YOU maximize your personal charitable giving (in a way that is also tax efficient).

Hands giving ornament

Thanks for reading the 25 Days of Giving series! Plan on coming back to the blog every day from now through Christmas Day.

25 days of Christmas - Holiday giving

Tangible personal property is a fancy way of saying “stuff,” such as a painting, computer, furniture, and collectibles (excluding securities, cash, and real estate).  So, if you want to donate your stuff to your favorite charity, what are the tax consequences?

Related Use

The amount of your federal income tax charitable deduction depends on the concept of “related use.” If appreciated tangible personal property is considered related to the charity’s exempt purpose, the deduction is based on fair market value (FMV) and available to the extent of 30% of your adjusted gross income (AGI).

If property is considered unrelated to the public charity’s exempt purpose, you must reduce the FMV by any amount that would have been long-term capital gain had you sold the property for its fair market value. (In short, if the FMV was greater than the basis in the property, your deduction is limited to your basis.)

To sum it up: in order for a donor of tangible personal property to be able to deduct its full FMV, the charity must use the object in a manner that is related to its (the charity’s) exempt purpose. A classic example is the gift of a piece of art, like a sculpture or painting, to an art museum.

Hypothetical

This concept of “related use” can have very profound tax consequences. For instance, assume Jill Donor owns a painting which is now worth $100,000, but Donor purchased it for only $20,000.

If Donor gives this painting to an art museum that keeps and displays the painting, Donor can deduct the painting’s full $100,000 FMV. If Donor gives the same painting to, say, a nature conservancy, which will sell the painting and use the proceeds, Donor can deduct only her $20,000 cost.

Note, that even if the object is potentially related to the charity’s mission–such as a painting given to an art museum–if the charity’s intention is to sell it upon receipt, then the gift is not for a related use and the donor’s deduction will be limited accordingly.

From our hypothetical, it doesn’t necessarily have to be gifted to a museum to be considered for a related use. In Private Letter Ruling 9833011, the IRS ruled that a gift of art to a Jewish community center would be for a related use, as the artwork had both religious and cultural significance. Also, a painting gifted to, say, a hospital may be for a related use if the hospital will display it in a common area so that it helps foster a healing environment for patients.

hands holding evergreen fir

Takeaway

The big takeaway for nonprofits? Nonprofit boards and staffs should know and understand about “related use,” so they can recognize the issue if it arises.

The big takeaway for donors? Donors should obtain in writing the charity’s intent to use the property for a purpose related to its mission.

I want to help you, whether you’re a nonprofit organization or donor, wisely maximize your charitable giving. Don’t hesitate to reach out by phone (515-371-6077) or email (gordon@gordonfischerlawfirm.com).

woman holding sparkler for stocks

Thanks for reading the 25 Days of Giving series. We’re “unwrapping” posts on various aspects of charitable giving each day through Christmas.

A less-than-obvious, but ideal asset for charitable donations is appreciated, long-term, publicly traded stock. Before we list the benefits, let’s break down the terms.

Definitions

Appreciated simply means increased in value.

Long-term means stock held for more than one year; stock held for 366 days. A long-term capital asset is generally taxed at a lower rate.

Publicly traded stock just means a publicly held company whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over the counter markets.

Benefits

The benefits of charitable gifts of appreciated, long-term, publicly traded stock are numerous.

Under federal tax law, charitable gifts of appreciated, long-term stock have a double benefit: (1) the long-term capital gain is excluded from taxable income, and (2) the charitable contribution deduction is the fair market value of the stock. 

Iowa law also provides a third benefit for making a charitable gift of stock; donors can receive a state tax credit of 25% of the gift under the Endow Iowa Tax Credit Program

As if that wasn’t enough to convince you there’s yet another benefit. The substantiation rules for gifts of donated securities are more relaxed than for gifts of other type of donated property. Gifts of publicly traded securities do not require an appraisal to document value. This is important, as non-cash gifts of more than $5,000 generally require a qualified appraisal by a qualified appraiser. (In case you were wondering, the value of gifts of publicly traded securities are based on a simple calculation: the arithmetic mean of the highest and lowest selling prices on the date of the gift.)


If you’re interested in gifting stock to a qualified charity as a part of your end of year giving, make sure you’re doing so in a way that maximizes all of your financial benefits. Or, if you’re a nonprofit leader wanting to accept gifts of stocks, don’t hesitate to reach out via email or phone (515-371-6077) if you would like to discuss further.