Ways Clients Can Give
How clients fund their charitable giving is often an area where they look to their professional advisors for guidance. The Community Foundation has a unique ability to accept a broad range of assets. To establish a fund at the Community Foundation a client can use the following:
A gift of cash can be an easy way to set up a fund or add to an existing fund. Clients can simply write a check payable to the Community Foundation for Greater Buffalo and indicate the fund they would like the gift applied to on the memo line. Cash can also be transferred directly from a client's bank account to the Community Foundation's account by contacting Betsy Constantine at (716) 852 -2857 or firstname.lastname@example.org.
Clients can also choose to contribute assets other than cash to the Community Foundation for Greater Buffalo. Examples include:
- Appreciated Securities
- Closely-held Stock
- Retirement Plan Distributions
- Life Insurance
- Real Estate
- Other items of value (jewelry, art, automobiles, antiques, etc.)
The benefits of non-cash gifts include:
- Providing a substantial gift for the community during life
- Diversifying assets
- Potentially eliminating capital gains tax
- Receiving maximum income tax deductions
For many people, investments in securities represent a significant portion of their assets. Stocks and other investments are often an important part of a client's long-term plans. Donating assets, such as stocks, bonds, mutual funds and other securities that the client has owned for more than a year may provide tax benefits.
Clients who’ve owned securities that have appreciated in value over time may owe substantial capital gains taxes when those securities are sold. If those assets are gifted to charity, however, capital gains tax implications disappear.
By giving securities, clients can maximize the size of their charitable gifts, conserve the cash they would have given, and enjoy multiple tax benefits.
Often when a client is considering selling or passing on a business to the next generation, there is an opportunity to receive a tax deduction by donating a portion to the Community Foundation. Once the company is sold, the portion that was given to the Community Foundation can be used to create a fund of the client's choosing. This can be a great tool to offset gains and fund one's charitable giving.
Each business is evaluated by a committee of Community Foundation board members before the gift is accepted.
Retirement assets face tax rates of up to 75% if they are left to a family member other than a spouse. This makes them attractive assets to use for charitable giving.
Clients who wish to reduce the size of their estates during their life, or who do not need the income from their retirement plan(s) may want to consider taking advantage of IRA Charitable Rollovers when available. Clients over 70 1/2 years can make direct distributions from their IRA, up to $100,000, to the Community Foundation. This can satisfy the client's required minimum distribution (RMD) and the transaction incurs no federal income tax and removes the assets from the client's estate for tax purposes. There is pending legislation to allow IRA Charitable Rollovers. Please contact Betsy Constantine at (716) 852 -2857 or email@example.com for more information.
If your client's goal is to provide for charity and future generations, retirement assets are often the best assets to give to charity, leaving more favorable taxed assets to give to family. In this case, the client can name their fund at the Community Foundation as the beneficiary of their retirement funds, which can be a simple and effective way to benefit the community while avoiding significant tax penalties.
Making a gift of life insurance to a fund at the Community Foundation for Greater Buffalo is both simple and cost-effective. One of the easiest ways to make the gift is to designate the client's fund at the Community Foundation as a primary, secondary or contingent beneficiary to the policy. A contingent beneficiary means that the client's fund at the Community Foundation will receive what’s left from the policy after taxes and expenses are paid out.
Clients can also transfer ownership of a paid-up policy to their fund at the Community Foundation, making the gift eligible for a tax deduction equal to the policy's cash value. Another alternative is to name the client's fund at the Community Foundation as the designated owner and beneficiary, making annual gifts to the fund in the amount of the annual premium. Under this arrangement, the premium would be paid by the Community Foundation, and the premiums paid on the policy will be tax deductible to the client.
Gifts of real estate (outright or through an estate) may provide a great opportunity for the client to achieve financial as well as charitable objectives.
Other Items of Value* (jewelry, art, automobiles, antiques, etc)
Tangible personal property may be accepted as a gift. Each item is evaluated by a committee of Community Foundation board members before the gift is accepted.
*Indicates a qualified appraisal and a completed IRS Form 8283 is required.