Why do people give? After asking our community this question over the past several months, it's clear that there are as many reasons for giving as there are donors.
For some, it's the desire to support a favorite cause, or maybe to fund student scholarships. For others, it's a way to honor the memory of a loved one or to simply find a way to make a lasting difference.
Often practical considerations inform charitable decisions. That's where the Community Foundation can be an especially valuable resource. Careful planning can maximize one's ability to give while accomplishing other financial and tax goals.
Described by some as the "nonprofit equivalent of locally-based businesses," the Community Foundation helps a broad cross-section of citizens with their charitable giving. We hold over 235 distinct funds established by individual donors to facilitate their philanthropy in a results-oriented manner. Through the Community Foundation, donors can get the most from their giving while retaining the highest possible amount of flexibility and effectiveness.
As an example, perhaps you are preparing to sell a real estate or business asset and have been advised to consider charitable deductions. Yet the complexity of issues related to the sale of an asset can be overwhelming, sometimes crowding out a decision regarding which charity to support. One way to cut through the noise would be to open a Donor Advised Fund (it can be done quickly and efficiently) and lock in a tax deduction for the current year, as well as to determine charities to support at a later date.
Donors should also rediscover "forgotten assets" such as life insurance policies, commercial annuity contracts and saving bonds – often overlooked when considering assets to contribute. These can all be effectively used to fulfill your charitable goals. For example, perhaps you own a life insurance policy that is no longer needed. Name a charitable institution such as the Community Foundation as both the owner and beneficiary of the policy. If the policy has cash value, you can take a charitable deduction approximately equal to the cash value or the basis of the policy, whichever is less at the time of the gift. If you are still paying annual premiums and you continue to pay them, they will become tax deductible each year.
Also, think of an IRA as a possible giving tool. Assets in an IRA or a qualified retirement plan are among the least advantageous to leave to individuals. Instead, consider passing more tax-favored assets to loved ones and creating or adding to a Donor Advised Fund with retirement plan assets. This will establish a wonderful family legacy by providing a tool from which your heirs can recommend charitable gifts.
The reasons for giving are numerous and deeply personal. How to give strategically and meaningfully, however, may be an answer the Community Foundation can provide.
