|Mary M. Stanley, J.D.,CAP, Senior Gift Planning Advisor with CICF. She can be reached at email@example.com.|
cash,” including “21 percent planning to give other assets such as cars or antiques.”
This recent news highlights an important, often overlooked point: Current charitable giving does not have to be just cash or marketable securities. At CICF, several donors recently have created or increased their charitable funds through assets that might previously have been hidden away in safe deposit boxes or otherwise not thought of as potential philanthropic capital. Since we know that most of your clients intend to make charitable contributions this year, it may be helpful to keep in mind the following simple suggestions of alternative charitable resources.
Instead of asking, “What’s in your wallet—or brokerage account?” an alternative inquiry for clients considering potential resources for charitable giving may be, “What’s in your safe deposit box, or on the back shelf of your closet?” Valuable tangible personal property, such as jewelry, antiques, art work, coin collections and other collectibles, can provide significant charitable capital. Unlike gifts of appreciated securities, current donations of valuable personal property are not deductible at fair market value (unless the donated property will be put to a “related use” by the charitable recipient). Understandably, the absence of an attractive charitable contribution income tax deduction would cause appreciated securities to edge out tangible treasures as a preferred source of philanthropic capital. But not everyone has appreciated securities, or thinks 2010 is the best time to convert them to charitable resources. Current donations of valuable tangible personal property offer the benefit of removing the donated assets from the donor’s estate, or avoiding the capital gains tax on the assets if they were sold by the donor – which generally is greater for tangible personal property than it is for appreciated securities. Moreover, if tangible personal property is contributed to a donor-advised fund from which the donor can then make grants for the donor’s standard annual charitable giving list, the use of the tangible personal property offers the added benefit of essentially freeing up cash or securities that otherwise would have been required for the donor to meet their charitable “honored obligations.”
Life insurance can be an excellent resource for making charitable gifts. Although there are several ways for including life insurance in a charitable gift plan, two ideas that may help with your clients’ current charitable giving include assigning annual dividends from an existing policy to charity, or receiving a “life settlement” for the sale of an unneeded policy and donating the proceeds to charity.
IRA Rollover (Potentially)
Charities are still keeping their fingers crossed that Congress will finally act to extend at least for 2010, or make permanent, the IRA charitable rollover provisions, which for the last several years have allowed donors over the age of 70 to make tax free charitable gifts of up to $100,000 from their IRA funds. These assets would be subject to income tax if withdrawn for non-charitable purposes. Please let us know if you would like us to alert you regarding last minute 2010 legislation on this front!
As always, we would be happy to answer any questions concerning possible charitable assets, tools and giving techniques. The focus of this article is on potential “outside the box” current gifts, but gifts of tangible personal property, life insurance and IRAs also are appropriate for planned, testamentary gifts, as well as for use, in many instances, to fund charitable gift annuities or charitable remainder trusts, which provide income for life to the donor or designate. CICF is able to receive many challenging or unusual assets, including real estate, remainder interests, closely held business interests, etc. Of course, each situation is unique and we must analyze each potential gift in accordance with CICF gift acceptance policies. For more information on charitable giving options, please contact Jan Edmondson, firstname.lastname@example.org, or Mary Stanley, email@example.com, at 317.634.2423.