Plan ahead if you're giving before Dec. 31
It will be 2020 before you know it. Don’t let 2019 pass you by without making a difference in your community.
If you’re one of those people who chooses to make donations at the end of the year, now’s the time to take action! While tax laws have changed over the past couple of years, the end-of-year deadline still remains if you want to take advantage of tax savings.
If you plan to use stocks or securities to make your gift, notify your financial institution in plenty of time for it to complete the process. The Harrison County Community Foundation (HCCF) has everything in place to make it easy to give stock or securities. Just contact us and we’ll help you get started.
If you’re age 70 and ½ or older and have an IRA, remember you can transfer money directly to a charity and not have to pay income tax on that portion of your distribution. It makes sense to use this pre-tax money for a charitable gift instead of from other sources that you have already paid tax.
Speaking of taxes, with the recent tax law changes, some donors are finding a Donor Advised Fund (DAF) to be a great tax tool to maximize charitable giving. What is a DAF? It’s a fund held by a sponsoring organization that allows the donor to advise and distribute charitable gifts to a variety of qualifying organizations over time.
The real tax advantage of a DAF now is that you can make a gift large enough to qualify for itemizing your deductions one year, then take the standard deduction for the following year or more. If you have a high-income year and normally support nonprofit work, this tool can help you maintain a more consistent and predictable level of giving as well as take the bite out of high income taxes.
DAFs have become very popular as a service offered by many financial investment firms. Vanguard, Fidelity and Schwab are just some of the firms that offer this option.
The IRS has certain rules in place about how money from a DAF can be used. The money cannot be used to award scholarships or grants to individuals. Neither can it be used to fulfill any pledges or purchase tables or sponsorships – with benefits – at an event.
DAFs can be used to award grants directly to a charitable organization or give to an endowment fund that benefits a charitable organization or scholarship.
HCCF offers DAFs as well. All of our DAFs are endowed so that just like our other endowment funds, the result provides an ongoing stream of support because only a portion can be granted at a time. The rest of the fund is invested and continues to grow.
A HCCF DAF can allow the donor to easily make anonymous gifts, make gifts to multiple charities and involve the family in making recommendations for grants. HCCF takes care of all the administration and reporting.
As the year winds down, charitable giving winds up. As a donor, you have lots of choices regarding the methods you use to give as well as what you want to support.
Don’t wait until you feel the crunch and possibly miss out on the best giving option for you. Contact Kim Harmon, Director of Development, at 812-738-6668 or firstname.lastname@example.org. We’re happy to help you explore the possibilities.