Planned giving is one of those things everyone thinks they know, but often do not. While there are several ways of defining planned giving using technical language, this simple description works in almost every situation:
A planned gift is any gift that takes more than two minutes to make.
Essentially, a planned gift is any gift other than cash or check. Cash, checks, and now credit cards and electronic transfers all take less than two minutes. They are not planned gifts. Almost anything else is. The most common planned gift is a gift by will or trust, where a donor includes a designation in an estate plan to a charity or charities. There are other common planned gifts that are just as important: trusts, life insurance, IRA Rollover, gift annuities, real property, personal property and about a dozen other types of gifts.
If you are a donor, you need to take advantage of planned giving. For example, if you give an appreciated asset to charity, such as stock, you receive a double benefit. By transferring stock, never selling it, you avoid paying capital gains on the appreciation, but still receive an income tax deduction for its present value. Why would you give cash when you can transfer stock and purchase new stock at a higher basis with the cash you would have given? There are similar advantages for real property, closely held stock and other assets. Ask the Community Foundation for help in determining the best planned gift for you.
Donor Advised Funds are a common planned gift, and one that is a specialty of the Community Foundation. Like wills and trusts, it is an exceptional way of making gifts in a significant, but straightforward way. Donor Advised Funds are also a great, advantageous response to the new, higher federal income tax standard deduction. You can combine two or three years of charitable contributions in one calendar year in order to exceed the standard deduction in that year. You can then use the assets in the donor-advised fund to consistently support your favorite charities, even in years when you take the standard deduction. Assets in your donor- advised fund are invested so your charitable dollars can grow tax-free.
Explore the benefits of planned giving. Before you make your next gift be sure to check with the Community Foundation to determine if a planned gift might be a better fit.