Philanthropy is a very personal decision. As a professional advisor, you may be the first to recognize a potential solution that allows your client to make a charitable gift that has a lasting impact on his or her community and, at the same time, avoids leaving his or her heirs a particular asset that would cause tax issues or other difficulties for them. You can help clients realize their charitable objectives by listening for charitable giving opportunities, explaining options and suggesting solutions. Significant giving opportunities often arise when clients are making major business, personal and financial decisions. The Community Foundation staff can work with you and your client to recommend the best charitable solution.
The following are some typical scenarios:
Year-end tax planning – Your client has just earned a large bonus, wants to give a portion back to the community, but has no time to decide on the most deserving charities. A Donor Advised Fund through the Community Foundation provides an immediate tax deduction as well as the ability to stay involved in recommending uses for the gift in the years to come.
Preserving an estate – Estate planning identifies significant taxes going to the IRS, but your client wants to direct dollars for local benefit. The Community Foundation can work with you and your client to reduce his/her taxable estate and evaluate the most beneficial asset distribution to minimize taxes through a charitable bequest or other planned gift. The donor’s contribution will create a legacy of caring in the community that stays true to his/her charitable intent forever.
Sale of highly appreciated stock – Your client has appreciated stock and wants to use a portion of the gains for charitable giving, but the identified charities are too small to accept direct stock gifts. Suggest establishing a fund at the Community Foundation with a gift of appreciated stock. The donor can even be involved with recommending uses for the gift including the organizations and programs he/she cares most about.
Retiring in comfort – Your client is concerned about running out of money during his/her lifetime, but has always been charitable. Recommend establishing a life income gift (such as a charitable remainder trust) at the Community Foundation that pays income potentially for life. Upon your client’s death, the gift can be distributed by the Foundation in accordance with his/her charitable interests.
As you think about whether the Community Foundation of Cleveland and Bradley County could be the right entity to assist your client with their charitable efforts, ask yourself the following questions:
- Do I have clients who care deeply about their local community and give to more than one charitable cause?
- Are they interested in creating a personal or family legacy in their community?
- Are they considering the creation of a private foundation but have concern about the cost and administrative complexity?
- Would they like to stay personally involved in the use of their gift dollars?
- Do they want to receive the maximum tax benefit for their charitable contributions under federal law?
If you answered “yes” to any of the above questions, your client would probably benefit from knowing more about the Community Foundation. We will be happy to help you make an introduction. Please contact us today to get started.