Talking to a client

What Assets To Give

Choosing the best assets for giving

When your client establishes a fund at the Community Foundation of Greater Birmingham or wishes to add to an existing fund, we have the maximum possible flexibility in accepting different types of assets including:

Securities: Gifts of appreciated securities offer important tax advantages, since their full fair market value is deductible as a charitable contribution up to 30 percent of your client’s adjusted gross income each year when itemizing deductions. Like gifts of cash, deduction amounts that exceed the limit can be carried forward for up to five additional years. No federal or state capital gains are recognized in donating appreciated assets, creating an additional tax benefit in the form of bypassing charitable gains taxes.

Upon liquidation of the securities by the Community Foundation, the full value of the gift is available. Acceptable gifts include all types of business assets, including publicly traded stock, publicly traded bonds, closely held stock, restricted stock, partnership interests (including family limited partnerships) and mutual funds.  Gifts that are not part of a public market will require a qualified appraisal to determine the fair market value.

Bequests:Naming the Community Foundation in a will or living trust is a popular way to support the community.  A charitable bequest can be a specific dollar amount, a percentage or all of the donor’s estate, or a percentage or all of the residual estate. The donor can specify that heirs will receive lifetime income from an estate, with the remainder going to the Community Foundation for charitable purposes.  A bequest can flow to one or more funds within the Community Foundation or be used to create a new fund at the time of the gift.

Sample Language is available  for naming the Community Foundation in a bequest, and the client can be anonymous or recognized as a member of the Community Builder Legacy Society.

Retirement Plan Assets:Your clients may not realize that income tax can eat up as much as 65% of retirement plan assets left to heirs. That’s why these assets should be at the top of the list for charitable giving, creating the greatest benefit for heirs and charitable beneficiaries. Naming the Community Foundation as the remainder beneficiary of these assets can secure a  charitable legacy for the giver.

Life insurance: An unneeded life insurance policy can gain a charitable tax deduction for the giver, based on the policy’s current value, if the giver makes the Community Foundation the owner and beneficiary of a cash value policy during his or her lifetime. A donor also can choose to name the Foundation as the beneficiary of a policy after his or her death.

Real property: The Community Foundation can accept gifts of a personal residence, farm, vacation property, commercial buildings, and income-producing or non-income producing land, which is usually facilitated by the Charitable Real Estate Foundation (CREF), a supporting organization of the Community Foundation.  A gift of real estate owned for more than one year entitles the giver to a tax deduction of the fair market value of the property up to 30 percent of adjusted gross income each year when itemizing deductions.  As with gifts of appreciated securities, there are no capital gains taxes on the appreciated property.

CREF works closely with donors to maximize the value of donated real estate and will work with you and your professional advisors to determine the best structure of your gift for your objectives.

Personal property: The Community Foundation can accept gifts of personal property, such as artwork and jewelry. This type of gift must be discussed individually with Community Foundation staff.

Cash: Cash for a gift makes it possible to claim a tax deduction of up to 50 percent of adjusted gross income in any one year when itemizing deductions, with the excess, if any, carried forward for an additional five years. Credit card gifts can also be made through our on-line donation page.

Whether your client chooses to use cash or a more complex asset, the Community Foundation has experience facilitating a variety of gifts for charitable purposes. Contact Lora Terry or Brooke Coleman for more information.