Our region is so much stronger as a direct result of the generosity of our donors. We are grateful for donors who partner with us through Donor Advised Funds, gifts to the Community Foundation, and through aligned grantmaking that improves our region. The Community Foundation offers a flexible platform to meet your charitable goals.
As you think about your year-end giving, here are a few simple strategies to keep in mind.
- Donate Appreciated Securities Over Cash. Doing so results in a charitable tax deduction for the full fair market value of the securities as of the day you donate them, plus you eliminate the capital gains tax you would otherwise incur if you sold the securities first and then donated the proceeds. At the end of the day, you avoid some taxes and have more to donate to your favorite charity.
- Donate Retirement Assets. Individuals aged 70½ or older can donate up to $100K directly from their IRA through a “Qualified Charitable Distribution” (“QCD”). The QCD is excluded from income for tax purposes. For individuals younger than 70½, a charitable deduction can still help offset the tax liability of a retirement account withdrawal. In 2021, cash donations can be deducted up to 100% of a taxpayer’s adjusted gross income – so there is a greater opportunity to maximize the tax benefit of charitable contributions this year.
- Take Advantage of Bunching with a Donor Advised Fund. If your total itemized deductions for 2021 will be below the level of the standard deduction, consider “bunching” or combining your 2021 and 2022 charitable donations into one year (2021) and placing them into a Donor Advised Fund. Doing so will allow you to receive a greater tax benefit by itemizing deductions for 2021. In subsequent years, you can take the standard deduction without having to make any additional charitable contributions. Because your increased contributions are in a Donor Advised Fund, you can now make distributions to your favorite charities over several years from your fund.
Should you have any questions about year-end giving, please do not hesitate to contact George Gaskin, Director of Gift Planning.