Now is the perfect time to review your year-end giving strategy. Spending a few minutes thinking about your charitable and financial goals can give you an advantage in both. The Community Foundation is here to help, working with your professional advisor to maximize the joy of giving and simplify taxes. Here are ten ideas to help you think about year-end giving.
10. Deduction Limits
Cash contributions are deductable up to 60% of your Adjusted Gross Income (AGI) through 2025; unless new legislation passes, they revert to 50% in 2026. Contributions of publicly traded stock are deductable up to 30% of AGI at fair market value.
9. Donor Advised Funds
8. Use Appreciated Securities
You can establish/add to any fund using cash, of course—but if you give shares of appreciated public stock or bonds that you’ve had more than a year, you will gain a tax advantage. Instead of triggering the capital gains tax, you will receive a charitable deduction based on the asset’s fair market value today, up to 30% of your adjusted gross income. You can carry the deduction forward for up to an additional five years.
7. Put Your Non-Cash Assets to Work
Do you have appreciated stock, mutual funds, private company or restricted stock, retirement assets or certain tangible personal property? Often, we can use these non-cash assets to fund your charitable giving. The key is to start now; these transactions can take longer to convert.
6. Consider Charitable Contributions Directly from your IRA
Anyone age 72 or older as of December 31, 2022 must take their RMD by year-end to avoid a penalty (unless this is your first RMD, in which case you have until April 1, 2023.) As such, making a qualified charitable distribution (QCD) from your IRA (for those over 70½) may make sense for you. Think about adding to or establishing a designated fund here to support your chosen nonprofit(s), or take the opportunity to support our work by making a gift to our Community Endowment Fund or a particular Field of Interest fund. Note: QCDs may not be deposited into Donor Advised Funds; if you want to give to another charity, make that distribution directly from your IRA.
5. Give the Gift of a Designated Agency Endowment Fund
There are many worthy nonprofits that struggle with resources. By establishing a Designated Agency Endowment in their name, you can be assured that The Community Foundation will steward a specific portion of your fund assets to your named agency, along with your instructions, each year in perpetuity.
4. Start a Field of Interest Fund or an Unrestricted Fund
If you’re interested in improving Northeast Florida, but are uncertain about which specific nonprofits to recommend, consider a Field of Interest Fund or an Unrestricted Fund. Both put The Community Foundation’s seasoned grantmakers in charge of decision-making, either from your stated area of interest or using their discretion regarding the greatest needs/opportunities.
3. Update Your Beneficiaries
You can update the beneficiaries on your bank accounts, retirement accounts or insurance policies at any time, but it’s a good idea to review them at least annually. If you choose to, you can use this opportunity to add The Community Foundation or any nonprofit as a beneficiary—it’s the simplest (and sometimes best) way to leave a planned gift.
2. Think About Estate Planning
As we near the end of another year, it’s often a time of reflection about the arc of our lives. It may be a good time to think about your charitable legacy and talk to your professional advisor about your estate plans. Charitable gifts will be excluded from your taxable estate, and we can work with you and/or your professional advisors to identify what charitable vehicles might be appropriate. Learn how Eli and Martha Bekkum turned to The Community Foundation to help create a legacy gift for the performing arts.
1. Talk with Your Family About Your Philanthropic Values
As Andy Williams sang, “…when loved ones are near, it’s the most wonderful time of the year.” It may also be the perfect time to articulate what you value in your charitable giving. Your loved ones may know that you give generously and to whom, but they may not know why. Enlighten them! If charitable giving is important to you, share your motivation with your family members and the fulfillment that your gifts bring. If you’d like to bring them into your charitable giving process, or help them on their own journey, we have some great suggestions for family philanthropy.
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The Community Foundation for Northeast Florida is not engaged in providing legal or tax counsel. For advice or assistance in specific cases or whether to make certain a contemplated gift fits well into your overall circumstances and planning, the services of an attorney or other professional advisor should be obtained.