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The Community Foundation has the expertise to convert almost any asset into a charitable donation. Consider these options as you plan your charitable gift.
Cash
Publicly-traded Stock
Closely-held stock
Life Insurance
Real Estate
Tangible Personal Property
Qualified retirement plan assets and IRAs
Assets from Other Trusts and Private Foundations
Various Current and Deferred Gift Arrangements
Cash
Tax Advantage. Cash gifts to public charities such as the Community Foundation are tax-deductible dollar for dollar. You are allowed to use the charitable deduction to offset up to 50% of your adjusted gross income in the year you make your gift. Any unused portion of a charitable deduction can be carried forward to the next year as many as five times. Note: In making a gift of cash, you can draw upon any of a number of sources such as a bank account, a matured certificate of deposit, or a money market fund. (Back to top)
Publicly-traded Stock
Tax Advantage. You may transfer directly to the Community Foundation appreciated securities owned for more than one year and receive a deduction for their fair market value on the day of transfer. In addition, you can avoid paying tax on the capital gain (the difference between what you paid to purchase the securities and their current value). You are allowed to use the charitable deduction to offset up to 30% of your adjusted gross income in the year you make your gift. Any unused portion of a charitable deduction can be carried forward to the next year as many as five times. If you have owned appreciated securities less than one year, your deduction would equal their cost basis. Note: If securities owned at a loss are used to make a charitable gift, they should generally be sold first. (Back to top)
Donor Story:
Jim and Judith Youdes’ gift of appreciated stock translates into community good
Closely-held stock
Tax Advantage. Community foundations can own Sub-Chapter S Corporation stock, making it possible for donors to contribute these and other closely-held securities, as well as interests in entities such as partnerships and limited liability companies. To ensure proper analysis and valuation, contributions of closely-held securities require thorough review by the Community Foundation prior to acceptance. (Back to top)
Life Insurance
Tax Advantage. You may name the Community Foundation as both the owner and beneficiary of a life insurance policy. If the policy has cash value, you can take a charitable deduction approximately equal to the cash value or the basis of the policy, whichever is less at the time of the gift. If you are still paying annual premiums and you continue to do so, the amount you pay each year will be tax deductible. Note: You can also retain ownership of a policy but name the Community Foundation as beneficiary of some or all of the death benefit, thereby reducing any estate tax that would otherwise be due. (Back to top)
Real Estate
Tax Advantage. You can make an outright gift of real estate to the Community Foundation and avoid paying capital gains taxes on the appreciation in the property’s value. As long as you have owned it for more than one year, the resulting income tax deduction is equal to the fair market value of the property, as determined by appraisal. You are allowed to use the charitable deduction to offset up to 30% of your adjusted gross income in the year you make your gift. Any unused portion of a charitable deduction can be carried forward to the next year as many as five times. Note: In the case of a personal residence or a farm, you can also retain a “life estate” in the property, allowing you to continue to use or rent it until your death or for a specified number of years. You would receive an immediate income tax deduction for a portion of the appraised fair market value. The property would also be excluded from probate. (Back to top)
Tangible Personal Property
Tax Advantage. For gifts of personal property (i.e., artwork, cars, jewelry), you can generally deduct only your cost basis, not the fair market value. If the property has depreciated in value from the original cost (typically the case with cars), then the deduction will be its current value. Tax benefits are more favorable if the Community Foundation can use the property in connection with its stated mission. Note: Sometimes your best option will be to sell the property and contribute some or all of the cash proceeds. (Back to top)
Qualified retirement plan assets and IRAs
Tax Advantage. These assets are not taxed if they are paid directly to the Community Foundation upon your death. You can designate all or a certain percentage of your retirement asset to benefit the Community Foundation. Note: Under current law, drawing upon such assets to make charitable gifts during life typically does not produce any tax benefit and can actually result in a net tax cost. (Back to top)
Assets from Other Trusts and Private Foundations
To the extent you are permitted by law to make grants from a private foundation, you can direct such grants to the Community Foundation. In some cases, if a private foundation is no longer meeting you philanthropic objectives, it is possible to terminate it and transfer its assets to the Community Foundation to create a Donor Advised Fund or other type of charitable fund. (Back to top)
Available for download:
 Four Approaches to Giving Chart
For instructions on how to download PDF file links, please click here.
Various Current and Deferred Gift Arrangements
In addition to drawing upon the assets outlined above to make an outright current gift, it may be appropriate to enter into a “split-interest” arrangement that benefits the Community Foundation on an immediate basis Options include a bargain sale or a Charitable Lead Trust. (Back to top)
As noted above, it is also possible to designate the Community Foundation as the beneficiary of certain assets and financial arrangements that would be received once your life has ended. As an alternative, you could make a charitable bequest to the Community Foundation through your will or revocable living trust. An additional possibility would be to establish a “life income plan” such as a Charitable Remainder Trust or a Charitable Gift Annuity, resulting in lifetime tax and financial benefits for you and an eventual gift to the Community Foundation. (Back to top)
To create a financial and estate plan that incorporates charitable planning, seek advice from your professional advisors. They, in turn, can call upon the Community Foundation for ideas and information.
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