None of us know what the future holds, but giving is one effective way to create certainty, even in the most uncertain of times.
We have seen this play out many times before; generous people giving when southwest Washington communities need it most. Most recently, hundreds of donors rallied to transform our SW Washington COVID Response Fund into the largest relief effort ever undertaken by the Community Foundation for Southwest Washington. These funds ultimately gave people the ability to stay housed, put food on the tables and keep the lights on at local businesses. Now, as December arrives, donors have new opportunities to create impact during a critical time.
A report from Neon One, estimates that December giving accounts for roughly a fifth of annual nonprofit revenue. This year, many of these essential organizations are unsure of what’s to come in December, let alone next year. Giving amidst these uncertain times helps them plan with more confidence and continue to address the most important issues affecting our region. Speaking of the issues, many of the causes nonprofits tackle have become more relevant than ever. Housing and homelessness now impact our families and neighbors daily, demand for food assistance is rising and postsecondary education continues to face unprecedented challenges.
For all these reasons and more, now is a great time to step up for our nonprofits and community-based organizations. The question is how? Giving is inextricably tied to our finances, so we have to plan and adapt to the economic reality we’re living in. Our team is passionate about helping donors in this way. Partnering with us will help you take proactive steps to maintain your current charitable goals and plan for the future. There are an array of charitable tools and strategies that enable donors like you to give when local needs are the greatest. Below are a few that might be of interest to you today and in the coming year.
1.) Consider donating appreciated stock positions. Rather than selling appreciated positions to rebalance a portfolio and/or receive cash, gift long-term appreciated assets to a donor-advised fund. In both cases, you can reduce your taxable income. This works well for investors with stocks where the current value is significantly higher than when it was purchased, and those with portfolios that have become increasingly exposed to stock market corrections or fallen out of alignment with investment goals.
2.) Make a gift that provides a cash flow benefit. With a charitable remainder trust or charitable gift annuity, you can arrange regular payments for life—for yourself or your loved ones. During times of economic uncertainty, the fixed income from a gift annuity can be especially helpful and bring peace of mind. At the same time, the balance of the gift benefits charity. It’s a win-win.
3.) Put it in writing. Take a long-term perspective, while also taking control of your future by including your intentions for both family and charity in a will or revocable living trust. Not ready to name a specific charity to support? Our team can work with you to identify and confirm your charitable wishes with a “letter of intent” that can be updated whenever appropriate.
4.) Give using “Forgotten Assets.” Life insurance policies and commercial annuity contracts are often overlooked in considering how to contribute. Depending on several factors, including your planning objectives, you may be able to receive a tax deduction or avoid income taxes altogether.
5.) Take advantage of the IRA “charitable rollover.” If you’re 70½ or older, you can transfer up to $100,000 from a traditional IRA directly to charity. Donor Advised Funds are restricted from receiving these funds, but gifts can support scholarship funds or any of our “pooled” community funds at the Foundation. Ultimately, the amount distributed to charity can satisfy your current year required minimum distribution without increasing your taxable income. I wrote extensively about this strategy and its benefits a couple of years ago if you’d like more information.
This year, we’re rallying support for our General Scholarship Fund, which provides immediate scholarship opportunities to exceptional students who are often overlooked by narrow, merit-based scholarship criteria. Seventeen such students received awards this past year, which provided an average of $2,840 for their educational expenses. This support is life-changing for students like Ashley Gomez and Belinda Vazquez, both of whom have inspiring stories and goals of giving back themselves.
No matter what cause you choose to support, we are ready to help. Whether you’re an individual giver or a professional advisor, we are here to help make giving easy, strategic and impactful