Dual strategies for charitable clients, transferring a private foundation, and a bear market case study

Hello!

Thank you for the opportunity to work together. We are grateful for the many conversations we continue to have with attorneys, CPAs, and financial advisors as you help your clients navigate charitable planning in a rapidly evolving environment. It is a privilege to support your efforts to align your clients’ philanthropic goals with their broader financial and estate plans.

As tax policy and market conditions continue to shift, many of you are seeing new dynamics emerge in your client conversations. Our team is closely monitoring these trends so we can share timely insights and practical ideas to support your work.

–As charitable planning becomes more nuanced, your clients are increasingly falling into two distinct groups. Ultra-high-net-worth individuals are navigating sophisticated, long-term strategies tied to legacy and wealth transfer, while clients earlier in their careers are engaging in charitable giving for the first time, often encouraged by new incentives. Understanding these differences can help you tailor your approach.

–For clients with private foundations, simplifying the structure may be top of mind. Transferring assets to a donor-advised fund at the community foundation can reduce administrative burdens, but a thoughtful transition—including proactive communication with nonprofit grantees—is essential to maintaining strong relationships and continued community impact.

–The possibility of a sustained down market can influence how clients think about giving. A case study highlights how you can help clients stay focused, identify tax-efficient opportunities such as gifts of appreciated stock, and remain responsive to increasing community needs during uncertain times by working with the community foundation.

Thank you for your continued partnership. Please consider the community foundation to be your first call whenever the topic of charitable giving arises. We look forward to working with you.

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Serving charitable clients: Dual strategies emerge

As tax laws and market dynamics continue to shift, it is important for attorneys, CPAs, and financial advisors to be aware of two increasingly distinct groups of donors. On one hand, the high federal estate tax exemption and new restrictions on itemizing charitable deductions are creating unique needs for your clients whose assets exceed $30 million. On the other hand, the new charitable deduction for non-itemizers offers an entry point and incentive for your clients who are just starting out in their careers or still building wealth.

Recent research underscores just how pronounced this divide is becoming. Individuals with a net worth of $30 million or more—often referred to as ultra-high-net-worth donors—are playing an increasingly outsized role in philanthropy, accounting for a significant and growing share of total charitable giving. At the same time, policy changes are encouraging broader participation at the other end of the spectrum, bringing new donors into the fold even if their initial gifts are modest. The result is a philanthropic landscape that is simultaneously becoming more concentrated and more expansive.

For your ultra-high-net-worth clients, charitable giving is rarely about a single transaction. Instead, it is often deeply integrated into long-term planning around wealth transfer, business succession, and family legacy. These clients may be evaluating complex assets, timing considerations, and multigenerational involvement. Conversations tend to focus on strategy—how philanthropy aligns with identity, values, and long-term impact. The community foundation can help you navigate these discussions by offering flexible structures, local insight, and support for engaging the next generation in meaningful ways.

By contrast, clients earlier in their wealth-building years—including the children and grandchildren of ultra-high-net-worth clients—may be engaging with charitable giving in a more incremental and exploratory way. The availability of a charitable deduction for non-itemizers creates a new opportunity to introduce philanthropy as part of their financial lives sooner than in the past. For these clients, the focus is often on establishing habits, identifying causes, and understanding how giving fits alongside other priorities. Even relatively small gifts can serve as the foundation for lifelong philanthropic engagement. (Note that the new deduction for non-itemizers applies only to cash gifts and is not available for gifts to donor-advised funds.) 

These two groups are not just separated by wealth—they are operating under different incentives, different planning horizons, and different motivations. As a trusted advisor, recognizing these distinctions can help you tailor your conversations and add value in more meaningful ways. Some clients may benefit from sophisticated planning strategies, while others simply need a clear and accessible entry point.

Here is one final but important point: Regardless of whether a client itemizes or doesn’t itemize, pay close attention to clients who are age 70 ½ and over and who own IRAs. Qualified Charitable Distributions are a powerful and tax-advantaged tool for clients to transfer up to $111,000 per taxpayer (2026 limit) to support favorite causes. What’s more, proposed legislation may open the door for your clients to use QCDs to fund their donor-advised funds at the community foundation. Right now, clients can use QCDs to fund field-of-interest, unrestricted funds, and certain other types of funds at the community foundation, but not donor-advised funds.    

As always, the community foundation is here to support both ends of this spectrum. Whether your client is structuring a complex gift involving closely held assets or taking the first steps toward organized charitable giving, our team can help you identify the right approach. We are honored to be your partner in serving your charitable clients across every stage of their philanthropy journey.

Transferring a private foundation? Remind clients to communicate

As you work with clients who have established a private foundation, it is not uncommon for the conversation to eventually turn to whether this structure still makes sense. What began as a seemingly logical vehicle for organizing a family’s philanthropy can, over time, become administratively burdensome, especially as leadership transitions to the next generation. In many cases, transferring a private foundation’s assets to a donor-advised fund at the community foundation can offer a simpler and more flexible path forward.

You may already be familiar with the general benefits of a donor-advised fund. A donor-advised fund can reduce administrative responsibilities, eliminate many of the complex tax compliance requirements, and allow families to focus more fully on their charitable goals rather than ongoing operations. The technical mechanics of making the transition are also relatively straightforward, such as:

–Confirm that the private foundation’s board has approved the termination and documented the decision appropriately.

–Establish a donor-advised fund at the community foundation, often structured to mirror the private foundation’s name and governance approach.

–Grant the bulk of the private foundation’s remaining assets to the new fund, leaving a reserve to cover final expenses.

–Satisfy outstanding liabilities and complete the private foundation’s final tax filings and state-level dissolution requirements.

While these steps are important, the transition is ultimately about more than mechanics. It is an opportunity to reposition the family’s philanthropy for the future—reducing administrative friction while preserving, and in many cases enhancing, the impact of the family’s giving.

One aspect of the transition deserves particular attention because it is easy to overlook: communication with grantees. For many private foundations, relationships with nonprofit organizations have developed over years—sometimes decades. In some cases, grantees may rely on annual or recurring support. 

When a private foundation winds down, a lack of clear communication can create confusion or uncertainty for the organizations that have come to depend on that funding. As a trusted advisor, you can play an important role in helping your client plan for this transition thoughtfully. What’s more, the community foundation can serve as a sounding board. Our team has close relationships with hundreds of nonprofit organizations in our community. Here are five tips for a client’s communication plan that you can help develop with the support of the community foundation team:

–Encourage your client to communicate early and clearly with key grantees. Your client does not want nonprofits to hear about the transition from anyone else. 

–The communication itself does not need to be complicated. A straightforward email message explaining that the private foundation is transitioning to a donor-advised fund—and that the family remains committed to charitable giving—can go a long way. 

–Importantly, if possible, the client should reach out personally to each nonprofit grantee to let them know that they will be receiving email communication. This is not just a nice touch; it is a powerful way to maintain and deepen trust. 

–If the client intends to continue supporting certain organizations, it is helpful to reassure those nonprofits that future grants may be recommended through the community foundation. 

–Messages can also affirm the mission of the community foundation and the broader resources and network it provides to both your clients and the nonprofits they’ve supported for many years. 

As always, the community foundation is here to help you and your clients navigate both the technical and relational aspects of this process. Whether your client is ready to move forward now or simply beginning to explore options, our team is honored to work alongside you to ensure a smooth and thoughtful transition to support your clients’ charitable objectives.

Case study: Charitable giving in a down market

As you guide clients through ongoing market uncertainty, you may be noticing that conversations are becoming as much about perspective as performance metrics. While headlines may or may not ultimately signal a prolonged downturn, the mere possibility of a bear market can influence how clients think about everything from retirement timelines to charitable giving. As an advisor, you have an opportunity to help clients stay grounded and intentional, even when emotions are running high.

Consider this scenario.

When David and Laura arrive at your office for their annual planning meeting, the tone feels different from prior years. In their early 70s and recently retired, David and Laura have always approached financial decisions with a long-term mindset. But today, Laura opens the conversation with a note of concern.

“We’re not panicking,” she says, “but it’s hard to ignore what’s going on in the markets. It just feels unsettled.”

You nod. You’ve been hearing similar sentiments from many clients. Even when portfolios remain relatively strong, uncertainty alone can create stress. Studies have consistently shown that financial concerns weigh heavily on emotional well-being across generations, and market volatility tends to amplify those feelings.

As you walk through David and Laura’s portfolio and estate plan, the numbers tell a reassuring story. Their overall financial plan is still on track, and their estate plan still reflects their goals. But you recognize that this moment calls for more than reassurance. It is an opportunity to reframe how charitable giving fits into the broader picture.

“You’ve both been incredibly consistent in your support of local organizations,” you say. “Tell me how you’re feeling about giving this year.”

David pauses. “We still want to give,” he says. “We just don’t want to make a mistake if the market gets worse.”

That hesitation is familiar. Rather than pulling back entirely, many clients simply need a way to move forward with confidence.

You start with a simple reminder.

“Not all stocks are down.”

You point to a portion of their portfolio that has performed well over time. These appreciated positions present an opportunity. By contributing long-term appreciated stock to their donor-advised fund at the community foundation, David and Laura may be able to avoid capital gains tax while supporting the causes they care about. Even in a volatile market, this strategy remains one of the most efficient ways to give.

Laura leans in. “So even now, that still makes sense?”

“It often does,” you reply. “And it can give you flexibility. You can make the gift now, receive the tax benefits, and then take your time recommending grants.”

The conversation begins to shift. Instead of focusing solely on uncertainty, David and Laura are now thinking about options.

You also gently raise another point.

“Market cycles come and go, but community needs don’t pause.”

You explain that periods of economic strain often increase demand for nonprofit services, particularly for households already feeling the effects of inflation and rising costs. The community foundation is closely connected to these needs and can help ensure that their giving is as impactful as possible.

Finally, you mention a strategy they have not yet used.

“Because you’re both over 70 ½, we should also look at Qualified Charitable Distributions from your IRAs.”

You walk them through how a QCD could satisfy required minimum distributions while avoiding income tax on those amounts. For clients in their stage of life, it is a straightforward and effective way to continue supporting charitable priorities regardless of market conditions. “You can direct your QCDs to certain types of funds at the community foundation,” you explain. “You can’t use them to add to your donor-advised fund (at least not yet), but you can support the community foundation’s strategic priorities to help the whole region thrive.” 

By the end of the meeting, David and Laura feel a renewed sense of clarity. They decide to move forward with a gift of appreciated stock to a donor-advised fund and explore a QCD over the summer to avoid the year-end rush. Just as importantly, they feel reassured that their charitable giving does not need to stop simply because the market feels uncertain.

Situations like this are increasingly common. Even the possibility of a downturn can shape client behavior, but it can also open the door to meaningful planning conversations and help keep charitable giving going strong across our community. As always, the community foundation is here to help you navigate these discussions—offering practical strategies, local insight, and support for your clients’ charitable goals in every type of market environment.

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Women and philanthropy, takeaways from two recent tax rulings, and a business exit case study

Hello! 

Thank you for the opportunity to work together! We love hearing from so many of you throughout the year, and especially as tax time approaches. It is an honor to work with your charitable clients to maximize their community impact as well as their financial and estate planning goals.

As always, the team at the community foundation watches trends closely so that we can keep you informed of legal and policy developments that could impact your work with philanthropic individuals and families. We’re happy to share what’s trending.

–Women are increasingly shaping the philanthropic landscape—often as primary financial decision-makers and stewards of family legacy. Whether transitions happen gradually or in the wake of loss, the shift is unmistakable. Discover four practical insights to help you better serve women clients and strengthen the charitable strategies you design together.

–Two recent cases offer a timely reminder: When it comes to charitable deductions and exempt status, technical compliance is everything. Good intentions alone will not carry the day. We’re highlighting what these rulings mean for your client conversations and how proactive guidance can prevent costly missteps.

–A business sale is never just a financial transaction—it is a turning point for family identity, community presence, and long-term legacy. A case study can help illustrate how intentional philanthropy can transform a liquidity event into a unifying strategy that preserves both values and relationships for the next generation.

Thank you for your partnership. Please consider the community foundation as your first call whenever the topic of charitable giving comes up during your client meetings. We look forward to our next conversation! 

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Women and philanthropy: Four insights to inform your practice

At the community foundation, we’re honored to work with hundreds of individuals, families, and businesses who support a wide range of charitable causes. The generosity and commitment across generations and demographics inspire our team every single day. 

March is an especially good time to reflect on the evolving role of women in philanthropy because it’s Women’s History Month. Increasingly, women are leading charitable decisions in their families, especially as more women are serving as primary financial decision-makers, according to Indiana University’s Lilly Family School of Philanthropy’s Women Give 2024: 20 Years of Gender & Giving Trends. 

Two scenarios are driving this change:

– In many families, a leadership shift happens gradually. For example, a daughter becomes more engaged over the years in conversations about the family’s charitable giving. Or a spouse who once deferred philanthropic decisions begins to shape priorities more directly. 

– In other cases, the transition is sudden and deeply personal—often following the death of a spouse or parent—when a woman assumes sole responsibility for stewarding both financial assets and charitable intent.

Here are four examples of how your awareness of these trends can play out in your day-to-day practice:

Help your clients give through thick and thin.

According to the Women Give 2024 study, over the past two decades, single women experienced a smaller decline in charitable participation than single men, and their average giving amounts held steadier or increased in certain contexts (e.g., secular causes during COVID-19). Be aware of this trend as you represent single women; it may be a priority for them to continue giving even when times are tough. The community foundation can help you develop a charitable giving plan to enable women-led philanthropy to continue through life’s ups and downs.

Discuss national trends and local needs. 

According to the Women’s Philanthropy Institute at Indiana University’s Lilly Family School of Philanthropy, for the first time, between 2022 and 2023, giving to women’s and girls’ organizations surpassed 2% of overall charitable giving. This represents over $11 billion going to women’s and girls’ organizations each year. Note, however, that when adjusted for inflation, the amount actually declined between 2021 and 2023. This trend is worth mentioning to clients, especially with the help of the community foundation team to share parallel local trends and opportunities to make an impact.

Ask about all forms of philanthropy.

According to the 2025 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households, 43% of affluent households volunteered in 2024, up from 37% in 2022—volunteers tend to give more and support causes more deeply, a pattern often stronger among women. Be sure to ask your female clients about causes they support both financially and through volunteerism. 

Tailor advice for single women.

Research shows that participation trends vary by household type, with single women maintaining more consistent giving patterns over long periods. Pay particular attention to building thoughtful charitable giving plans for single women households. The community foundation can help maximize both impact and financial planning goals as you serve these clients.

As is the case when you are working with any charitable client, our team is honored to be your partner. Whether your client is establishing a new structure, building a comprehensive strategy around an existing donor-advised or other type of fund, or navigating inherited philanthropic responsibilities, we are here to help ensure their giving reflects both enduring legacy and evolving purpose.

Documentation is no joke and coffee is not milk: Two important tax rulings

At the community foundation, we value the role you play in helping individuals and families make the most of their charitable giving. That’s why we’re committed to providing regular updates on legal and policy developments that may impact your clients. 

In two recent rulings, the underlying message is consistent: Courts and the IRS continue to apply the technical requirements governing charitable deductions with precision. Your clients’ good intentions are not enough. 

Strict substantiation: A familiar but critical reminder

Gibson v. Commissioner serves as yet another reminder that it is really important for your clients to substantiate their charitable deductions. Time and again, both the IRS and the Tax Court have disallowed a taxpayer’s deduction because rules were not followed. In Gibson, a married couple claimed nearly $194,000 in noncash charitable contributions related to donated personal property. The court did not dispute that tangible items were transferred to a charitable organization. Instead, the deduction failed because the taxpayers did not satisfy the detailed substantiation requirements—specifically, contemporaneous written acknowledgments and qualified appraisal standards.

No matter how strong a client’s desire to make a difference through charitable donations, technical compliance drives deductibility. Form 8283 thresholds, appraisal rules, and acknowledgment language are not administrative formalities; they are statutory requirements. The Gibson case provides a practical example to share with clients who may be inclined to “drop off” significant in-kind gifts without first consulting their advisory team. 

Here’s the key takeaway: Even though you as an attorney, CPA, or financial advisor may fully understand the importance of following the rules, you still need to remind your clients regularly. You don’t want a client to ask “Why didn’t you tell us?” when they learn the hard way that they should have kept better records. 

Exempt status is not forever

The lesson in Milk Saving Starving Children Foundation v. Commissioner is that if you say you’ve got milk, you’d better have milk! In Milk, the Tax Court upheld the IRS’s revocation of 501(c)(3) status for an organization that failed to operate exclusively for charitable purposes and conferred impermissible private benefits. The organization’s stated mission—to distribute milk—was in fact charitable. Over time, though, its operations drifted away from distributing milk to operating a coffee shop and hosting a golf tournament. 

Here’s why we’re sharing this case:

- The Tax Court’s written opinion in Milk provides a terrific overview of the legal principles behind one of the cornerstones of tax-exempt status: a charity’s ongoing activities must further its exempt purposes. As you bring new attorneys, CPAs, and financial advisors into your practice, the Milk case is simply terrific for training purposes. 

- As it applies to your client work, remember the Milk case when a client expresses interest in supporting a lesser-known or newly formed organization. Please reach out to the community foundation in these instances because our team can provide insight on any charitable organization, whether well-established or new—and offer safeguards through field-of-interest funds and other vehicles.

Thank you for the opportunity to work together to serve your charitable clients! Our goal, as always, is to serve as a practical resource—helping you ensure that your clients’ charitable intentions are fulfilled with clarity, compliance, and confidence.

Case study: Business owners exit with a family legacy

As an attorney, CPA, or financial advisor, you probably work with several clients who own a family business. You’ve likely also considered that there may be a role for strategic philanthropy in family business succession planning to help clients get ready for an eventual exit. But so what? How does strategic philanthropy actually play out in conversations with a real client? 

Here’s a case study to illustrate a scenario similar to what you might experience in your own practice.

When Mark and Elaine come into your office to update their estate and financial plans, retirement is only part of the future picture they’d like to discuss. At 66 and 64, they are financially secure—but the larger question looming in the background is the future of the family business. After three decades of ownership, they are beginning to explore a sale within the next few years.

The first part of your conversation is very familiar: income projections, portfolio sustainability, and how the family business’s corporate structure could evolve to allow Mark and Elaine to step back from day-to-day operations. If you are their financial advisor or CPA, you might run the models, stress-test assumptions, and outline what taxes and retirement could look like if a liquidity event occurs. If you are their estate planning attorney, you might review the company’s legal structure and emergency transition plans. 

In any case, you know the numbers are strong. A sale would more than fund Mark and Elaine’s lifetime needs. But as your conversation deepens, a more complex issue surfaces: what does succession look like—not just operationally, but reputationally and relationally?

“Our two adult children are not active in the business,” says Mark. “A third-party sale is inevitable, and we are fine with that financially, but it’s a gut punch emotionally.” A concerned expression crosses Mark’s face as he considers his feelings about a sale to non-family members. “The company’s name carries a lot of weight in the community,” he says. “For years, the business has been closely associated with the family’s identity and local impact. So what happens to that identity if we sell?” Mark wonders aloud.

Elaine’s concern is more inward-facing. “I really want our children to stay aligned after a liquidity event. For so many years, company events and trips have been where we’ve all gathered. I hate to think of that ‘glue’ disappearing in an instant.” Elaine says she has seen other families fracture after a business sale. “They barely see each other anymore,” she remarks.

This is where you introduce a broader planning lens. You validate that a business sale is not only a financial event. It is deeply personal and public at the same time. “How the family positions itself before, during, and after that transition can shape both community legitimacy and internal unity for decades,” you say. “So you both are spot on with your concerns.”

You suggest that philanthropy—structured intentionally before a sale—can serve as a bridge. What you mean is that Mark and Elaine could explore the option to transfer shares in the business to a donor-advised fund at the community foundation well in advance of any potential transaction. Then, when the business is sold, a portion of the proceeds lands in the donor-advised fund.

The tax advantages of the transaction are meaningful. By donating a portion of closely held stock before a legally binding sale process begins, Mark and Elaine are eligible for an income tax deduction, subject to AGI limitations, based on the stock’s fair market value at the time of the gift. Later, when the business is sold, the proceeds on the shares held by the donor-advised fund are not subject to capital gains tax.

Still, you emphasize that tax efficiency is only one layer.

Creating a donor-advised fund before the sale allows the family, working together, to articulate a charitable mission while the business is still operating. It signals continuity: although ownership may change, the family’s commitment to the community does not.

You suggest to Mark and Elaine that the community foundation team join the next meeting. Of course, you remain responsible for facilitating the transaction and coordinating with other advisors. But the community foundation’s philanthropic advisors can facilitate conversations that go beyond the corporate, legal, financial, and tax aspects, leading a dialogue focused on questions that will shape the family’s philanthropy plan, such as:

• What causes reflect the values that built the business?
  
  

• How should the family’s name be represented post-sale?
  
  

• What governance structure will guide the next generation’s involvement?

You also share with Mark and Elaine that the community foundation can host structured family meetings, provide community needs assessments, and introduce best practices for multigenerational philanthropy. Importantly, this gives the children a meaningful role before liquidity occurs. Instead of simply awaiting proceeds, they begin working together to recommend grants, evaluate impact, and represent the family publicly.

In effect, philanthropy becomes a training ground for shared decision-making—without the operational risk of running a company.

Mark and Elaine love this suggestion. “Let’s do it,” Elaine says. “This plan makes us feel like a future sale is less like an ending and more like a pivot.” 

Mark and Elaine’s situation is one of many examples of cases where a family business may eventually change hands. But through an intentional philanthropic structure—designed in coordination with the community foundation—the family’s influence, values, and unity continue. Please reach out to our team anytime. It is our pleasure to help you serve your charitable clients through all stages of their lives. 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Navigating clients’ life transitions, the post office’s year-end surprise, and real estate as a charitable planning tool

We appreciate the opportunity to work with you! The community foundation team is always honored to hear from attorneys, CPAs, and financial advisors as you serve your philanthropic clients.

As you work day-to-day with charitable individuals and families, you know that philanthropy rarely exists in a vacuum. It intersects with life events, tax rules, emotional decision-making, and the types of assets your clients actually hold. Our team is here to help you navigate those intersections with clarity and confidence—especially when clients are facing change, uncertainty, or complexity.

Here’s what we’re covering this month:

—Charitable planning during life’s sudden changes. Clients often make their most consequential financial and estate planning decisions during periods of upheaval—after a divorce, the loss of a spouse, retirement, or an unexpected shift in assets. When clients feel overwhelmed, charitable giving can help re-center decision-making around values and purpose. Learn how the community foundation’s tools can help your clients move from reactive choices to intentional action during life’s inevitable transitions.

—A year-end rule change that caught many people by surprise. If your clients mailed charitable gifts at the end of 2025, the U.S. Postal Service’s change to how postmarks are applied may have real implications for charitable deductions. We’ll help break down what changed, why it matters, and how you can help clients document and, in some cases, preserve deductions they intended to claim for 2025.

—Real estate as an underutilized charitable asset. Although real estate represents a significant portion of many clients’ wealth, it remains one of the least used assets in charitable giving. As property ownership continues to shift across generations and clients reassess underused or burdensome real estate, gifts of appreciated property may play an increasingly important role in philanthropy. Lean on the community foundation as you explore key planning considerations, technical requirements, and opportunities for converting real estate into flexible charitable tools.

As always, the community foundation team is here to support you and your clients. Whether you’re helping a client navigate a life transition, untangle a technical rule change, or explore creative ways to give using non-cash assets, we are honored to serve as a resource and collaborative partner. Please don’t hesitate to reach out—we look forward to working with you.

—Your community foundation

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Sudden life changes: Charitable giving can help clients get through it

As an attorney, CPA, or financial advisor, you are no stranger to witnessing the ripple effects of life’s unexpected curveballs. If you represent a client over many years, you’re very likely at some point to help the client through a serious illness, a loved one’s death, business challenges, marital dissolution, strained relationships with children, or all of the above. 

Research and survey results tell us that many clients’ most consequential estate and financial planning activities arise not from long-term intentions, but from sudden change. Moments like this are challenging because clients are often overwhelmed and unsure how to proceed, and even the best advice can feel like too much information delivered too soon. In these situations, be aware that charitable planning can help re-anchor clients’ decision-making in values rather than fear or urgency. For many clients, generosity is one of the few topics that still feels familiar when everything else is shifting. 

Here are three examples:

Change in assets

Following a divorce settlement, a client may suddenly be holding cash, concentrated stock, or other highly appreciated assets. The client may also be juggling other priorities: adjusting lifestyle expectations, supporting adult children, and rethinking an estate plan. When the client also wants to do something charitable but isn’t sure yet what organizations to support, setting up a donor-advised fund at the community foundation can be a natural fit in some cases, allowing the client to be eligible for a tax deduction when the contribution is made while taking time to decide which charities to support and when.

Loss of spouse 

A client whose spouse has recently passed away may want to make a charitable gift in the spouse’s memory, but likes the idea that the gift could benefit the community for many generations and address urgent needs that arise decades from now. Setting up an unrestricted fund at the community foundation allows a client to support evolving community needs over time as well as support the mission of the community foundation itself. 

Retirement

A 74-year-old client who just retired is feeling less “relevant” outside of the workforce, and therefore would like to do something meaningful for the community. With plenty of assets in retirement accounts, the client does not need to rely on distributions from IRAs to maintain lifestyle standards. This client could be a good candidate to establish a designated fund (to support a specific nonprofit organization) or a field-of-interest fund (to support an area of need such as education, health care, or the arts) at the community foundation. Then, the client may direct Qualified Charitable Distributions from IRAs (up to $111,000 per taxpayer in 2026) to the fund, bypassing adjusted gross income and counting toward required minimum distributions. 

The community foundation is happy to help. Next time you are meeting with a client who is experiencing one of life’s inevitable rough patches, remember that charitable planning allows your client to take action that brings joy, reflects identity, aligns with purpose, and helps the client shift from a reactive mode to an intentional one. 

Postmarks, rule changes, and remedies for clients’ 2025 charitable gifts

If you were surprised to read about the ripple effect of a seemingly small change in the U.S. Postal Service regulations late last year, you were not alone! Here’s what you need to know, including potential remedies for your clients whose 2025 charitable deductions may be impacted by the rule change.

What’s the background with the IRS?

Under long-standing IRS guidance, a charitable contribution is generally considered “made” for tax purposes when the donor irrevocably parts with control of the gift. For contributions made by check and sent through the mail, the IRS has traditionally treated the date of the U.S. Postal Service postmark as the date of the gift, even if the charity receives the check later. This approach is reflected in IRS Publication 526 and generally parallels the broader “mailbox rule” under Internal Revenue Code Section 7502, which treats certain documents and payments as timely based on their postmark date rather than the date of receipt. 

Okay, so if this is not an IRS issue, what happened?

In November 2025, the U.S. Postal Service (not the IRS) changed how postmarks are applied. Effective December 24, 2025, the official postmark date is now defined as the date of the first automated processing scan at a USPS processing facility, rather than the date a letter is dropped in a mailbox or handed to a clerk at a local post office. As a result, mail deposited on December 31, 2025 may not have actually received a postmark until several days later, especially around the holidays. This change took many people by surprise and created a lot of confusion, prompting the USPS to issue a “facts and myths” circular. 

So what’s this got to do with the IRS?

Because the IRS’s practices continue to rely on the postmark to establish the date of a mailed charitable gift, this change can cause a contribution a client intended to deduct for 2025 to be treated as a 2026 contribution if the postmark reflects a January processing date.

If my client got caught up in this change, is the client totally out of luck for a 2025 charitable deduction? 

Not necessarily. Remember, the underlying IRS rules governing charitable contribution timing have not changed. Publication 526 still requires your clients to “substantiate”—meaning document—the date of their gift, and the IRS continues to look at objective evidence to substantiate and determine when the contribution was made. What has changed is the ability to rely entirely on an ordinary envelope postmark as proof of a year-end gift. (Advisors should understand that the statutory mailbox rule in Section 7502 is primarily directed at tax filings and payments to the IRS, but in practice the IRS uses similar concepts when evaluating the timing of charitable gifts, particularly where the postmark is the primary evidence of mailing.)

Okay, it sounds like all is not lost. What should I do to help my client?

If a client was caught up in this rule change at the end of 2025, the first step is to gather and preserve any alternative proof that establishes when the gift was actually mailed. Documentation such as a USPS Certificate of Mailing, a certified or registered mail receipt, or a manually applied postmark or postage validation imprint obtained at the retail counter can help demonstrate that the donor relinquished control of the gift before year-end, even if the automated processing postmark is later. Even where the client has such postal documentation, contemporaneous records such as copies of the check, the client’s notes, and any correspondence with the charity should also be retained in the event the deduction is questioned. In other words, you may be able to build a case to support a client’s deduction for 2025.

What should clients do for 2026 and beyond? 

Advisors should counsel clients on how to avoid this issue going forward. Electronic giving methods such as online donations, ACH or wire transfers, and completed transfers of publicly traded securities provide clearer and more immediate timestamps for deduction purposes and do not depend on postal processing practices. 

How can the community foundation help?

Reach out to our team early in the year! Many clients find themselves rushing around at year-end to make charitable donations. The change in the postal rules is a terrific reason to remind a client that organizing charitable giving through a donor-advised fund at the community foundation allows the client to make a donation for tax purposes to the donor-advised fund well before the end of the year, thereby securing any applicable charitable deduction, and then recommending grants from the donor-advised fund anytime to favorite charities.

As always, we look forward to serving you and your clients!
  

Worth a look: Charitable gifts of real estate

If your client base includes philanthropic individuals and families, you’re likely aware that gifts of real estate are an option to fund charitable giving. Real estate is the largest asset class in the world, yet various industry sources suggest that only 3% of charitable giving involves gifts of real estate. Still, it’s understandable that charitable real estate donations are often overlooked; the rules and process are complex. What’s more, many clients struggle emotionally when they start to think about parting with their real estate.

Things might begin to change, however, as real estate ownership changes hands at a rapid pace in the midst of a major transfer of wealth over the coming years. Gen X and Millennials are expected to potentially inherit trillions of dollars in real estate, and that shift has important implications for charitable giving. As more families hold significant wealth in property rather than cash, philanthropy will increasingly involve non-cash assets, especially appreciated real estate. At the same time, many clients are reassessing properties they already own, particularly vacation homes that once felt like a dream but now feel underused, costly, or burdensome. 

Given these shifting market dynamics, it is important to be aware of how real estate can be repurposed to support charitable goals in a tax-efficient way. Here are six points to keep in mind:

—Gifts of long-term capital assets, including real estate, are typically eligible for a charitable deduction based on the property’s fair market value, rather than its original cost when they’re given to a public charity. You’ll want to confirm that the property qualifies as a long-term capital asset, since the fair market value deduction is available only for property held for more than one year. 

—Your clients can make gifts of real estate to a donor-advised or other type of fund at the community foundation. Because the community foundation is a public charity, when the property is sold, the proceeds can flow into the fund without triggering capital gains tax. This allows a client to convert an illiquid or burdensome asset into a flexible charitable resource that can support favorite causes over time.

—Before your client sets in motion a gift of real estate, please reach out to the community foundation team to help evaluate and coordinate the viability of the gift, as well as offer options for the types of fund or funds to receive the proceeds to achieve your client’s charitable goals. 

—Additional considerations include confirming that the property is not encumbered by a mortgage or other debt, which can complicate the gift, evaluating whether depreciation recapture or unrelated business income tax could apply, and determining whether environmental due diligence is required. 

—As is the case with any gift of an illiquid asset, documentation and process are critical. Your client must obtain a qualified appraisal to establish fair market value and properly report the gift on Form 8283, and the transfer must be completed using appropriate legal documents, including a deed. 

—You’ll also want to ensure that the client has not prearranged a sale of the property (even through casual conversations), which could jeopardize the deduction under the IRS’s anticipatory assignment of income rules or step transaction doctrine. 

Although the technical requirements can seem daunting, the payoff of a real estate gift can be substantial for both your client and the community. The community foundation is here to help with the charitable aspects of all types of gifts, and real estate is no exception. We look forward to working with you and your clients to help transform real estate into a powerful tool for lasting charitable impact.

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Your 2026 charitable checklist, keep going with donor-advised funds, and a QCD case study

Happy New Year! 

We are honored to kick off another year working with so many attorneys, CPAs, and financial advisors to help you serve your philanthropic clients.

There’s a lot trending as 2026 rolls in! Our team closely watches for developments impacting charitable giving. We share the curated highlights with you, which saves you time as you keep up with everything else related to your clients’ tax, financial, and estate planning matters.

Here’s what’s happening as the new year dawns:

—Don’t get caught off guard by 2026 tax adjustments—including Social Security COLA increases, higher standard deductions, updated tax brackets, QCD limits, and new non-itemizer charitable deductions. Each of these changes can impact which charitable strategies you recommend to your clients. The community foundation is here to help translate technical tax changes into meaningful charitable outcomes for your clients.

—Even after the flurry of “bunching” activity at the end of 2025, donor-advised funds remain a powerful planning tool despite the new charitable deduction floor and cap that took effect in 2026. Donor-advised funds at the community foundation are especially valuable to your clients thanks to our team’s local expertise, the administrative simplicity we offer, and our ability to support a client’s evolving legacy and estate planning goals.

—We are always happy to share realistic case studies illustrating how Qualified Charitable Distributions can reduce a client’s taxable income while supporting meaningful philanthropy in retirement. Notably, our team is happy to provide examples of language you can use to explain to a client why QCDs cannot flow into donor-advised funds and how alternative community foundation fund options can still meet the client's goals. Work with our team to turn complex tax rules into compliant, values-driven charitable strategies. 

As always, the community foundation team is here for you! We are honored to partner with you to support your clients’ efforts to achieve meaningful, well-informed, and enduring impact—separate and distinct from purely tax-driven outcomes.

–Your community foundation

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What’s new in the numbers: A checklist for charitable tax rules in 2026

Well before 2025 made way for 2026, you were no doubt already tracking the various IRS thresholds that are subject to adjustment, as well as the new tax laws’ impact on planning techniques. But have you thought about how each of these thresholds might relate to your clients’ charitable giving? Here are pointers to keep handy as you inform your clients about changes in 2026 and help them tee up their charitable giving plans for the coming year.

Social Security COLA increases

The Social Security Administration announced a cost-of-living adjustment (COLA) increase effective January 1, 2026. This increase reflects inflation’s trajectory and affects many retirees who also engage in philanthropy.

Importance to charitable giving: Retirees are a unique group when it comes to tools and techniques related to charitable giving. Given that a high percentage of older cohorts give to charity each year, discussing your clients’ Social Security benefits is a logical juncture to also bring up charitable giving plans for 2026 and beyond.

Standard deduction increases

For tax year 2026, the standard deduction increased to $16,100 for single taxpayers, $24,150 for heads of households, and $32,200 for married couples filing jointly.

Importance to charitable giving: The standard deduction is a key factor in charitable giving strategies. If a client’s total itemized deductions—including charitable gifts—exceed the standard deduction, they are eligible to itemize. Reviewing this threshold and considering a “bunching” strategy (accelerating multiple years of giving into one tax year) can help maximize charitable support through 2026 and beyond.

Tax brackets

Though the tax rates remain at a range from 10% to 37%, the income levels that define each bracket for 2026 have shifted. 

Importance to charitable giving: Examining tax brackets with clients presents a timely opportunity to discuss their charitable giving strategies. With the new limitations on itemized deductions that took effect in 2026 (specifically the 0.5% floor and the 35% cap), it’s important to help clients plan carefully so that their philanthropy remains tax-efficient.

Qualified Charitable Distributions (QCDs)

For tax year 2026, the per-taxpayer limit for Qualified Charitable Distributions (QCDs) has been increased for inflation to $111,000, up from $108,000 in 2025. And, the limit for a one-time QCD from an IRA to a split-interest vehicle has been adjusted for inflation to $55,000, up from $54,000. 

Importance to charitable giving: Because clients age 70 ½ or older can direct IRA distributions to charity without including them in taxable income (a “Qualified Charitable Distribution”), these clients can reduce their AGI and, if applicable, satisfy all or part of their required minimum distributions (RMDs). A QCD to a qualified fund at the community foundation (such as a designated or field-of-interest fund but not a donor-advised fund) remains one of the most tax-efficient ways to support charity. 

Non-itemizer charitable deductions

Beginning with tax year 2026, a single-filer taxpayer who does not itemize deductions will be allowed to deduct up to $1,000 in cash donations to qualified charities (excluding donor-advised funds and private foundations). Non-itemizing joint filers may deduct up to $2,000. 

Importance to charitable giving: Despite the relative inflexibility of the new deduction (e.g., gifts of appreciated stock don’t count and neither do gifts to donor-advised funds), nevertheless, this provision for non-itemizers could help encourage people to begin their charitable giving journey, especially in the case of young professionals. To that end, you might consider mentioning this new deduction to your high income-earner clients who have adult children. The community foundation can help by offering non-donor-advised fund options to receive the $1000 or $2000 gifts as well as offer opportunities for family learning and hands-on involvement. 

As 2026 gets into full swing, please reach out to the community foundation team! We are honored to be your first call on all matters related to charitable giving. Thank you for the opportunity to help you serve your clients! 

Keep going: Why donor-advised funds are still essential

For many CPAs, estate planning attorneys, and financial advisors, the end of 2025 brought a whirlwind of charitable planning activity among high-earner clients. That’s because many taxpayers wanted to maximize the tax benefits of their charitable donations before the 0.5% “floor” and 35% “cap” on charitable deductions kicked in on January 1, 2026 under new tax laws. Donor-advised funds in particular played a big role in many late-2025 planning strategies because affected taxpayers could transfer assets to a donor-advised fund in 2025, achieve optimal tax results, and then thoughtfully recommend grants to favorite charities from the donor-advised fund in 2026 and beyond.

So what now? Should you still recommend that your clients establish and use donor-advised funds at the community foundation to organize their charitable giving?

Absolutely yes! Donor-advised funds remain a highly relevant and strategic tool for your clients. The IRS’s new deductibility limits may reduce the marginal tax benefit of giving for some of your clients, but nothing has changed about the donor-advised fund’s broader planning advantages for all of your charitable clients. Here’s why:

–Fundamentally, regardless of tax benefits, your clients’ charitable intent is driven by values, legacy, and a desire for community impact. (No one gives away a dollar to save 35 cents!) That’s why you want to offer your clients the most effective charitable planning vehicles available to achieve charitable goals. A donor-advised fund at the community foundation often plays a crucial role in a client’s overall philanthropy structure. Here’s why:

–A donor-advised fund still allows clients to separate the timing of their charitable deduction from the timing of their actual grants to favorite charities, thereby preserving flexibility in years when income is unusually high or coming in handy when planning around liquidity events, even if the deduction is partially constrained under new laws.

–Community foundation donor-advised funds, in particular, provide benefits that extend well beyond the tax code. That’s because of our team’s local expertise, deep knowledge of regional nonprofits, and ability to help your clients align their giving with real community needs. 

–When you work with the community foundation, you can confidently recommend a donor-advised fund because you know the client will receive administrative simplicity, top-notch service, and plenty of opportunities for deep community connections and multigenerational philanthropy. 

In short, donor-advised funds at the community foundation support your clients’ holistic wealth and legacy planning goals. The community foundation makes it easy for you, as the advisor, to integrate a donor-advised fund into a client’s estate plan, use a donor-advised fund to smooth charitable giving over time as a client’s income ebbs and flows, and lean on the donor-advised fund as a platform for strategic philanthropy that can evolve alongside a client’s unique life and financial circumstances.

Case study: A QCD conversion in action

If you know the basics of Qualified Charitable Distributions (QCDs) but have a hard time envisioning exactly what to say and do when they come up in a client conversation, you are not alone! Whether you are an attorney, CPA, or financial advisor, at some point you will find yourself in the middle of a QCD conversation. Here’s a case study to help you be prepared. 

Margaret, a 74-year-old widow and longtime client of your practice, scheduled a meeting early in the year to discuss her charitable giving plans. In the email Margaret sent to set up the meeting, she mentioned that she was now taking required minimum distributions from her IRA and her taxable income was higher than she expected or needed. 

As you reviewed Margaret’s file prior to the meeting, you were reminded that Margaret had established a donor-advised fund at the community foundation several years ago. You recall from prior conversations that Margaret not only has enjoyed using the donor-advised fund to organize her charitable giving to dozens of favorite charities, but she’s also appreciated the many opportunities to tap into the community foundation’s events and educational opportunities. 

Margaret arrived at your office, and after catching up on each other’s lives lately, Margaret said, “I’ve read about this thing called a Qualified Charitable Distribution. If I’m going to give to charity anyway, I want to understand whether doing a QCD in 2026 makes sense, especially if I want the gift to go through the community foundation where I already do all of my giving.”

You nod and explain that a QCD does indeed allow individuals like her who are age 70 ½ or older to transfer funds directly from an IRA to a qualified charity without including that amount in taxable income. You mention that this can be especially powerful after age 73, when required minimum distributions begin, because the QCD can satisfy all or part of the RMD while keeping adjusted gross income lower. “This can help address Medicare premiums, taxation of Social Security, and overall tax efficiency,” you continue. “With the annual QCD limit increasing through inflation adjustments to $111,000 in 2026, it’s a timely strategy to consider.”

Margaret was glad to hear all of this. Then she asked, “I already have a donor-advised fund at the community foundation. Can I simply direct my QCD straight into that fund?” You are prepared for this question! It is a common point of confusion. “That’s a great question, and you’re not alone in asking it,” you reply. “Under current IRS rules, unfortunately, QCDs can’t be made to donor-advised funds, even if they’re housed at a community foundation.”

Seeing her puzzled expression, you continue with a broader explanation. “QCDs are limited to certain types of charitable recipients,” you say. “They can go directly to public charities that are ‘operating’ nonprofits, and in limited cases to certain split-interest arrangements like a charitable gift annuity or a charitable remainder trust, subject to specific rules. Donor-advised funds are excluded, evidently because the IRS does not want the money to flow into account where the taxpayer retains advisory privileges. Donor-advised funds are of course entirely dedicated to charity, so the rule does not make a lot of sense. Yet here we are.”

Margaret frowned slightly. “That feels frustrating,” she said. “I love the donor-advised fund because it gives me flexibility and lets me support multiple causes over time.” You acknowledged her concern. “I understand. The good news, though,” you say, “is that the community foundation offers other types of funds that do qualify for QCDs and can still accomplish many of the same goals.”

You go on to explain that instead of directing the QCD to her donor-advised fund, Margaret could direct the QCD to a designated fund at the community foundation that supports specific charities she already knows she wants to help, or to a field-of-interest fund focused on causes she cares about deeply, such as education or the arts, or to an unrestricted fund to support the community as a whole. “Those types of funds are fully managed by the community foundation, without your advisory role after setup,” you say, “which makes them eligible recipients of a QCD while still aligning with your charitable intentions.”

Margaret paused, considering the options. “I don’t want to make the wrong choice,” she said. “I also want to be sure the fund is set up properly and really reflects what I care about.” You agree that is exactly the point where collaboration matters most. “This is where I’d recommend looping in the community foundation,” you say. “They can help us think through which type of fund fits best, provide a fund agreement document, and enable me to fulfill my professional duty to ensure that the structure complies with QCD rules.”

You go on to suggest a joint meeting with a community foundation representative. “The community foundation knows the nuances of the fund options and the local charitable landscape,” you explain. “That’s a great match for the legal and tax obligations on my side of the transaction. Together we can help ensure that your QCD in 2026 is clean, compliant, and aligned with your values.” Margaret smiled, clearly relieved. “That makes sense,” she said. “I don’t want this to be just about taxes. I want it to be meaningful.”

By the end of the meeting, you and Margaret have agreed on next steps: you said you would review Margaret’s IRA custodian requirements for executing a QCD, and the community foundation will set up a fund to receive the distribution. The plan will allow Margaret to use her required minimum distribution to support the community she loves, reduce her taxable income, and create a charitable structure she feels confident about.

As Margaret leaves your office, you can tell that she feels reassured that she didn’t have to navigate the rules alone. The conversation had clarified not only why a QCD in 2026 made sense for her financially, but also why working collaboratively with you and the community foundation was essential. Together, you and the community foundation can turn a confusing tax rule into a thoughtful charitable strategy that supports both Margaret’s personal financial goals and the broader community she intends to impact.

If Margaret’s situation sounds familiar, or if you anticipate any type of charitable giving conversation with a client, the community foundation is here for you! We are always happy to collaborate as you explore solutions to achieve your clients’ charitable goals. In nearly every situation, the community foundation can help. At the very least, we will point you in the right direction. Thank you for the opportunity to work together! 

Pro Tip

As you talk with clients over the coming weeks, keep in mind that tax laws are always subject to change–and sometimes for the better. Case in point related to Margaret’s situation? A small, bipartisan tax law change has been proposed that would allow Qualified Charitable Distributions into donor-advised funds. Fingers crossed!

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Last call for tax planning, locking in clients across generations, and planning for incapacity

Happy holidays from the community foundation! 

As we reflect on the year that is coming to a close, we are struck by just how many wonderful attorneys, CPAs, and financial advisors we’ve worked with in 2025. Thank you! The team at the community foundation appreciates every call, every email, and every meeting where we can help you serve your philanthropic clients.

As always, we are happy to share what’s trending in the world of charitable giving. We keep a close eye on developments impacting charitable giving and in turn relay that information to you, which saves you time as you keep up with everything else related to your clients’ tax, financial, and estate planning matters.

Here’s what’s trending:

—It’s down to the wire! By now you’re of course aware that 2025 is a crucial year to act on charitable planning before changes in the tax laws take effect in 2026, especially for clients who itemize deductions. Take advantage of the remaining window of opportunity to advise your clients, and lean on the community foundation to help set up donor-advised funds and other charitable giving structures.

—As families gather together around the holidays, keep in mind that it’s a good time to suggest that your clients consider multi-generational family philanthropy strategies. Relationships are key to advisors’ retaining children and grandchildren as clients when parents pass away. The community foundation can help you incorporate charitable giving as a thread to connect generations and preserve long-term relationships.

—Sadly, an uptick in incapacity and undue influence disputes are making it even more important to document clients’ charitable intentions while you’re also documenting estate and financial plans. The community foundation is happy to share concrete suggestions for ways to record intent across wills, trusts, beneficiary designations, and incapacity instructions to reduce ambiguity and conflict related to clients’ philanthropic priorities.

As always, we are grateful for the opportunity to work together! Enjoy the holidays, and thank you for all you do for our community.  

–Your community foundation

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2025 action required: Last call for current tax rules

As you counsel clients through year-end tax planning, the community foundation encourages you to remind them that 2025 presents a critical window of opportunity for charitable giving before major provisions of the One Big Beautiful Bill Act (OBBBA) take effect on January 1, 2026. The new law could significantly reshape the tax treatment of charitable contributions in ways that may reduce the tax value of gifts made after this year. 

Here are three things you need to know:

–Beginning with the 2026 tax year, clients who itemize will face a new 0.5% of adjusted gross income floor for charitable deductions, meaning that only the portion of their giving that exceeds that threshold will be deductible. In addition, high-income clients will see the value of their deductions capped at 35 cents on the dollar, even if they are in a higher marginal tax bracket. 

–Your clients may be aware of another new law effective in 2026 allowing taxpayers who take the standard deduction to claim a modest “above-the-line” charitable deduction—up to $1,000 for single filers and $2,000 for married couples filing jointly. While helpful, this limited deduction provides far less benefit than itemizing under current rules. 

–Because of upcoming changes, 2025 is shaping up to be an especially important year for charitable planning. Your clients who itemize their deductions may benefit from “accelerating” or “bunching” contributions into their donor-advised funds at the community foundation this year to take full advantage of the current, more favorable rules. 

Here are two bonus “must-knows”: 

–The OBBBA did not change the rules for Qualified Charitable Distributions, which continue to allow individuals aged 70½ or older to give up to $108,000 in 2025 directly from an IRA to an eligible charity, bypassing taxable income and counting toward required minimum distributions (if applicable). Certain types of funds at the community foundation, such as designated funds, unrestricted funds, field-of-interest funds, and scholarship funds (but not donor-advised funds), may receive QCDs.

–Because a QCD reduces adjusted gross income rather than functioning as an itemized deduction, it will remain unaffected by the OBBBA’s new 0.5% AGI floor and the 35% cap that will apply to itemized charitable deductions starting in 2026. As a result, QCDs may become even more valuable next year, offering a tax-efficient charitable giving option at a time when traditional deductions will be more limited for some of your clients. 

Our team at the community foundation is here to support you as you help clients navigate these shifting rules. We are happy to serve as a resource for evaluating giving strategies, structuring multi-year plans, and helping clients use tools such as donor-advised funds, designated funds, or field-of-interest funds to make the most of their 2025 contributions. Please reach out as soon as you can. We are honored to collaborate with you in serving your charitably minded clients to achieve year-end giving goals. 

A key to client retention: Consider charitable planning

​​Retaining clients is a cornerstone of long-term business success, no matter the profession or industry. As the saying goes, keeping an existing client—and earning additional work from that client—is far easier and more cost-effective than securing a new client. For professionals who work in estate, tax, and financial planning, this principle becomes especially important during one of the most delicate stages of engagement: the period following a client’s death.

Attorneys, accountants, and financial advisors know quite well that after a client passes away, many planning strategies are set in motion and, simultaneously, emotions run high and families are adjusting to loss. This combination can make it challenging to transition relationships to the next generation. The statistics underscore just how steep this challenge can be. Indeed, some sources indicate that fewer than 20% of heirs continue working with their parents’ advisor after inheriting assets.

The answer, or course, is to build relationships with the client’s children long before the estate becomes active. Advisors can employ many thoughtful methods—inviting children to appropriate meetings, sending personal notes, or offering career guidance. Yet few topics open the door quite as meaningfully as philanthropy. For most families, inheritances represent more than financial transfers; they embody values, purpose, and the story of how the family built its resources. Conversations about charitable giving naturally lead to discussions about legacy, priorities, and shared commitments across generations.

This is where the community foundation can be especially valuable. Our team helps advisors create opportunities for clients and their children to explore philanthropy together. You can encourage families to establish simple, effective giving vehicles through the community foundation—such as a donor-advised fund, designated fund, or field-of-interest fund—that make charitable participation accessible to every generation. You can also connect them with our family-focused services, including research on favorite causes, curated site visits to local nonprofits, and educational conversations about community needs and charitable giving strategies. We also provide materials to help families understand tax-efficient giving, such as the advantages of contributing appreciated stock to avoid capital gains tax.

What’s more, estate planning and wealth advisors frequently ask us to facilitate family discussions so younger generations can understand and carry forward the causes their parents and grandparents have long supported, while also identifying new areas that reflect their own interests or values. These conversations are powerful. They deepen family identity, strengthen intergenerational ties, and help advisors stay connected to the entire family for years to come.

Any thoughtful engagement with a client’s next generation improves the chances of maintaining the relationship across transitions. But philanthropy, in particular, provides a uniquely meaningful avenue to build trust, spark conversation, and ensure continuity—keeping your clients’ families engaged with you long after wealth transfers from one generation to the next.

Please reach out anytime! We look forward to helping you keep your clients for many years to come! 

Planning for clients’ incapacity: Why charitable intentions matter 

The team at the community foundation is honored to work with attorneys, CPAs, and financial advisors to help clients turn generosity into lasting impact. Of course, as you work with your charitable clients, you routinely determine the best way to incorporate philanthropic intentions into wills, trusts, and beneficiary designations. But how frequently do you document clients’ charitable intentions explicitly as part of incapacity planning?

Sadly, incapacity is no longer a rare edge case. Longer lifespans, higher rates of dementia, and more complex family structures are increasing the time period when your clients’ decisions may be made by agents, trustees, or caregivers rather than clients themselves. Indeed, courts and advisors are seeing more estate and trust disputes rooted in lack of capacity and undue influence, especially when late-stage changes to an estate plan take heirs by surprise. Notably, a recent industry overview describes a surge in challenges to last-minute trust amendments, typically framed around diminished capacity or pressure from a third party.  

Against this backdrop of a looming incapacity crisis, because charitable goals are values-driven and not necessity-driven, many families default to immediate needs and may ignore a loved one’s charitable intentions if they are not clearly documented. This gap is exacerbated by the reality that charitable intent is often easier to reinterpret than most planning objectives. If a file says only “she cared about education,” for example, heirs can disagree on what that means or whether it still applies. What’s more, a significant charitable gift made late in life without documented context may look suspicious to disappointed beneficiaries, inviting capacity or undue influence claims. 

The community foundation can help! As you are putting together incapacity plans for clients, we are happy to provide suggestions for how to clearly document clients’ charitable intentions, including:

–Specific bequest language in wills or trusts, including gifts to clients’ donor-advised or other types of funds at the community foundation;

–Incapacity-ready giving instructions, including continuing annual gifts if capacity declines and the conditions under which an agent under a durable power of attorney can pause them;

–Ideas for aligning intentions across all instruments, including trusts, wills, retirement and insurance beneficiary designations, and business succession plans; and

–A contemporaneous statement of charitable intent to be maintained with the plan files, showing consistency over time and rationale for giving.

The point here is that clarity protects your clients’ values and reduces the ambiguity that heirs often seize on in disputes. The community foundation team is happy to help your clients’ generosity survive cognitive decline, family conflict, and the rising wave of capacity-based challenges. We look forward to working together!  

Urgent needs, tax law changes, and opportunities for charitable giving

Greetings from the community foundation! 

Your clients are likely aware that many families are struggling right now, and some clients may ask for your advice about how they can help. Whether increased community needs are triggered by a government shutdown that disrupts paychecks, services, and community programs, a natural disaster, or economic factors, the community foundation is committed to working alongside you and your clients to structure charitable giving plans that make a real difference in the lives of people in our region. 

Here are a few examples of how our team can help:

Deep community knowledge. The team at the community foundation has its finger on the pulse of which organizations specifically are serving families in crisis. As federal employees and contractors grapple with missing income, and federal benefits become uncertain for families in need, charities in our community can be stretched thin attempting to meet the rising demand for food, rent, and utility assistance. The community foundation knows where dollars are most needed and how those dollars translate into immediate impact.

Fast, flexible vehicles. Your clients who have already established donor-advised funds at the community foundation can use those vehicles to provide support to charities on the front lines of emergency assistance in our community. The community foundation makes it fast and easy for grants to flow out of donor-advised funds to qualified and vetted organizations that are doing the work on the ground. NOTE TO COMMUNITY FOUNDATION: ADD A “LEARN MORE” LINK TO THE IN-DEPTH ARTICLE BELOW, WHICH YOU CAN ADD TO YOUR BLOG OR WEBSITE.

Window of opportunity. The urgency of community needs in late 2025 coincides with an important window of opportunity for your clients who itemize their income tax deductions. Under the One Big Beautiful Bill Act (OBBBA), limits on charitable deductions will tighten beginning in 2026. That means clients who can “front-load” or “bunch” contributions—such as by giving more this year through establishing or adding to a donor-advised fund—can maximize both their tax benefits and their impact. NOTE TO COMMUNITY FOUNDATION: ADD A “LEARN MORE” LINK TO ONE OF THE IN-DEPTH ARTICLES IN RECENT NEWSLETTER CONTENT, WHICH YOU CAN ADD TO YOUR BLOG OR WEBSITE.

Build future resiliency. Unfortunately, community crises are not unusual. The community foundation can help your clients strengthen our community’s ability to respond to urgent needs, regardless of when and why they occur. For this reason, many people not only give to favorite charities through their donor-advised funds, but they also give regularly to the community foundation’s dedicated response funds to ensure that dollars are in place to support people in need the moment the next crisis hits. This technique might appeal to many of your clients.  NOTE TO COMMUNITY FOUNDATION: ADD A “LEARN MORE” LINK TO DIRECT READERS TO A PAGE ON YOUR WEBSITE DESCRIBING YOUR EMERGENCY RESPONSE FUND OR SIMILAR FUND.

What’s more, November 12 through 18 marks National Community Foundation Week, a time set aside to recognize the vital role community foundations play in strengthening local philanthropy and supporting the charitable goals of individuals, families, and businesses. For attorneys, CPAs, and financial advisors, it’s an ideal reminder that the community foundation is your partner in helping clients achieve both their financial and philanthropic objectives. Across the country, more than 800 community foundations serve as trusted stewards of charitable capital, offering donor-advised funds, legacy planning expertise, and deep knowledge of local nonprofits and community needs. During Community Foundation Week, we celebrate this collaborative work, and we invite you to reach out to learn how we can help you structure charitable giving plans that maximize tax benefits for your clients while creating lasting impact right here at home.

It is our honor to work with you and your charitably-minded clients. Thank you for the opportunity! 

–Your community foundation

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Donor-advised funds: Flexible, tax-friendly, and just the beginning

As attorneys, CPAs, and financial advisors, you’ve no doubt noticed that financial publications’ coverage of donor-advised funds is increasing. This is no surprise, considering that these popular vehicles can help your clients achieve both their financial and philanthropic goals. 

What many advisors don’t realize is that a donor-advised fund at the community foundation is not only useful as a standalone tool, but even more importantly, it can serve as the flexible foundation of a client’s overall charitable giving portfolio. Here’s how this works:

Organize annual giving 

Fundamentally, a donor-advised fund offers a centralized way for a client to manage gifts of cash, appreciated stock, and other assets while maintaining flexibility in timing grant distributions to favorite charities. This flexibility is especially important for some clients as a planning tool in 2025 before the new floor and cap kick in next year on itemized charitable deductions. “Bunching”—or front-loading—multiple years of charitable contributions into a donor-advised fund this year can create meaningful tax advantages and provide a ready reserve of philanthropic capital for years to come.

Wide range of tools and resources

The donor-advised fund itself is just the beginning! Beyond enjoying convenience and tax efficiency, your clients who establish donor-advised funds at the community foundation can work closely with our knowledgeable team to access even more charitable giving resources and vehicles that align with your clients’ charitable goals.

Community impact

The community foundation’s deep understanding of local nonprofits and community priorities can help clients enhance their engagement and impact. Our team provides insights, research, and connections that help your clients understand where their dollars make the most difference—turning charitable intent into meaningful outcomes.

A variety of fund types

The community foundation offers a wide range of options beyond just donor-advised funds. A designated fund, for example, enables your client to provide long-term support to specific organizations. A field-of-interest fund targets specific causes your client cares about that are being addressed in the community by several nonprofits and sometimes even by the community foundation itself. 

Giving from IRAs

A client who is 70½ or older can transfer Qualified Charitable Distributions (QCDs), up to $108,000 per taxpayer (2025 IRS limit), from IRAs to a designated, field-of-interest, or unrestricted fund at the community foundation, and in the process, bypass taxable income.

Legacy strategies

The community foundation team is happy to help you integrate legacy planning strategies into clients’ charitable giving portfolios. Whether through bequests in wills and trusts, or through beneficiary designations on life insurance or retirement accounts, naming a donor-advised or other fund at the community foundation allows your clients’ charitable intentions to extend across future generations. The community foundation offers ongoing support and stewardship, ensuring clients’ charitable intent is preserved and aligned with evolving community needs over time.

What’s the bottom line here? Partnering with the community foundation helps your client’s  donor-advised fund function not only as a tax-efficient giving vehicle, but also as the dynamic, flexible foundation of a comprehensive charitable portfolio—built to adapt through changing tax environments and community priorities.

Bread and butter strategy: QCDs for clients 70½ and older

As the economic and legislative environment continues to evolve, advisors are sharpening every tool they have to help clients meet both their financial and charitable goals. Provisions enacted as part of the One Big Beautiful Bill Act (OBBBA) are prompting renewed focus on strategies that merge tax efficiency with meaningful community impact. Among the most powerful tools in this space for clients aged 70½ and older is the Qualified Charitable Distribution, or QCD.

IRA assets in the United States total nearly $18 trillion, and the vast majority of your clients likely own at least one IRA. You’re likely very aware that traditional IRAs are among the most heavily taxed assets for retirees because withdrawals are generally treated as ordinary income, often pushing retirees into higher tax brackets when they begin taking required minimum distributions at age 73. In addition, IRAs are fully includable in the owner’s taxable estate, meaning heirs may face both estate taxes and income taxes when they inherit the account. This double layer of taxation can significantly erode the value of an IRA, making it one of the least tax-efficient assets to pass to beneficiaries compared to other holdings. 

Against this backdrop, the QCD can come in very handy. A QCD allows an individual aged 70½ and older to give up to $108,000 in 2025 directly from an IRA to an eligible charity. As a result, the QCD is a tax-savvy way for clients to fulfill charitable intentions while managing taxable income.

Here’s why QCDs are more important now than ever:

–Although the OBBBA doesn’t directly change QCD rules, it’s likely to make them even more relevant. The reason is that QCDs reduce adjusted gross income (AGI) rather than operating as an itemized deduction. That distinction is crucial because the OBBBA will continue to influence how many taxpayers itemize, particularly older adults.

–Because a QCD can count toward required minimum distributions (RMDs) without increasing taxable income, it provides a double benefit: supporting charitable organizations while helping to manage income-related Medicare surcharges (IRMAA) and preserving tax credits and deductions that phase out as AGI rises.

–Starting in 2026, under the OBBBA, the Internal Revenue Code will impose a 0.5 percent of AGI floor for deducting charitable contributions, and also limit the value of those deductions for high-income taxpayers by capping the benefit at 35 percent, even when the taxpayer’s top marginal rate is 37 percent. The practical impact is that your high-income-earning clients will experience reduced tax advantages from traditional itemized charitable deductions in the years ahead.

The team at the community foundation can help you structure a QCD that supports the causes your clients care about—whether through a field-of-interest, designated, or unrestricted fund. While donor-advised funds can’t receive QCDs, many families work with the community foundation to maintain multiple types of funds side by side, often pairing the flexibility of a donor-advised fund with a fund that can receive QCDs.

Now is the time to revisit these strategies with your clients. Together, we can help them give meaningfully, reduce tax exposure, and continue to make an impact in the community we all love.

Rare but powerful “charitable exits”: Know it when you see it 

If your client base includes business owners, you’re no doubt at least generally aware of the benefits of giving closely-held business interests to charity. Beyond that, though, the details may get fuzzy. That is totally understandable! Most advisors encounter only a few of these opportunities over an entire career. The key is to be able to recognize the opportunity so you can reach out to the community foundation team to help you make the most of it for your client.

Let’s take a look at how this plays out for a hypothetical client, Alex Monroe, who may have a few things in common with your actual business owner clients.

–When Alex began considering selling his company, he mentioned it only casually to you. But you knew enough to listen carefully because you know Alex has given generous gifts to several favorite charities over the years. You re-familiarized yourself with the community foundation in anticipation of the ongoing conversation with Alex.   

–You also know that the value of Alex’s company has grown substantially over the years, accumulating significant unrealized capital gains for Alex. If Alex sold now without additional planning, a large portion of the proceeds would go toward capital gains tax, potentially eroding the value he had worked so hard to build. 

–Some business owners in Alex’s position would rush into the exit process with their advisors by putting feelers out to potential buyers, determining an asking price, jumping to establish a letter of intent with a leading suitor, and in the process, missing strategies that could improve their post-sale outcome.

–In Alex’s case, though, you suggest involving the community foundation early in the process. You shared with Alex that it’s worth considering giving a portion of the company’s shares to a donor-advised fund at the community foundation before any formal sale activities begin. 

–You explain to Alex that by making this charitable gift well in advance of the eventual sale, the shares owned by the donor-advised fund will not trigger capital gains for Alex. Instead, the donor-advised fund will receive the proceeds free of capital gains tax and ready to deploy toward Alex’s philanthropic goals. What’s more, this technique delivers an estate tax advantage by removing the gifted portion of the business from Alex’s taxable estate.

Whether you encounter a situation like Alex’s once, twice, or dozens of times during your career, the most important tip to remember is to reach out to the community foundation team during the very early stages of planning a client’s business exit. Transactions like this take time and also require navigating a few pitfalls. For example:

–Obtaining a qualified appraisal is crucial in order to comply with IRS rules for charitable deductions for gifts of non-cash assets. Failure to strictly comply with IRS rules could wipe out the tax deduction. 

–For this type of transaction to avoid capital gains tax, it is important that no formal discussions about the sale, no shareholder vote approving a transaction, and no signed letter of intent are in place before the gift of shares. Otherwise, the IRS may disallow the charitable deduction.

–These transactions are typically much more effective when the stock is given to a public charity, such as the community foundation, rather than a private foundation. Unfortunately, some tax advisors are not aware of the significant differences in the tax benefits of giving closely-held business shares depending on the IRS status of the receiving entity. And of course, the community foundation reviews each potential gift carefully to ensure compliance and feasibility.

One of these days, whether it’s next week or six years from now, you’ll likely encounter a charitably-minded business owner who decides it is time to explore selling the business. In that situation–and in any other situation involving charitable giving–the community foundation is honored to be your first call. 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Reasons to celebrate, a charitable solution for inherited IRAs, and three mini-case studies

Hello from the community foundation, and happy October! 

It is hard to believe that the fourth quarter is upon us. We look forward to working with you and your clients as you set in motion charitable giving plans with an eye toward that end-of-year deadline.

Here’s what’s trending in our world:

–There’s already a lot going on in October, and you can add DAF Day to the mix, as well as National Estate Planning Week. Both of these annual events are promoted nationally, and your clients are likely to hear about them. The community foundation is happy to offer tips to help you tap the momentum to inspire your clients to update their financial plans, estate plans, and charitable giving strategies. 

–You are not alone if you miss the old “stretch IRA.” Many attorneys, CPAs, and financial advisors recommended this technique to help the heirs of their deceased clients avoid a big income tax hit. For a specific type of client, though, it may be possible to mimic the benefit of the stretch IRA by using a charitable remainder trust.

–No two of your clients are exactly alike, which is why you tailor your advice to the specific circumstances of each client’s life, finances, and goals. For inspiration, we’re happy to offer three examples of client scenarios and how the community foundation can work alongside you to help handle the charitable components of a client’s plan. 

Thank you so much for the opportunity to work together. We are grateful! 

—Your community foundation 

THIS MONTH’S

TRENDING TOPICS

Two reasons to celebrate charitable giving*

*And three steps to engage your clients

by Staff Name, Director of Charitable Giving

There’s a lot to celebrate in October! 

National Estate Planning Week

For many attorneys, financial advisors, and CPAs, estate planning is part of your client conversations every single month, week, and day of the year. You never hesitate to remind clients to update their wills, trusts, and financial plans as circumstances change in their lives. 

Even though you remind your clients regularly about the importance of having an updated estate plan, still, estate planning winds up at the bottom of many to-do lists. That’s why it is very helpful when clients are motivated by reminders from other sources that validate what you tell them on a regular basis. Such is the case with National Estate Planning Week, which falls between October 20 and 26 this year. This is a great time to check in with clients not only related to the estate plan provisions for distributions to their heirs, but also the provisions in their estate plans to leave a gift to one or more charities. 

The community foundation is here to help! Here are three suggested steps for making the most of National Estate Planning Week with your clients. 

Use the OBBBA as an ice breaker

First, remind clients that the One Big Beautiful Bill Act has changed the landscape for charitable deductions, especially for your clients who have been in a gray area in recent years as to whether or not they itemize their deductions. For high income earners, 2025 presents opportunities to “front load” charitable deductions through a donor-advised fund at the community foundation before the floor and cap kick in next year.

Bridge the conversation to estate gifts

Second, while you are on the subject of charitable giving, remind your clients that now is a perfect time to check in on their plans to include gifts to charity in their wills, trusts, or beneficiary designations. Clients will appreciate refamiliarizing themselves with the provisions they’ve already included. If a client has not yet arranged for a legacy gift to charity, and the client makes regular charitable gifts each year, evaluate whether it also makes sense to include an estate gift. Many clients who are very philanthropic during their lifetimes simply have not stopped to consider this idea and will welcome the discussion.

Call the community foundation

Third, lean on the team at the community foundation to help your client create a “portfolio” of charitable giving strategies aligned with both the client’s charitable intentions as well as the client’s estate planning and financial goals. As a client’s “home” for charitable giving, our team can customize and coordinate a series of vehicles to achieve a client’s charitable goals, including a donor-advised fund to organize giving and help navigate the opportunities triggered by the One Big Beautiful Bill Act, a designated fund to receive Qualified Charitable Distributions for clients who are over 70 ½, annual support for the community foundation’s initiatives, and documenting your client’s intentions for an estate gift to the community foundation

DAF Day 2025

There’s more to celebrate! 

Attorneys, CPAs, and financial advisors who work with charitably inclined clients should know about DAF Day 2025 on October 9 because it highlights the powerful role donor-advised funds (DAFs) play in philanthropy. 

Take advantage of this national moment and timely opportunity to introduce your clients to the idea of establishing a donor-advised fund at the community foundation. Of course, donor-advised funds are known for helping your clients streamline giving, maximize charitable deductions, and align with estate and tax planning strategies. 

What’s even better, though, is that when your clients set up a donor-advised fund at the community foundation, they are tapping into a well-respected, dedicated local resource that has its finger on the pulse of our community’s needs and which charities are addressing them. Our team is here to help you strengthen your client relationships and ensure that your clients’ philanthropy is both meaningful and strategically effective through not only donor-advised funds, but many, many other vehicles to achieve clients’ estate planning and their community impact goals.

We look forward to working with you and your clients in October … and in every single month of the year. Thank you for your partnership. 

Inherited IRAs: A charitable solution?

by Staff Name, Director of Charitable Giving

Remember the good old days when your clients could withdraw the money they inherited in their parents’ IRAs over the course of their lifetimes, thereby deferring the income tax for as long as possible? This so-called “stretch IRA” was largely eliminated by the SECURE Act of 2019, requiring most non-spouse beneficiaries to withdraw the entire inherited IRA within 10 years, rather than stretching withdrawals over their lifetime. 

For a very specific subset of your clients, however, there may be an alternative. Here is the ideal fact pattern:

–Your client owns an IRA

–Your client is very philanthropic, and charities are prioritized in the client’s estate plan even where the client has children or other heirs.

–Your client has identified a young, healthy heir to whom the client would like to leave a legacy gift

–This heir is likely to be in a high income tax bracket in the years ahead and wants to defer income tax wherever possible

The concept, oversimplified for illustration purposes, goes something like this: 

–Instead of naming the heir directly as the beneficiary of the IRA, your client instead would name as beneficiary a charitable remainder unitrust, referred to as a CRT, or even a “NIMCRUT” (net-income make up charitable remainder unitrust), of which the heir is the income beneficiary.

–The CRT would receive the IRA proceeds upon your client’s death.

–The tax result of this structure somewhat mimics the old stretch IRA because, as a charitable entity, a CRT does not itself get hit with income tax on the income from the IRA. 

–According to the terms of the CRT, the assets can be distributed annually over the heir’s lifetime (or for a fixed period of up to 20 years) and, similar to what would have happened with the old stretch IRA, the heir will pay income taxes on distributions from the trust as they are received.

So why doesn’t everyone do this? Here are three reasons:

–It’s actually possible for an heir to be too young for this technique to work well. The IRS requires that a CRT’s pay-out rate result in a present value of the future gift to charity of at least 10% of the value of the initial gift. This means that the pay-out rate could be too low to justify the expense and hassle of the transaction where the CRT’s income beneficiary is very young.  

–There is always a risk that the heir will die prematurely, sending the entire remainder interest to the charity with nothing remaining to pass to the heir’s own heirs. 

–Even when compared with the 10-year rule, it can take a very long time for the CRT’s tax benefits (i,e., more wealth) to outweigh the projected “loss” of the assets that will ultimately go to charity.

What’s the bottom line here? If your client is truly charitable, they may be better able to fulfill their charitable goals by naming a charity, such as the client’s fund at the community foundation, as the beneficiary of the client’s IRA, leaving other assets eligible for the step-up in basis to fund the estate gifts for heirs. 

As always, the team at the community foundation is here to help! Please reach out anytime.

Three clients. Three solutions. One common theme.

by Staff Name, Director of Charitable Giving

We’ve rounded the corner into the fourth quarter! As the calendar year draws to a close, you’re likely well aware that charitable giving is not only important to your clients first and foremost as an act of generosity, but also as a powerful tool in tax planning. 

Consider the following hypothetical client situations:

You want to help Emily Harper benefit from itemizing deductions.

Your client, Dr. Emily Harper, a married 62-year-old physician, has long supported many local charities with annual donations totaling around $20,000. While generous, her giving has not exceeded the standard deduction under the current tax law, which means she has received little to no tax benefit for her contributions. You’ve counseled Emily that 2026 will bring even more limitations on her ability to deduct charitable contributions.

Working with the community foundation, you are arranging for Emily to contribute $100,000 of appreciated stock this December to establish a donor-advised fund. This large, single-year contribution will allow her to itemize deductions for 2025 and maximize her tax savings, while still preserving the flexibility to recommend grants of $20,000 per year to her favorite charities over the next five years. By front-loading her philanthropy, Emily not only secured a significant deduction even under the higher standard deduction thresholds in place, but she also avoided potential exposure to the upcoming IRS “floor and cap” rules under the One Big Beautiful Bill Act.

You are worried about Jonathan Lee’s concentrated stock positions

Jonathan Lee, a 58-year-old business executive, has accumulated a significant position in a favorite stock over the past two decades. As Jonathan’s advisor, you have grown increasingly concerned about the concentration risk in his portfolio and the steep capital gains tax bill he would face if he sold shares outright. You also discovered that Jonathan has consistently supported a handful of local charities with annual cash gifts. (This made you cringe; you wish Jonathan had consulted you about giving stock versus cash.)

Working with the community foundation, you arranged for Jonathan to donate $250,000 worth of his highly-appreciated stock to establish a donor-advised fund. This move accomplished two critical objectives: it allowed Jonathan to bypass the capital gains tax on the gifted shares and made him eligible for a full fair-market-value charitable deduction for the stock’s value on the date of the gift. Now, instead of writing annual checks from after-tax dollars, Jonathan can recommend grants from his donor-advised fund over time, maintaining his giving pattern while enjoying significant tax efficiency. What’s more, by contributing stock instead of cash, Jonathan transformed a concentrated holding into diversified charitable capital.

Margaret Davis has more money in her IRAs than she’ll ever need.

Your client, Margaret Davis, is 74 years old. She continues to receive royalty income from several books she wrote over the course of her career as a successful romance novelist. Margaret also owns several IRAs. Her royalties are more than enough to cover her living expenses; she simply does not need the Required Minimum Distributions from her IRAs. You have counseled her, though, that she has to take those distributions under IRS rules.

Recently, Margaret sent you an article she read in the Wall Street Journal about Qualified Charitable Distributions, or QCDs. Truth be told, you’ve heard about QCDs, but you don’t specialize in tax planning and you simply have not had the time to get up to speed on these vehicles. But, because Margaret brought it up, you wisely dive in. 

You learn that Margaret, because she is over the age of 70 ½, can direct up to $108,000 (the 2025 limit) to qualified charities. You’ve reached out to the community foundation for help, and you are glad you did because the community foundation team is setting up a designated fund to receive Margaret’s QCDs. The designated fund, in turn, will support the local animal shelter, where Margaret has volunteered for decades, even after Margaret dies. What’s more, the QCD dollars are excluded from Margaret’s income and still satisfy a portion of her RMD. What’s more, the QCD reduces Margaret’s exposure to Medicare IRMAA surcharges—benefits that would not have accrued if she’d simply donated from after-tax cash. 

If your client base includes people like Emily, Jonathan, and Margaret, please give us a call! The community foundation is here to help. The tax benefits are terrific, but that’s not what is most important. What’s most important is that you are helping your clients fulfill their charitable objectives, making our community and the lives of the people who live here even better for generations to come. 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Big picture tax tips, IRAs and QCDs, and corporate charitable deductions

Hello from the community foundation, and happy September! 

The year is winding down, and it’s been eventful. We are honored to work with so many attorneys, CPAs, and financial advisors to help your clients achieve their charitable goals. 

As you begin to consider year-end planning for your clients, keep in mind that our team keeps you informed of developments impacting charitable planning, and in many cases, the community foundation can offer solutions. 

—We get it. Recently passed laws have thrown a curveball into the ways you approach tax and financial planning for a lot of clients. We’re breaking down the most important points from the One Big Beautiful Bill Act, building on the detail we shared in our last newsletter. 

—IRAs are excellent vehicles for many, many reasons, one of which is the role they can play in charitable giving. We’re happy to answer FAQs about IRAs, QCDs, and the OBBBA. 

—As tax advisors have had time to dig into the OBBBA’s new rules for charitable deductions, it is beginning to dawn on many that the new limits for corporate deductions may throw a wrench into a lot of clients’ plans. Learn why, and what to do about it.

Thank you for the opportunity to work together! We value our partnership.

—Your community foundation 

THIS MONTH’S

TRENDING TOPICS

One Big Beautiful Bill Act: Three big picture pointers

“So what does it mean for charitable planning, really?” That’s a question our team has been fielding from attorneys, CPAs, and financial advisors ever since the One Big Beautiful Bill Act became law on July 4, 2025. It’s an understandable question, not only because the bill is so, well, big, but also because the roller coaster ride leading up to the final bill included many provisions that ultimately did not make it into law.

From a charitable giving perspective, here is a trio of high-level “must knows.” 

“I’ll be back.”

Although the One Big Beautiful Bill Act (OBBBA) has extended or “made permanent” many favorable tax provisions, notably the elevated estate tax exemption, this is no time to become complacent. Although no one knows what future tax legislation might look like, we all know that there will be tax legislation in the future. Today’s tax advantages will not be tomorrow’s tax advantages. During this so-called “tax summer,” continue to talk with your clients about their charitable giving plans, staying alert and ready to help them make adjustments when the laws change again.

“Carpe diem.”

If your practice includes clients who give to charity, it’s crucial to get up to speed on the basics of the OBBBA’s changes to charitable tax deductions. 2025 presents a window of opportunity for your clients who itemize deductions, in part because of the OBBBA’s increases to the standard deduction in 2025 and in part because itemized charitable deductions will be subject to a floor and cap starting in 2026. “Bunching” using donor-advised funds at the community foundation is shaping up to be an important strategy this year. If you missed our last newsletter where we shared the details of these changes, please reach out. We’d be happy to send you a copy.  

“Fundamentals. Fundamentals. Fundamentals.”

Sure, a lot is changing, but a lot isn’t! Appreciated stock is still likely to be a much more tax-savvy gift to charity than cash, and it’s important to keep this top of mind. In addition, IRAs remain a powerful charitable planning tool. For instance, when your client names a fund at the community foundation as the beneficiary of an IRA, the gift avoids estate tax and income tax, both of which can hit heirs hard. Plus, for your clients who are 70 ½ or older, the Qualified Charitable Distribution (“QCD”) is a great way to transfer up to $108,000 (2025’s per-taxpayer limit) income-tax free to a qualified charity, including some types of funds at the community foundation. 

Please reach out to the community foundation team. We’re honored to be your first call when charitable giving pops up during your client conversations. Thank you for the opportunity to work together! 

Tongue twister: OBBBA, IRAs, QCDs, and FAQs 

If your head is spinning, it’s for a good reason! Let’s face it–the rules for using IRAs to give to charity were complicated before the OBBBA got thrown into the mix. Let’s address five frequently asked questions we’ve been hearing from attorneys, CPAs, and financial advisors as you counsel your charitable clients. 

“I have a lot of clients who are 70 ½ and older. I know the new tax laws are a big deal. Did the rules change for Qualified Charitable Distributions?”

This is a great question, and it’s super important. The short answer is no–the One Big Beautiful Bill Act did not directly change the IRS’s rules for Qualified Charitable Distributions, or “QCDs.” Through a QCD, a taxpayer who is over the age of 70 ½ can direct up to $108,000 (2025 limit) from an IRA to an eligible charity, including some types of funds at the community foundation.

“I can tell there’s more to the story. What else should I know to best guide my clients who are 70½ and older?”

We are glad you asked! QCDs are even more tax-savvy after the One Big Beautiful Bill Act because they bypass the new 0.5% adjusted gross income floor that will apply to itemized charitable deductions starting in 2026. Unlike other gifts, QCDs also avoid the 35% cap on deduction value for high-income taxpayers, preserving their full tax benefit. Because they reduce taxable income directly without requiring itemization, QCDs provide retirees a simple, consistent way to maximize charitable impact in a more restrictive tax environment.

“When should I call the community foundation if I have a client who is a good candidate for a QCD?”

Anytime! Several types of funds at the community foundation are eligible recipients of Qualified Charitable Distributions, including field-of-interest funds, designated funds, and unrestricted funds. Although your client’s donor-advised fund is not a permissible QCD recipient under IRS rules, our team is happy to work with you and your client to establish another type of fund alongside an existing donor-advised fund and set in motion an overall strategy that meets both the client’s financial and estate planning goals as well as the client’s goals for community impact.

“Remind me again why IRAs are such powerful legacy gifts to charity?”

Clearly, IRAs are tax-savvy savings vehicles during a client’s lifetime because contributions to traditional IRAs may be tax-deductible. Plus, the assets inside the account grow tax-deferred, allowing returns to compound. Leaving an IRA to charity at death, such as to a client’s fund at the community foundation, is also tax-savvy. The assets avoid income tax because the charity, unlike heirs, can withdraw the funds tax-free. The assets also escape estate tax because charitable bequests are fully deductible from the taxable estate. 

“Does the whole QCD have to go directly to the charity?”

No! A special type of QCD allows your client to make a “split interest” gift to either a charitable remainder trust (CRT) or charitable gift annuity (CGA). The 2025 per-taxpayer limit for this so-called “legacy IRA” is $54,000. Note that the CGA option may be the most attractive option for your clients because of the significantly greater administrative burdens of setting up a CRT. 

Please reach out to the community foundation anytime. We are happy to set up a charitable giving plan that allows your client to make QCDs to help achieve their charitable goals.

Floor to ceiling: Four factors that will influence corporate giving now and later

At the community foundation, we work with business leaders and business owners to structure charitable giving plans that achieve the company’s goals for its employees and the community. In many cases, corporate giving strategies include donating to local charities, whether directly or through a corporate fund at the community foundation. 

If you run a business, you may have caught wind of the changes to the charitable deduction rules that apply to corporations. These tips are for you! Here’s what you need to know:

A new “floor” on the deductibility of charitable donations is coming in 2026.

Starting in 2026, corporations can only deduct charitable contributions that exceed 1% of their taxable income. Donations below that threshold won’t be deductible at all. This means, for example, that a company with $100 million in taxable income must give more than $1 million to take a charitable deduction–and even then, only donations above that $1 million are eligible for a charitable deduction. Many worry that this change in the law will negatively impact corporate giving, which reached an all-time high last year. 

The “ceiling” stays in place–and it’s trickier.

The IRS’s ceiling on charitable deductions—allowing corporations to deduct up to 10% of taxable income—still applies. Starting in 2026, both the new 1% floor and the existing 10% ceiling will apply simultaneously, which makes things more complex. That means only amounts exceeding the 1% floor and up to the 10% ceiling are deductible. Both categories of “disallowed” giving can be carried forward for up to five years. In a carryforward year, the donation can only be deducted if the total giving in that year exceeds the 1% floor, and the carried-forward portion, together with current-year giving, doesn’t exceed the 10% cap for that year. See? Tricky! 

So what now? Here are two important takeaways:

Don’t wait to address this issue.

Act quickly to review your company’s giving strategies for the remainder of 2025 and look ahead to future years. In particular, please reach out to the community foundation to explore how you can use a corporate donor-advised fund to maximize your deductions for 2025 before the floor kicks in. 

Consider sponsorship opportunities. 

Keep in mind that your company can still deduct charity sponsorships as marketing expenses if the payment provides a direct business benefit, such as advertising, rather than being considered a pure charitable donation. Under IRS rules, your business will need to substantiate the benefit received. Note also that the charities you support will need to properly account for this support on their end of the transaction, including determining whether to report it as “unrelated taxable income.” 

Please reach out to the team at the community foundation. We are happy to help! 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Charitable giving strategies under the OBBBA, clients who prefer anonymity, and gifts of artwork

Hello from the community foundation! 

The team at the community foundation appreciates the opportunity to work with so many attorneys, CPAs, and financial advisors as you counsel your clients about the most effective ways to make a difference in the community. We appreciate hearing that your clients are committed to their charitable giving plans, no matter what happens with the tax laws. Especially now, in the midst of so much community need, we’re grateful for your clients’ generosity that continues to improve the quality of life for everyone in our region. 

Here are three topics that are on the minds of many advisors who serve charitable clients:

–Timing is everything, as it is often said, and that may very well be very true for your clients’ charitable giving plans. 2025 is an important year to be absolutely sure you’ve reviewed clients’ charitable goals and evaluated those objectives against the changes in the tax laws affecting the charitable deduction. The One Big Beautiful Bill Act creates both challenges and opportunities, and you’ll want to know how the new laws impact each of your philanthropic clients. 

–How can you spot clients who may prefer to keep all, or some, of their charitable gifts anonymous? Check out three sentiments commonly expressed by clients who would like to structure their philanthropy to remain under the radar. Our team is happy to help. 

–Buying artwork is on the rise among young professionals. Take a quick look at the tax dynamics and decisions involved when a client wants to use their artwork to support favorite charities. With gifts of artwork on the IRS’s radar recently, you’ll want to be prepared for client questions.  

We look forward to talking with you soon! Thank you for the opportunity to work together to serve your charitable clients. We appreciate the opportunity.

–Your community foundation

P.S. August is National Make-A-Will month, which means it’s the perfect time–before the fall gets busy–to encourage your clients to review their estate plans. As you meet with your clients to update wills, trusts, and beneficiary designations, remember that the team at the community foundation is here to help ensure that your client’s philanthropic intentions are well-documented and structured in the most effective way possible, both from a tax perspective and through the lens of community impact.

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Timing is everything: Mapping out clients’ 2025 charitable giving plans

It’s never been easy to navigate the ever-shifting tax rules to help clients structure charitable gifts, and now it’s even trickier. Major changes under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, are creating complexity, opportunity, and, for some, urgency. The OBBBA reshapes both how much a client can deduct for charitable contributions and which clients can benefit from these deductions in the first place. Indeed, your clients might have read a recent Wall Street Journal article (subscription required) outlining major tax planning themes related to charitable giving. 

As always, the team at the community foundation is honored to be your first call when the topic of charitable giving arises in client conversations. In most cases, the community foundation’s tools can be useful, and if we can’t help directly, we’ll point you in the right direction.

Here are three key issues to discuss with philanthropic clients:

Evaluate whether the client could benefit from “bunching” charitable contributions in 2025

Many advisors are recommending that their clients address head on the One Big Beautiful Bill Act’s expansion of the standard deduction—$15,750 for single filers and $31,500 for married couples in 2025, with even higher levels for taxpayers aged 65 and older. A technique known as “bunching” charitable donations can be particularly useful. For example, if a client typically donates $12,000 each year to charity, but the client’s other deductions do not push them over the standard deduction, the client could give $36,000 (three years' worth of gifts) to a donor-advised fund at the community foundation in 2025. The idea is that the client can combine this gift with other deductions to substantially exceed the standard deduction, allowing the client to itemize and claim a much greater deduction for that year. Over the following two years, the client can take the standard deduction and lean on the donor-advised fund to distribute funds to favorite charities. 

Note that the higher standard deduction will likely impact tax-motivated charitable giving, even with the expected uptick in the number of itemizers thanks to the OBBBA’s new state and local tax deduction allowances (subscription required to the Wall Street Journal). 

Look ahead to 2026 as you help clients plan for 2025

For your clients who continue to itemize deductions, 2026 will bring even further changes. Only charitable donations exceeding 0.5% of AGI will be deductible. For example, a couple with $225,000 in AGI would see their deductible charitable amount reduced by $1,125 per year. Although clients who are large-scale donors may find this change proportionately less impactful, clients making moderate or smaller-sized gifts might see a significant reduction in their eligible deductions. What’s more, under the OBBBA, high-income taxpayers will see their maximum tax benefit from charitable deductions calculated at a top marginal rate of 35%, down from 37%, starting in 2026.

These changes may prompt higher-income clients to lean heavily on bunching strategies in 2025 to maximize current tax advantages before stricter limits kick in.

Watch the fine print on the charitable deduction for non-itemizers

Under the OBBBA, starting in 2026, taxpayers who take the standard deduction will be able to claim a direct deduction for charitable giving—up to $1,000 for single filers and $2,000 for married couples filing jointly. This provision mirrors temporary measures seen during the COVID-19 pandemic. Crucially, the deduction is limited to cash gifts made directly to qualified charities; donations of property or stock, and contributions to donor-advised funds, do not qualify. For the estimated 100 million Americans who do not itemize, which likely includes many of your clients, this provision is certainly good news. That said, gifts of appreciated stock and donor-advised funds are tax-effective and convenient charitable giving vehicles, and many clients may be disappointed that they can’t deploy these techniques to take advantage of this new deduction.

2025 certainly is shaping up to be an important year for helping your clients plan their charitable gifts. Please reach out to our team to explore ways to leverage the community foundation’s tools, including establishing your client’s donor-advised fund to take advantage of bunching. And of course, always remember that regardless of the tax implications, your clients’ philanthropy addresses vital community needs—and this is a motivator that transcends any deduction.

Quiet types: Spotting clients who prefer to give anonymously

At the community foundation, we’re dedicated to helping your clients achieve their charitable goals. We’re honored to serve as your trusted resource for tax-efficient giving strategies, help your clients maximize their charitable impact, and support your clients as they build lasting philanthropic legacies. As you continue (or begin) conversations about charitable giving with your clients, one important question often arises: How would your clients like their giving to be acknowledged and recognized?

Based on each client’s unique goals, the desired level of recognition may vary. While most donors choose to give publicly, there are many situations where donors prefer to give anonymously. As a trusted advisor, it’s essential to understand how anonymous giving might factor into a particular client’s overall philanthropy plan. Of course, the community foundation is here to help.

Keep an eye out for the following client sentiments:

“We don’t want to get a ton of requests for charitable gifts. It’s overwhelming and it makes us feel bad that we can’t do it all.” 

In today’s challenging economic environment, understandably, nonprofits often increase outreach efforts to ask for support. Through a donor-advised fund at the community foundation, your client can recommend the extent to which personal information is shared with recipient organizations. In many cases, our team can customize outgoing communications to grantee charities while also ensuring that your clients receive meaningful updates (such as thank you notes, impact reports, and success stories).

“We don’t want our colleagues, friends, and even some of our family members to be able to see how much we give or where we give it.”

Some clients value privacy and choose to keep their giving and financial capacity under the radar. Donor-advised and other fund information remains highly confidential. Unlike private foundations, which require public reporting, donor-advised and other types of funds at the community foundation can help keep donor identities, grantee identities, and fund balances private.

“We want to make a big difference, but we want to do it without drawing a lot of attention to ourselves.”

For some donors, charitable giving is about honoring a loved one or building a family legacy, rather than personal recognition. These donors may want to make grants in a different name—such as a family name or in memory of someone significant. Working with the community foundation, whether it’s through a donor-advised or other type of fund, offers your clients a great deal of flexibility in how a family’s gifts will be recognized. Your clients can pick and choose which gifts they want to make public and which they want to keep anonymous. Clients can also make gifts that are publicly announced in honor of family members or using a generic foundation name.

If your clients are considering philanthropic endeavors with any of these goals in mind, the community foundation is here to help. We collaborate with attorneys, CPAs, and financial advisors, providing resources and support to ensure your clients can give to their favorite causes with the level of recognition and privacy they desire. We look forward to working with you! 

Gifts of artwork: Worth a look, but be careful

If you’ve noticed a surprising uptick in recent years among your younger clients investing in artwork, it is not your imagination! A survey of 1,007 U.S. high net worth individuals (each with at least $3 million in investable assets) found that 83% of respondents aged 43 and under said they currently own or would like to own art—compared with only 34% of those older than 43. 

As you work with this subset of clients who are also charitably minded, you’ll want to be generally aware of the rules surrounding gifts of artwork to charity. When handled appropriately, artwork donations can provide notable benefits for both your client and favorite causes. The process for these gifts, however, comes with unique complexities, ranging from a client’s emotional attachment to the IRS’s watchful eye on donations involving historically misvalued or fraudulent art gifts.

Here are three ways to approach helping a client leverage an investment in artwork for charitable purposes:

The client donates the artwork directly to a charity for “related use”

If your client donates art held for more than one year directly to a museum or institution that uses it as part of its mission (for example, displaying the art in public collections or exhibitions), the charitable tax deduction can be based on the fair market value at the time of the gift, which could deliver a significant upside for your client. “Related use” rules are strict. The artwork must enhance or be central to the organization’s mission. Donated pieces valued over $500 require your client to file an IRS Form 8283, and gifts valued over $5,000 also require a qualified appraisal. Note also that if the charity sells the piece within three years of making the gift, the deduction could be retroactively reduced.

The client gives the artwork to a charity for it to sell

If your client gives artwork to a charity that will sell the artwork rather than use it in programming, the deductible amount is limited to the lesser of the fair market value or the client’s original cost basis. While the tax deduction might not be as high as the client would like, the advantage of this route is that it offers flexibility, both related to the recipient organization (such as a donor-advised fund at the community foundation) as well as the use of the proceeds from the artwork’s sale. Your client still must follow the IRS reporting and appraisal rules. 

The client sells the artwork and then gives the proceeds to charity

This is often an unattractive option from a tax perspective, but it is certainly an option, especially if maximizing a deduction is less critical than avoiding the complexities of gifting artwork. Although the cash gift will be eligible for a charitable tax deduction, the client will incur capital gains tax on the appreciated value of the art, reducing the net financial benefit of the gift.

As with any gift of hard-to-value assets, the best approach for donating artwork is highly dependent on the individual client’s art collection, tax situation, and charitable goals. The community foundation team is always happy to serve as a sounding board for charitable gifts of all kinds. Reach out any time. We are always here for you!

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

A conversation-starting case study, what clients are thinking, and the latest tax updates impacting charitable giving

Hello from the community foundation! 

Summer is in full swing! We’ve heard from many advisors that you’re taking advantage of this season’s change of pace by planning ahead for the fall, when many clients decide to move forward with updates to their estate and financial plans. With that in mind, we’re sharing tips and trends that can help pave the way for those conversations. 

–Introducing the topic of charitable giving during client meetings can be challenging because there are so many other issues you need to cover in a short amount of time. Walking a client through a case study can help, especially when that case study illustrates the ways charitable giving and tax savings are intertwined. The community foundation is happy to provide examples to break the ice.  

–In your role as a tax, estate planning, or financial advisor, you’re always seeking ways to help your clients meet their goals for retirement, provide for family members, transfer wealth to heirs, and support the charities they care about. Knowing what clients may be thinking related to charitable giving can help you address the philanthropic components of a client’s estate and financial plan. 

–There’s a lot going on with tax legislation! As always, the community foundation keeps its finger on the pulse of the latest developments related to philanthropy. We’re sharing what’s happening now, and we will keep you informed about changes in the law that could impact the charitable planning strategies you recommend to clients. 

As always, please consider the community foundation to be your first call whenever the topic of charitable giving arises in your client discussions. We’re committed to helping your clients make a difference in the community we all love. Thank you for your partnership! 

–Your community foundation

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Start with numbers: A case study for charitable clients

by Staff Name, Director of Charitable Giving

As an estate planning, tax, or wealth advisor, you play a critical role in helping your clients maximize the impact of charitable giving while also optimizing tax benefits. Unfortunately, a 2023 survey found that only 19.2% of advisors regularly discuss charitable giving with clients, and another 44.2% do so only occasionally.

The community foundation can help! Our team is here as a sounding board for everything related to charitable giving. So, when the topic arises and your clients are interested in evaluating strategies for supporting the causes they care about, just loop us in. 

Of course, this still means you’ll be looking for ways to bring up the topic in the first place. One of the easiest ways to do that is to talk with your clients about the benefits of donating highly-appreciated assets, such as stocks or real estate, to a fund at the community foundation. To help with that conversation, consider discussing the example of Alice, a hypothetical client.

Alice earns more than $500,000 per year. She wants to make a $10,000 gift to the community foundation’s nonprofit emergency fund. Alice holds shares of Apple, Inc., which she purchased more than 20 years ago–and the value of the shares has increased significantly. Alice also holds plenty of cash. 

Alice is weighing writing a check to the community foundation for $10,000 or transferring shares of Apple stock with a total value of $10,000. 

Of course, as an advisor, you know that it’s more advantageous for Alice to give the stock. But it might help to break it down into real numbers when you talk with Alice:

• Alice’s annual income of more than $500,000 lands her at a Federal marginal tax rate of 37% and a Federal long-term capital gains tax rate of 23.8% (20% plus the 3.8% Net Investment Income Tax). 

• Let’s assume that Alice itemizes her income tax deductions, and that Alice’s cost basis in the $10,000 worth of Apple shares is $2000. 

• If Alice gives cash to the community foundation and claims a charitable deduction of $10,000, the resulting Federal tax savings will be $3,700, bringing the net cost of the donation to $6300.

• On the other hand, if Alice were to donate $10,000 of Apple stock to the community foundation instead of giving cash, the tax result would be much better because Alice would avoid an unrealized capital gain of $8000, equating to $1904 in capital gains tax avoided. 

• The Federal income tax savings of $3700, plus the $1904 in capital gains tax avoided, results in a net cost to Alice of $4396 for the $10,000 gift.

• The upshot here is that the gift to charity is $10,000 in either case, but giving cash “costs” Alice $6300 while giving stock “costs” her just $4396. 

Of course, the benefits of donating highly-appreciated assets to the community foundation are just the beginning. Charitable conversations with your clients lead to many productive discussions about maximizing lifetime giving, legacy planning, involving the next generation, and so much more. Please reach out to our team anytime! We’re happy to share more ideas and examples of the many ways your clients can make a difference. 

Charitable mindset: What are clients thinking?

by Staff Name, Director of Charitable Giving

Don’t you wish you could read your clients’ minds? Understanding what clients really care about is crucial to constructing any estate or financial plan. When it comes to charitable giving, you can be a step ahead. Plenty of research offers clues about what matters most to your philanthropic clients. 

For starters, the numbers show that year after year, people are giving money to U.S. charities–to the tune of $592.50 billion in 2024 alone according to Giving USA. Indeed, most of your clients are probably philanthropic; more than 85% of affluent households give to charities each year. 

Here’s what else they may be thinking: 

“We want to make the world a better place, starting right at home.” 

The importance of a local connection is a common theme throughout various research studies on the motivations for charitable giving. A widely cited peer-reviewed study conducted by the University of Chicago Booth School of Business found that people are more likely to donate to local charities than distant ones. The team at the community foundation certainly witnesses this every day as we work with donors to address local needs by supporting charities right here in our community. The community foundation is honored to be a resource for you and your clients to structure charitable gifts that make the biggest difference. 

“We really enjoy giving to charities.”

Philanthropy is a positive experience for the benefactor, not just the beneficiaries. Research suggests that the benefits are both psychological and physiological. This is in sharp contrast to something clients may view as a mostly negative or stressful experience–updating financial and estate plans. Estate planning forces clients to confront uncomfortable topics such as their own mortality, potential incapacity, and the possibility of family conflict, not to mention the complexity of the planning process, fear of making the wrong decisions, and anxiety about financial security. By infusing charitable giving into the conversation, you’re taking the pressure off the uncomfortable topics and potentially lifting the mood of the entire process. 

“We want to be sure we are making a difference.”

Philanthropists, by definition, seek to create positive social change and are often eager to address complex issues. Indeed, at this moment in time, commentary has suggested that philanthropy may be re-examining its role amid global "polycrises" by considering not just the material resources it provides but also its potential to lead within organizations, across the sector, and in society at large. The community foundation is uniquely positioned to help your clients expand their philanthropic portfolios to include not only ongoing financial support for charities, but also advocacy and structuring unrestricted endowments or other long-term vehicles to support sustained positive change. 

As always, the community foundation team stays closely connected with the full range of nonprofits in our region, and that expertise is invaluable to help your clients achieve the impact they’re seeking to address critical community needs. Please reach out anytime!

Pending tax legislation, gifts of business interests, and steps to transfer a donor-advised fund

Hello from the community foundation! 

Thank you to so many of you who have reached out recently with questions about how pending tax legislation might impact the charitable planning strategies you recommend to your clients. The community foundation team keeps a close eye on legislative developments related to philanthropy and we are always here as a sounding board for you and other attorneys, CPAs, and financial advisors.

Our latest update addresses these potential tax law changes, and we’re also covering two important, tried-and-true charitable planning strategies.

–Tax law changes are on the horizon, and pending legislation creates a lot of unknowns for advisors and the clients you serve. The community foundation is happy to provide a high-level overview of what’s on the table and offer insights for how proposed tax reform might impact your clients’ charitable giving strategies.  

–Many of your clients likely own their own businesses, and most of those clients are likely supporting charities in the community. That’s why it’s really important to know the benefits of giving closely-held business interests to a fund at the community foundation, as well as understand how to avoid pitfalls and mistaken assumptions that using a private foundation is the best move. 

–As you work with charitable clients, you may discover that they’ve established a donor-advised fund at a national commercial provider. It’s easier than your clients (and you!) might think to transfer this donor-advised fund to a donor-advised fund at the community foundation, which offers the same tax benefits plus the benefits of local connection. Learn how it works, step by step, and how the community foundation can help.  

As always, we’re honored to be your first call whenever the topic of charitable giving arises. Our goal is to help your clients make a difference, especially during these uncertain times. The community foundation is here for you, for your clients, and for our community. 

–Your community foundation

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TRENDING TOPICS

More questions than answers: Pending tax legislation

There’s little doubt that you’ve seen extensive news coverage of the so-called "Big Beautiful Bill” (H.R. 1) that passed the House of Representatives by a 215-214 vote on May 22, 2025, and now moves to the Senate, where significant changes are expected before final passage. And that is the primary takeaway here: Significant changes are expected. This makes it impossible to predict right now how your clients might be impacted by tax law changes.

Still, it’s important to be aware of key components of the bill that could impact estate and financial planning. Three key provisions rise to the top as advisors consider how their charitable clients might be affected: 

No sunset of estate tax exemption

The bill makes permanent the expiring 2017 tax cuts under the Tax Cuts and Jobs Act (TCJA). This means that the much-anticipated sunset of the increased estate tax exemption might not happen at the end of this year after all. If the estate tax exemption remains high, a smaller segment of your clients will be motivated to use charitable giving as a way to avoid estate tax. Still, though, because people rarely give to charity solely for tax avoidance purposes, your clients remain very interested in discussing charitable giving and incorporating philanthropy into their estate and financial plans. 

Standard deduction stays high

Proposals in the bill would make permanent the higher standard deduction levels from the TCJA, and even add an additional temporary increase through 2028. The upshot here is that few taxpayers itemize their deductions, reducing the number of people eligible to claim a charitable deduction. The still-high standard deduction likely could signal continuation of the decline in charitable giving following the 2017 tax cuts. On the flip side, the bill introduces a modest "above-the-line" charitable deduction for nonitemizers—$150 for individuals and $300 for joint filers. 

Increased taxes on private foundations

The bill sharply increases excise taxes on the investment income of large private foundations, raising rates from the current 1.39% to as much as 10% for the largest entities, although private foundations with less than $50 million in assets would see no change. What this means for your charitable clients is that private foundations may become less attractive. Many nonprofit leaders are concerned that this could impact charitable giving; it might also mean that donor-advised funds could become even more attractive. Certainly the community foundation remains committed to helping your clients establish donor-advised funds and other vehicles to actively support their favorite charities as well as ensure that critical local needs are addressed.

So what’s next? The Senate is expected to begin its markup in June, with the process likely extending into July or August as both chambers reconcile differences before sending the bill to President Trump for signature.

As always, the community foundation will keep you posted! Please reach out anytime. Our team is happy to discuss options for your clients’ charitable giving to ensure that they’re supporting their favorite causes and important local needs in the most effective ways possible under any set of tax laws. 

Donating business interests: Why a fund at the community foundation is the ideal recipient

If your client base includes business owners, you probably weren’t surprised by this observation in a recent Wall Street Journal article about the “stealthy wealthy”: “Behind a paycheck, the largest source of income for the 1% highest earners in the U.S. isn’t being a partner at an investment bank or launching a one-in-a-million tech startup. It is owning a medium-size regional business.”

What’s more, the chances are very good that most of your business-owner clients are charitably-inclined. Indeed, more than 90% of small business owners have supported charities and community activities in the last year.

This means that you and other tax and estate planning advisors ought to have at least a basic level of knowledge about the benefits and mechanics of giving closely-held business interests to charity. When properly executed, this technique can be extremely effective to achieve the client’s financial and philanthropic goals.

Here are three very important components of this strategy:

Stop before you use a private foundation.

Some of your business owner clients probably have established a private foundation. But the private foundation is not the ideal recipient of private business interests. Donating closely-held stock to a fund at the community foundation is generally more tax effective than giving it to a private foundation due to several key differences in how the IRS treats these gifts. When your client donates closely-held stock to the community foundation, your client can typically deduct the full fair market value of the stock, up to 30% of adjusted gross income and also avoid paying capital gains tax on any appreciation. By contrast, if your client donates the same stock to a private foundation, the deduction is limited to cost basis up to only 20% of AGI, which is a significantly less favorable tax outcome.

Mind the timing. 

Encourage a business owner client to start planning for a gift of closely-held stock before putting out feelers to potential acquirers and absolutely before any part of a deal is inked. This is crucial because a gift to charity will avoid substantial unrealized capital gains that have accrued in the business over the years only if the gift and the sale are genuinely separate events, avoiding the step transaction doctrine. Careful planning will help ensure that the client’s fund at the community foundation will receive 100 cents on the dollar for the portion of the stock it owns and the deduction won’t be thrown out. 

Respect the rules for valuation. 

Counsel your clients about securing a proper valuation for charitable deduction purposes at the time the business interest is contributed to the fund at the community foundation. Valuation has always been a critical factor in any type of tax or estate planning strategy. Recently, the additional wrinkle presented by the Supreme Court’s decision in Connelly v. United States makes things even more interesting. The Connelly decision impacts the way business interests are valued for estate tax purposes. In Connelly, the Supreme Court held that life insurance proceeds indeed ought to be included in the value of a company without offsetting the redemption obligation. This could translate to higher taxable estates for your business owner clients, creating further incentive to leave a portion of closely-held stock to charity. The decision is also a reminder that careful planning can potentially avoid pitfalls.

As always, please reach out to the community foundation anytime the topic of charitable giving arises in client conversations. We are honored to be your first call on all matters of philanthropy. Most of the time, we can help. If not, we will absolutely point you in the right direction. 

Easier than you might think: Moving a donor-advised fund to the community foundation

As you advise clients on charitable giving, you’re likely aware of the growing popularity of the donor-advised fund as a flexible, tax-efficient tool for philanthropy. Many families appreciate how donor-advised funds can streamline giving, foster family engagement, and serve as a launchpad for deeper community impact.

Recently, we’ve engaged with many professional advisors—attorneys, accountants, and financial planners—who work with clients utilizing community foundations in a variety of ways, ranging from contributing to important initiatives, supporting the community’s foundation’s operating endowment, making qualified charitable distributions from IRAs, or participating in foundation-hosted events that address critical local priorities. 

Interestingly, we have discovered that some advisors were not aware that their clients had established donor-advised funds through national financial institutions. Although these clients are familiar with the community foundation, they simply did not know that the community foundation could help them in multiple ways, including establishing a donor-advised fund to support favorite charities. 

It’s easier–and more beneficial–than you might think for your client to move a donor-advised fund to the community foundation! Here’s what you need to know:

Tax and administrative advantages are the same

The community foundation offers donor-advised funds with the same tax and administrative advantages as national providers, including:

• Online access for clients to view fund balances, contributions, and grant history

• Simple grantmaking process to qualified charities

• Consolidated tax reporting, often with a single year-end letter for all contributions and grants

• Comprehensive back-office support for administration, tax receipts, recordkeeping, and compliance with 501(c)(3) requirements

• Favorable tax deductibility for contributions, including gifts of cash, securities, and other assets

Added value at the community foundation

Unlike many national donor-advised fund sponsors, the community foundation offers a suite of high-touch, locally-informed services that can enhance your clients’ philanthropic strategies, such as:

• Personalized service from staff experienced in structuring complex gifts (e.g., appreciated stock, real estate, closely-held business interests, estate gifts)

• Local expertise on community needs, nonprofit effectiveness, and high-impact grantmaking

• Opportunities for collaboration with other donors and access to educational forums featuring local and national experts

• Deep engagement in specific issue areas, including educational opportunities and hands-on involvement for clients and their families

• Impact measurement support to help clients track and communicate the outcomes of their giving

• Family and corporate philanthropy services to foster long-term, multi-generational charitable engagement

• Administrative fees that are reinvested in the community, supporting local operations and amplifying the community foundation’s mission

• Direct access to local experts who can research and recommend causes aligned with your clients’ goals

• Staff with deep community roots who maintain close relationships with nonprofit leaders and stay attuned to emerging needs

What next?

The steps to transfer a donor-advised fund are surprisingly simple: 

• Work with the community foundation team to establish a donor-advised fund. Our straightforward, easy-to-complete paperwork makes it seamless and fast. Your client can mirror the terms of the existing donor-advised fund, or adjust successor advisors and legacy provisions based on their charitable intentions. Our team will walk through the process with you and your client. 

• Work with your client to request a grant from the national donor-advised fund provider. Depending on the provider, this can sometimes be completed all online. Designate the community foundation (and reference the new donor-advised fund if possible) as the grant recipient.

• Your client may be able to grant the entire balance in one transaction. If not, most of the balance can be transferred to fund the new donor-advised fund, and you can work with your client to transfer the rest later. 

• Before closing the donor-advised fund at the national provider, your client should download grant history and contribution information for future reference and tax documentation. Note that transfers between donor-advised funds are tax-neutral; these transactions and not taxable events. 

We look forward to working with you and your clients to make the most of their charitable giving, especially by establishing a donor-advised fund at the community foundation to serve as the cornerstone of the client’s charitable giving plan. With a donor-advised fund as a baseline, your client can begin to tap into all of the many ways the community foundation serves as a home for charitable giving, from strategic grant making to legacy giving and everything in between.

Five Ws (and an H) of CRTs, transferring a private foundation, and staying the course in uncertain times

Hello from the community foundation! 

We appreciate the opportunity to work with you and so many other attorneys, CPAs, and financial advisors as you assist your clients with their estate, tax, and charitable planning needs. Your partnership is especially important in today’s economic climate as the need for philanthropic support becomes more critical than ever to sustain and improve the quality of life in our region. That’s certainly the spirit we intend to capture in our latest updates.

–Charitable remainder trusts (CRTs) are popular planning vehicles because your client is eligible for an up-front income tax deduction, a go-forward income stream, and deferral of capital gains taxes. The community foundation is happy to share a rundown of the what, where, who, why, when, and how of CRTs. 

–As you work with a client who has established a private foundation, consider that at some point it might make sense to transfer all or a portion of the private foundation’s assets to a donor-advised fund at the community foundation. Our checklist for making a move is worth a skim to remind you of the many benefits.

–Keep in mind that charitable giving is important to your clients even during times of economic upheaval. Your clients still want to give to their favorite charities, so keeping an eye on evolving tax policy is crucial. The community foundation is here to help you and your clients take both a short-term and a long-term approach to making an impact in our region. 

As always, we’re honored to be your first call whenever the topic of charitable giving arises. Our goal is to help your clients make a difference, especially during these uncertain times. The community foundation is here for you, for your clients, and for our community. 

–Your community foundation

THIS MONTH’S

TRENDING TOPICS

Charitable remainder trusts: What, where, who, why, when, and how?

by Staff Name, Director of Charitable Giving

If you’ve represented charitable families over the years, you’ve certainly heard the term “charitable remainder trust,” sometimes called a “CRT.” You might have even helped clients set them up. 

For most attorneys, CPAs, and financial advisors, CRTs don’t come along every day. Because a CRT can be such an effective planning tool in certain situations, it’s useful to have at least a basic level of knowledge about how they work. 

Here are six important points to keep in mind.

What is it? Your client establishes a CRT as a standalone trust. The trust pays an income stream to the client (and potentially other beneficiaries such as a spouse or children) for life or for a period of years. According to the trust’s terms, whatever assets are left when the income stream ends will pass to a charity, such as your client’s fund at the community foundation.

Where does the charitable deduction figure in? Because the transfer of assets to the CRT is irrevocable, your client is eligible for an up-front charitable income tax deduction in the amount of the present value of the charity’s future interest, calculated according to IRS-prescribed rules and interest rates. Remember also that assets held in a CRT are excluded from your client’s estate for estate tax purposes. 

Who is it for? The ideal client to establish a CRT is typically someone who owns highly appreciated assets, including marketable securities, real estate, or closely-held business interests. That’s because a CRT allows these assets to be sold within the trust without triggering immediate capital gains taxes, enabling the proceeds to be reinvested. 

Why are some trusts called CRATs and CRUTs? A “charitable remainder annuity trust” (“CRAT”) is a type of CRT that distributes a fixed dollar amount each year to the income beneficiary. Your client cannot make additional contributions to a CRAT. A “charitable remainder unitrust” (“CRUT”), on the other hand, is a type of CRT that distributes a fixed percentage (at least 5%) annually based on the balance of the trust assets (revalued every year). Your client can make additional contributions to a CRUT during lifetime.

When is a CGA a better fit? The tax laws permit a client over the age of 70 ½ to make a once-per-lifetime transfer from an IRA of up to $54,000 (2025 limit) to a CRT or other split-interest vehicle, such as a charitable gift annuity (CGA). This is sometimes called a “Legacy IRA.” Because the cost of setting up a CRT usually means that a $54,000 CRT is impractical, a client who wants to leverage the Legacy IRA opportunity may lean toward a CGA instead.  

How can I learn more? As is the case with any question you encounter from a client about charitable giving techniques, the community foundation is honored to be your first call. We can help you navigate the options and identify strategies that are likely to best meet a client’s needs.

We look forward to working with you! 

A happier alternative? Moving from a private foundation to a donor-advised fund

by Staff Name, Director of Charitable Giving

The number of private foundations in the United States is nearing 150,000 with combined assets topping $1 trillion, so it’s no wonder that a lot of people immediately think about establishing a private foundation when they begin to explore structuring their charitable giving activities. You’re likely working with several clients who’ve established private foundations somewhere along the way. 

Recently, though, the growth of donor-advised funds to nearly 2 million in number–with grants from these vehicles reaching $50 billion in some years–signals that many people are starting to use both a donor-advised fund and a private foundation. Some of your clients may even be considering transferring a private foundation’s assets to a donor-advised fund at the community foundation to carry out the family’s mission. This particular trend is on the rise, so take a moment to skim this checklist to help guide conversations. 

“Reality check” the hassle. Day-to-day management and administration of a private foundation can become time-consuming, especially as the responsibilities fall to second- and third-generation family members. Even the first generation may realize at some point that administrative work is taking too much focus away from nonprofits, the community, and making grants.

Review the tax rules. The IRS’s rules related to investments, distributions, and “self-dealing” are complex. Over time, family members may become frustrated navigating the potholes of tax compliance. For instance, if a client plans to transfer all or part of a family business, now or in the future, it is critically important to communicate the benefits of using a donor-advised fund at the community foundation versus transferring the business interests to a private foundation (which can be disastrous from a tax standpoint).

Lean on the community foundation. Our team is happy to walk alongside you and your client through the steps to terminate a private foundation and move the assets to a donor-advised fund at the community foundation. The first step is for the board of the private foundation to approve the termination and capture that approval in meeting minutes or a consent of directors. 

Set up a donor-advised fund. Your client can establish a donor-advised fund at the community foundation and choose the name (e.g., Smith Family Foundation Fund). Similarly, selection and succession of fund advisors (who will handle grantmaking) can mirror the private foundation’s board structure. As a result, the donor-advised fund will look and operate a lot like the private foundation. 

Make a grant. The private foundation will distribute (“grant”) most of its net assets to the newly-established donor-advised fund. The private foundation will need to be sure it pays all of its liabilities and expenses before accounts are closed, so your clients will want to leave a reserve in the private foundation to cover final bills before completing the termination.

Finalize the termination. As long as the private foundation corporate entity is in good standing according to state laws, termination for tax purposes will be automatic and smooth because assets were transferred to the community foundation, a longstanding organization. The private foundation will then simply file an informational tax return with the Internal Revenue Service for its final year (even if it is a short tax year). The final step is for the private foundation to take any steps required for termination under the laws of any and all states in which it was registered, especially if the private foundation was organized in corporate form.

Whether your client is ready to transfer a private foundation this year or is simply evaluating options, please give us a call. We’re happy to help! 

Philanthropy: It’s a marathon, not a sprint

by Staff Name, Director of Charitable Giving

As 2025 continues to deliver twists and turns, it’s important to keep talking about philanthropy. Charitable giving is a vital strategy for your clients, even in times of economic uncertainty. Here are three trends to watch as you guide your clients through an unpredictable era and encourage them to look beyond the horizon.

Your clients still want to give

While overall giving may dip during economic downturns, most of your philanthropic clients will continue to support their favorite charities. Indeed, giving often rebounds quickly alongside economic recovery. Donor-advised funds, in particular, have shown resilience and even growth during economic shocks, providing a stable source of support for nonprofits and a flexible tool for your clients. This support is crucial because economic upheaval often increases community need, which in turn creates more demand for nonprofits’ services. Often, as was the case during the pandemic, donors rise to the occasion. By working with the community foundation, your clients can stay close to the tangible, local impact of their giving.

Legislation is still percolating

At the moment, key provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025, potentially impacting the charitable strategies you recommend to clients. Notably, though, on February 13, 2025, lawmakers in both the House and Senate introduced the Death Tax Repeal Act of 2025, aiming to permanently eliminate the federal estate tax and the federal generation-skipping transfer (GST) tax. Needless to say, if this act becomes law, the landscape of tax planning will change dramatically. On a happy note, under recently-proposed legislation, clients over the age of 70 ½ would be able to make Qualified Charitable Distributions to donor-advised funds at the community foundation. Under current law, eligible recipients of QCDs are limited to designated, field-of-interest, unrestricted, and similar funds. 

Focus on the future

Some of your clients may be wondering just how much they can truly accomplish through philanthropy, especially right now. The answer is a lot. Sometimes called “big bet philanthropy,” strategies to leverage charitable dollars to tackle systemic social issues are becoming more popular. “Long-haul” initiatives require sustained commitment, collaboration, and capacity-building among both donors and the nonprofit organizations they support. Thanks to its mission to connect donors to community needs, the community foundation is in a unique position to work with your clients who want to pursue this form of charitable giving. 

Please reach out to the team at the community foundation anytime. Even during economic upheaval, charitable giving remains a powerful tool for tax planning and durable community impact. Thank you for your continued work to help your clients maximize their positive influence on our community.

Trust in nonprofits, donor-advised funds versus private foundations, and a quick refresher on charitable gift annuities

Hello from the community foundation! 

The community foundation team is honored to work with attorneys, CPAs, and financial advisors as you help your clients achieve their charitable giving goals. Put us on speed dial–we want to be your first call when the agenda turns to philanthropy! 

As part of our service to you and other advisors, the community foundation is committed to letting you know about trends and developments that may impact your clients’ charitable giving strategies. To that end, here are three topics that are popping up frequently in our conversations with both donors and advisors:

–Trust is at the foundation of your client relationships, and the team at the community foundation feels the same way about our relationship with you, your clients, our region’s nonprofits, and the community we serve. Learn more about why the community foundation is such a trusted source for all things charitable giving. 

–Deciding whether a private foundation or a donor-advised fund is the best vehicle for your client can be challenging, especially if the client walks in the door with preconceived notions. A donor-advised fund at the community foundation may be more flexible and effective than you assume and often is the ideal tool to achieve clients’ tax and charitable giving goals. 

–You may not run across charitable gift annuities (CGAs) very often, but when you do, it’s good to know the basics. We’ve put together a few quick pointers as a refresher course on how a CGA works and when it might be a good fit. 

Please reach out anytime you’re dealing with a client matter related to charitable giving. We can almost always provide a solution, and if we can’t, we will recommend the best next steps for you and your client.

Happy spring! 

–Your community foundation

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Trust matters: Your clients’ go-to resource for community impact

by Staff Name, Director of Charitable Giving

As attorneys, CPAs, and financial advisors, you know very well that trust is at the foundation of your relationships with clients. Your clients are seeking a similar level of trust with the people and organizations that are helping carry out their philanthropic wishes.

Fortunately, following a dip in public trust in the nonprofit sector, trust in charities has shown a recent increase. According to the 2024 Edelman Trust Barometer and the Independent Sector's "Trust in Nonprofits and Philanthropy" report, trust in nonprofits rebounded by 5 points to 57% in 2024, following a four-year decline. This increase positions nonprofits as the most trusted sector compared to government, business, and media. Still, nonprofits face challenges and concerns about maintaining this trust, including general skepticism about institutions, as well as increasing expectations that charities demonstrate transparency and accountability.

As you work with your charitable clients, keep in mind that the community foundation can help bolster clients’ trust in their favorite charities. Here’s how: 

Trustworthy information about particular charities

The community foundation is a valuable source for objective, timely information about specific charities and the impact of particular programs. By working with the community foundation, your clients can leverage a transparent and trustworthy avenue for learning about how best to make a difference for their favorite causes.  

Wide-ranging expertise about community needs

At its core, the community foundation is committed to achieving impact. This means that our team keeps a finger on the pulse of local needs, whether related to social services, health care, education, the environment, the arts, community development, or any other community priority. With a deep understanding about community needs, the community foundation team can be an excellent sounding board for your clients who want to learn which charities are addressing each need and how those charities are measuring results. 

Broad set of tools for structuring charitable gifts

The community foundation can help establish a tax-efficient structure to achieve each client’s goals for community impact. Available vehicles include not only donor-advised funds, but also other types of funds such as designated funds to support specific charities and field-of-interest funds to address particular causes, as well as multi-generational funds to involve clients’ children and grandchildren. The community foundation offers your clients a flexible and effective way to manage charitable giving by simplifying their giving processes and maximizing potential tax benefits.

As always, we want to be your first call! Please reach out to the community foundation team anytime the topic of charitable giving comes up during a client conversation. 

Weighing the options: Private foundation or donor-advised fund?

by Staff Name, Director of Charitable Giving

When you’re working on the charitable components of a client’s estate or financial plan, one of the first areas you’ll likely explore is the structure. Certainly you are familiar with both private foundations and donor-advised funds as useful charitable giving tools. Before you jump into one or the other for a particular client, though, it’s important to review the similarities and differences between the two so that you can best achieve your client’s goals. 

Here are three common myths about the differences between private foundations and donor-advised funds to help you evaluate a client’s options.

Myth #1: Donor-advised funds are all the same and only private foundations can be customized

Private foundations will always differ from donor-advised funds in important ways, not only because of their status as separate legal entities and the deductibility rules for gifts to these entities, but also because of the opportunities to customize governance. But it is a mistake to assume that a donor-advised fund is a cookie-cutter vehicle. Indeed, “donor-advised fund” is simply a term used to describe the structure of a fund and its relationship with a sponsoring organization such as a community foundation. The donor-advised fund vehicle itself is extremely flexible. Here’s why:

–Donor-advised funds are popular because they allow your client to make a tax-deductible transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Then, your client can recommend gifts to favorite charities from the fund when the time is right. 

–A donor-advised fund at the community foundation is frequently a more effective choice than a donor-advised fund offered through a financial institution. That’s because at a community foundation, your client is part of a community of giving and has opportunities to collaborate with other donors who share similar interests. Plus, the community foundation is itself local and is deeply knowledgeable about the needs of our region and the nonprofits meeting those needs. 

–The community foundation can work with you and your client to build a charitable giving plan that extends for multiple future generations. That is because the team at the community foundation supports your clients in strategic grant making, family philanthropy, and opportunities to learn about local issues and nonprofits making a difference. 

Myth #2: Deciding whether to establish a donor-advised fund or a private foundation mostly depends on size

The size of a donor-advised fund, like the size of a private foundation, is unlimited. The United States’ largest private foundations are valued well into the billions of dollars. Information about private foundations, ironically, is not so private. The Internal Revenue Service provides public access to private foundations’ Form 990 tax returns. That is not the case for individual donor-advised funds.

Similarly, donor-advised funds are not subject to an upper limit. Although information on the asset size of individual donor-advised funds is not publicly available, anecdotal information indicates that some donor-advised funds' assets may total in the billions of dollars.

Indeed, a donor-advised fund of any size can be an effective alternative to a private foundation, thanks to fewer expenses to establish and maintain, maximum tax benefits (higher deductibility limitations and fair market valuation for contributing hard-to-value assets), no excise taxes, and confidentiality (including the ability to grant anonymously to charities).

The net-net here is that the decision of whether to establish a donor-advised fund or a private foundation–or both–is much less a function of size than it is other factors that are tied more closely to the objectives a client is trying to achieve. 

Myth #3: Donor-advised funds and private foundations are mutually exclusive

Make sure you’re aware of the benefits of using both a donor-advised fund and a private foundation to accomplish clients’ charitable goals. For example:

–Donor-advised funds can help meet the need for anonymity in certain grants, which is typically difficult using a private foundation on its own.

–A donor-advised fund can receive a client’s gifts of highly-appreciated, nonmarketable assets such as closely-held stock and real estate, and benefit from favorable tax deduction rules not available for gifts to a private foundation.

–An integrated donor-advised fund and private foundation approach can help a client balance and diversify investment and distribution strategies to ensure that giving to important causes remains steady even in market downturns.

Some private foundations are even considering transferring their assets to a donor-advised fund at the community foundation to carry on the foundation’s mission. Terminating a private foundation and consolidating giving through a donor-advised fund is sometimes the best alternative for a client when the day-to-day management and administration of the private foundation has become more time-consuming than expected and is taking time and focus away from nonprofits, the community, and making grants. 

Along these lines, some families find that the tax rules related to investments, distributions, and “self-dealing” have become harder to navigate and are perhaps even preventing the family from maximizing tax benefits of charitable giving. Finally, the administrative load of managing a private foundation sometimes becomes overwhelming, especially if the family members who handled these functions initially have retired, passed away, or simply become busy with other projects.

The bottom line here is that we encourage you to reach out to the team at the community foundation anytime you are evaluating how to structure a charitable giving plan to achieve both your client’s charitable goals and financial goals. Our team is here to help. In many cases, the community foundation’s tools and services are a great fit for your client’s needs. If not, we will point you in the right direction. 

Refresher course: Charitable gift annuities

by Staff Name, Director of Charitable Giving

Several advisors have shared with us recently that they’re fielding more questions about charitable gift annuities (CGAs). It’s quite possible that CGAs are landing on clients’ radars these days for a couple of reasons:

A $54,000 opportunity

Word is finally getting out about the availability of a one-time Qualified Charitable Distribution transfer via a “split-interest gift” such as a CGA or a charitable remainder trust (CRT) under the “Legacy IRA” provisions enacted a couple of years ago. Adjusted for inflation, the ceiling for 2025 is $54,000. Because the law effectively mandates that the CGA or CRT be created solely for the purpose of receiving a QCD, your clients may gravitate toward the CGA, which is less complicated than going through the process of creating a relatively small CRT.

Payout rates are still high

Current charitable gift annuity payout rates, as suggested by the American Council on Gift Annuities (ACGA), are generally higher than in previous years. Rates were increased in January 2024 and remain in effect for 2025. With the status of interest rates unpredictable as 2026 approaches, some clients may want to take advantage of a CGA this year.

So what do you need to know about how and why a charitable gift annuity can be an effective planning tool for some clients? Here are the basics:

–Through a charitable gift annuity, your client makes a transfer of assets to a charitable organization and in return receives a lifetime income stream and a partial tax deduction.

–When the client dies, the remaining funds are retained by the charity. 

–The charitable donation portion of the transaction is calculated based on Internal Revenue Service rules for determining the amount of the contribution that is in excess of the present value of the annuity (these are the rates that are relatively high right now).

–Your client can fund a charitable gift annuity with a variety of assets, including marketable securities and cash. 

–Actuarial calculations are used to establish the payout amounts, paid in equal installment payments that are considered a partial tax-free return of the client’s original gift.

–Generally a large residual flows to the charity after the client’s death. 

–The charity’s own assets, not just the donated assets themselves, back the annuity payouts. Because of this dynamic, charitable gift annuities are regulated by most states to ensure that the charity has enough reserves to meet obligations.

Please reach out to the community foundation team when a client asks about charitable gift annuities or any other type of charitable gift. Keeping up with the rules and regulations for charitable gifts of all kinds is one of the many ways our team is here to help you serve your charitable clients. We’re honored to be your first call on all things philanthropy! 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Tax time blues, generational shifts, and tax reform

Hello from the community foundation! 

Here we are, right in the middle of another tax season. The years go by so quickly! Of course, preparing clients’ tax returns and planning for the year ahead are top of mind for attorneys, CPAs, and financial advisors. 

The team at the community foundation is happy to share three updates that might help you navigate your work with charitable clients over the next few weeks.

Here’s what’s been trending with advisors recently.

–Tax time really is hard! Financial realities, procrastination, and, especially this year, potential tax law changes loom large for your clients. Learn how philanthropy can be a bright spot during an otherwise challenging season.   

–The transfer of wealth is real, and it is upon us! Discover how the community foundation can help you engage your clients in meaningful conversations about their charitable wishes. Now is the time to set philanthropy plans in motion. 

–If you have a hard time keeping up with pending legislative changes that could impact your clients’ charitable giving plans, you are not alone! The community foundation is here to keep you and other attorneys, CPAs, and financial advisors up-to-date on how ever-evolving tax laws may shape philanthropy.   

Thank you for the opportunity to work together. The community foundation is honored to be your first call for all matters related to charitable giving. In most cases, we can help! If not, we will point you and your clients in the right direction.  

–Your community foundation

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Tax time blues: Why is this so hard?

by Staff Name, Director of Charitable Giving

After the holiday glow has finally worn off, your clients may be hit with a sinking realization that it’s time to pull together tax information and start working with their CPAs, financial advisors, and tax attorneys on the filings for last year and start checking in on current-year strategies. 

Tax time can be stressful for your clients for a number of reasons, and this year is no exception:

–A shifting legislative environment is making it difficult for you and your clients to update financial plans and tax strategies with certainty. It’s hard to instill confidence in your clients when you, the professional, know that so much is up in the air. 

–The psychological hit that comes with facing financial realities such as income, debts, and losses–never mind the taxes themselves–can trigger emotional drain. This is sometimes aggravated by a client’s tendency to procrastinate. 

–An abundance of readily-available information about tax preparation can complicate your ability to advise clients. Clients may have seen articles and posts that suggest a “wait-and-see” approach, or simply read information that does not apply to them. So, as you set out to counsel your clients, you may first have to overcome the hurdles of misplaced assumptions and misinformation. 

But, there’s a bright spot! Many advisors find that the topic of charitable giving can lift clients’ spirits, even during a stressful tax season. Philanthropy can draw positive emotions to the surface. As you work with your clients over the next few weeks, be sure to talk about charitable giving. Many of your clients, for example, have already established donor-advised or other types of funds at the community foundation. Other clients could benefit from getting started with the community foundation right away. 

Please reach out to our team. We are honored to be your first call when you’re immersed in tax and financial planning matters and the topic of conversation shifts to philanthropy. We are here for you and your charitable clients during tax season and throughout the year.    

Generational shifts: Fulfilling clients’ charitable wishes

by Staff Name, Director of Charitable Giving

Chances are, you’ve already begun to notice that a major transfer of wealth is happening as your Baby Boomer clients establish financial and estate plans to pass their wealth to their Gen X and Millennial children.

The dollars involved are eye-popping. Most attorneys, financial advisors, and CPAs have seen the Cerulli study’s estimate that $124 trillion in wealth in the U.S. will transfer through 2048. The research estimates that most of this wealth–$105 trillion–will pass directly to children, grandchildren, and other heirs. And, notably, the study estimates that $18 trillion will flow to philanthropy. 

As the transfer of wealth gains momentum, advisors have a major opportunity to position themselves as trusted experts who can help clients not only structure efficient lifetime and estate gifts to heirs, but also help ensure that clients’ charitable wishes are achieved. It’s crucial for advisors to know that the community foundation is here to help incorporate philanthropy into clients’ financial and estate plans.  

Here’s why this is so important:

–There’s a knowledge gap. Clients may not be aware of the options and benefits of charitable planning. Even many of your affluent clients may still be writing checks to their favorite charities, not realizing that gifts of appreciated stock, for example, can be more tax-efficient, and that tools at the community foundation, such as donor-advised funds, can be incredibly useful.

–Next-level strategies are key. Your ultra-wealthy clients will likely need to implement sophisticated strategies for transferring assets smoothly and tax-efficiently. Clients want to maximize the results of their charitable gifts while also protecting their families' interests. Leaning on the community foundation to help structure gifts of complex assets, such as closely-held business interests, can make a huge difference in reducing a client’s tax bill and achieving meaningful community impact.

–Legacy planning starts now. It’s tempting to put off addressing a client’s wishes to support favorite charities in an estate plan. “We’ll look at that in a few years,” is a common but less-than-ideal approach. That’s because charitable bequests are best addressed as part of a comprehensive estate and financial plan. Naming a fund at the community foundation as the beneficiary of a client’s IRA, for example, is an extremely tax-efficient way to accomplish charitable wishes. 

Our team is here to augment your expertise in charitable giving strategies. Not only will you be better able to meet clients’ needs, but you’ll also strengthen relationships and improve client retention. Please reach out to learn more about how the community foundation can help your clients make a lasting impact with their wealth while achieving their financial goals.

Caught by surprise? In case you missed it, here’s what’s going on

by Staff Name, Director of Charitable Giving

Keeping up with an ever-evolving landscape of tax legislation can be a full-time job! Many attorneys, CPAs, and financial advisors regularly ask the community foundation to provide a refresher course on the potential tax changes on the horizon in 2025, especially those that might impact charitable planning techniques. 

Here’s a quick rundown of three things you need to know:

–Sunsetting provisions of the Tax Cuts and Jobs Act of 2017. The TCJA’s scheduled expiration at the end of 2025 will revert key tax policies to pre-2017 levels, potentially affecting charitable giving incentives. For example, the top individual tax rate is scheduled for a bump from 37% to 39.6%, potentially increasing the benefits of charitable tax deductions for your high-income clients. At the same time, the limit for cash donations to public charities is slated to drop from 60% of AGI to 50%, reducing the deduction for some of your clients. Finally, the estate tax exemption is scheduled to drop to approximately $7 million per individual. Because the exemption would nearly be cut in half, and therefore more estates would be subject to tax, a larger subset of your clients could benefit from charitable bequests to avoid estate tax. All of this assumes, of course, that intervening legislation won’t prevent the sunset. 

–Potential expansion of charitable deduction. Proposals like the Charitable Act aim to introduce a universal deduction for non-itemizers, broadening tax incentives for your clients across income levels. The bill is still popular among industry leaders and appears to have maintained momentum since it was introduced. 

–Consequences remain to be seen. Above all, the 2025 “cliff” may trigger the first major tax code rewrite in decades, which in turn surely would have a ripple effect in many areas of your clients’ lives, including within the charities your clients support. Post-TCJA, for example, charitable giving dropped by as much as $20 billion, according to one study, in the wake of reduced tax benefits. 

The bottom line here is that we’ve got you! The team at the community foundation stays on top of legal developments at the intersection of tax policy and charitable giving. We keep our fingers on the pulse of potential implications for you, your clients, and the charities they support, and we are here to help you navigate the changes.

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Three mini case studies, supporting local needs, and wildfire relief

Hello from the community foundation! 

We hope all is well as 2025 gets fully underway. Our team is really happy that so many attorneys, CPAs, and financial advisors have already reached out to ask questions about charitable planning techniques that could be a good fit for your clients. It is our honor to be your first call when the topic of philanthropy arises.

Here’s what’s been trending with advisors recently.

–As tax time approaches, you may encounter one or more of three scenarios related to the timing of IRA distributions, business succession planning, and opportunities to give appreciated stock. Check out the community foundation’s tips captured in our popular “if this, then that” mini-case study format. 

–Local issues are top of mind for many of your clients. The community foundation is uniquely positioned to help your clients make the biggest difference in the areas of our community’s greatest needs while also helping your clients support the full range of their charitable interests. 

–The aftermath of wildfires in Southern California is heartbreaking, to say the least. The community foundation is here to help you and your clients navigate the options for effective and trusted ways to provide financial support. 

It is our honor and pleasure to work with you and your clients. Thank you for partnering with the community foundation. We wish you all the best in the coming weeks! 

–Your community foundation

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“If this, then that”: Scenarios to consider as tax time approaches

by Staff Name, Director of Charitable Giving

As attorneys, CPAs, and financial advisors, you are well aware that you have clients’ attention when tax season rolls around. This makes it a great time to cover tax planning strategies for the current year and beyond. To help incorporate charitable giving topics into your tax season client conversations, we’ve put together tips to address three scenarios where the community foundation can assist your efforts. 

Evaluate QCDs sooner rather than later. 

If: Your client missed the 2024 deadline for a Qualified Charitable Distribution. 

Then: Make sure the client took an RMD for 2024 (if required to do so). Start planning now for 2025 QCDs, paying very close attention to the required process. QCDs are an excellent tool for your clients who’ve reached the age of 70 ½ to give to a designated, field-of-interest, or unrestricted fund (donor-advised funds are not eligible), but if the client waits until the last minute at year-end, there might not be time for the transaction to be completed by December 31 as required. Plus, QCDs executed early in the year can help avoid negative effects of the "first-dollars-out rule” so that the QCD can count towards your client’s 2025 RMD.

Watch for charitable giving opportunities in business succession planning.

If: Your client is beginning to consider exit strategies for a closely-held business.

Then: Reach out to the community foundation right away. Gifts of closely-held stock to a charitable fund can be a very useful component of a business succession plan. That’s because a client can gift shares of the business, which in turn means that no capital gains tax will apply to the gifted portion when the business eventually sells. The proceeds of the gifted shares flow into the fund to be used for your client’s charitable priorities. Keep in mind that timing is crucial; if a deal is in the works at the time the shares are transferred to the charitable fund, the charitable deduction is in jeopardy. 

Consider gifts of appreciated stock early in the year.

If: Your client’s stock portfolio made big gains last year.

Then: Evaluate whether it might be wise to make gifts of appreciated stock to a fund at the community foundation early in the year, rather than waiting toward the end of the year. If certain stock positions are high right now, it’s worth considering whether a gift in the very near future could be a good move. As a reminder, gifts of stock to a public charity are eligible for a charitable deduction in the amount of the stock’s fair market value at the time of transfer. And, when the stock is sold so that its proceeds can be deployed to further your client’s charitable goals, no capital gains tax will apply.

Our goal is to be your go-to sounding board for any client situation where charitable giving is an option. Please reach out anytime you and a client are discussing philanthropy. In most cases, the community foundation can help. Even if our tools are not a fit, we will point you in the right direction! 

For clients who love local causes, the community foundation is the place

by Staff Name, Director of Charitable Giving

Most of your philanthropic clients likely support a wide variety of charities year after year. The causes they support represent a range of motivations, including personal experience, a role as a volunteer or board member, family tradition, or alignment with values and community priorities. 

Many of the charitable organizations your clients support are local. That’s important to note because it means that your clients are especially well-positioned to lean into the community foundation’s unique position as the hub for charitable giving and local knowledge. Here are three reasons that matters:

–Clients can tap into the team’s knowledge about specific organizations, including financial information, data about the impact of a charity’s programs, and observations of an organization’s areas of greatest need.

–Clients can choose from a variety of fund types depending on what they’d like to achieve. A designated fund, for example, allows your client to set aside tax-deductible dollars that are dedicated to supporting a specific organization. Through the community foundation’s services, funds are distributed over time to the charity while the assets remaining in the fund are protected from the charity’s creditors. Another example is an unrestricted fund, which leverages the community foundation’s extensive research about the needs of the community and the nonprofit programs that are addressing those needs.

–Clients can work with the community foundation to leave a bequest to an endowment fund to support community needs for generations to come. As a perpetual organization, the community foundation ensures that charitable giving stays strong in our region to address important needs as they evolve over time.

Of course, if your client establishes a donor-advised fund at the community foundation, the fund can support local causes as well as causes across the country. As the hub for your clients’ charitable giving, our tools and our team are dedicated to helping your clients achieve their charitable goals both near and far. Working with the local community foundation, no matter what a particular client’s charitable priorities may be, is itself a strong show of support for philanthropy right here in our community.  

Wise giving: Advising clients on supporting fire relief efforts

by Staff Name, Director of Charitable Giving

In the wake of the devastating California wildfires that have ravaged communities around Los Angeles, many of your clients are understandably eager to provide assistance to those affected. This may be particularly true for your clients who are corporate executives and want their companies to participate in a meaningful way. Before your clients rush to donate, encourage them to consult the community foundation. Here’s why:

Local expertise, networked nationally 

Community foundations have unparalleled local knowledge and also frequently collaborate with other community foundations across the country, especially on disaster relief initiatives. This means that our team addresses local disasters when they occur here, and we also coordinate with community foundations in affected areas when disasters occur elsewhere. Our team can guide your clients toward the most effective and impactful ways to contribute to address gaps and avoid duplication of effort. 

Fraud avoidance

Our team can help your clients navigate the complex landscape of disaster relief organizations and initiatives. With numerous GoFundMe campaigns and charitable organizations emerging in response to the wildfires, it can be challenging for your clients to discern which efforts are legitimate and most effective. We can provide vetted information about reputable organizations and initiatives, helping your clients make informed decisions about where to direct their support.

Best practices for tax planning

As always, our team is here to offer suggestions for tax-efficient giving strategies. For instance, we can help you and your clients learn more about qualified disaster relief payments under Internal Revenue Code Section 139, which offers significant tax advantages for both donors and recipients. These payments are not considered gross income for the recipient and are tax-deductible for the donor, making them an attractive option for clients looking to maximize the impact of their contributions.

Long-term strategies

We’ll help your clients think strategically about long-term recovery efforts. While immediate relief is crucial, the recovery process from such devastating wildfires will take years. Our team can advise your clients on how to structure donations to support both immediate needs and long-term rebuilding efforts, ensuring that support continues even after the initial media attention has faded.

As always, our team helps your clients ensure that their contributions are not only generous but also strategic and impactful. We’ll collaborate with our community foundation colleagues in affected communities to support a journey of recovery and resilience.

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

2025's legislative menu, playing the long game, and happy clients

Hello from the community foundation! 

We hope your 2025 is off to a good start!

What a wonderful year-end to 2024, full of many opportunities to work with attorneys, CPAs, and financial advisors to help ensure that clients’ charitable giving goals and tax-planning goals were achieved. We are honored to be your first call when the topic of charitable giving pops up in a client meeting.

Here’s what’s trending to kick off the new year and your work with clients who’ve made philanthropy an integral part of their lives:

–What a year it will be where tax policy is concerned! As advisors gear up for potential changes ushered in by a new administration, the community foundation has your back. We’ll keep you updated on legal developments that could impact the charitable strategies you recommend to clients. In the meantime, the community foundation is happy to share a quick refresher on what may be on the horizon in 2025. 

–Budgeting is always a hot topic early in the year when it comes to all things money-related, and charitable giving is no exception. The community foundation offers tips to help your clients think about adopting a year-long plan for charitable giving that can alleviate stress on both of you.

–Every attorney, CPA, and financial advisor wants clients to be happy! Did you know that talking about charitable giving can help make that happen? Consider the team at the community foundation to be an extension of your team to help structure charitable giving plans that meet your clients’ philanthropic goals, giving everyone a lot to smile about.  

As always, it is our honor and pleasure to work with you and your clients. Thank you for partnering with the community foundation. Happy New Year! 

THIS MONTH’S

TRENDING TOPICS

Sifting through it: What’s on the legislative menu that could impact charitable giving?

by Staff Name, Director of Charitable Giving

We all know that the new year and a new administration brings lots of potential change. So what is going on that you need to know about to serve your charitable clients? 

At the top of the list of issues we’re watching is what might happen with the Tax Cuts and Jobs Act (TCJA) of 2017. As a quick refresher, the TCJA introduced several changes that significantly impacted charitable giving in the United States. These changes are set to expire at the end of 2025, and their potential extension factors into charitable planning techniques.

You’ll no doubt recall that the TCJA lowered individual income tax rates across the board, which in turn decreased the tax savings for each dollar donated, making charitable contributions slightly less attractive from a tax perspective. What’s more, TCJA provisions nearly doubled the standard deduction. (In 2025, the standard deduction is $15,000 for single filers and $30,000 for a married couple filing jointly.) This increase led to a dramatic reduction in the number of taxpayers who itemized their deductions. As a result, fewer taxpayers could claim charitable deductions, potentially discouraging giving among those who previously itemized. Indeed, research estimated that U.S. charitable giving fell by about $20 billion in 2018, the first year the TCJA was in effect. 

In addition, the TCJA roughly doubled the estate tax exemption, which has reached $13.99 million per person for 2025. The higher exemption has diluted purely tax-driven motivations for charitable giving among your wealthy clients. With fewer estates subject to tax, many advisors are working with a smaller pool of clients for whom charitable bequests are a useful technique for reducing taxable estates. 

Naturally, tax policy plays a role in your clients’ charitable giving behaviors, and certainly the giving behaviors following TCJA reflected tax policy’s influence. Nevertheless, studies have shown that most donors are motivated by factors other than saving taxes. Reasons for giving include a sense of duty to give back to society, a desire to tackle inequality, personal passion for specific charitable causes, religious beliefs, and dedication to supporting those less fortunate. Your clients who give to charity benefit emotionally from their gifts, and of course they like knowing that they are helping others and strengthening community ties. While tax benefits certainly are part of a client’s decision-making process, they’re likely a secondary consideration rather than the primary reason for giving. Indeed, even with tax benefits, your client will always end up with less money after making a charitable contribution, signaling that financial gain is not the main driver of philanthropy. Keep this in mind as tax developments unfold. 

Despite the many unknowns, what we do know is that something will happen in 2025 that influences charitable planning. Although TJCA provisions are set to expire at the end of 2025, it’s too soon to determine exactly how you should advise your clients about their charitable planning strategies. Note three potential outcomes of tax policy developments this year:

–If lawmakers extend the current TJCA provisions, existing patterns of charitable giving are likely to continue, with a potentially continued reduction in overall donations due to the higher standard deduction and estate tax incentives that motivate only ultra-affluent clients.

–If the TCJA’s provisions expire without replacement, and the tax code reverts back to pre-TJCA rules, it could lead to an increase in charitable giving as more taxpayers return to itemizing deductions and face higher marginal tax rates. Plus, a lower estate tax exemption would create a strong incentive for more of your clients to pursue lifetime and legacy gifts to charity to reduce taxable estates. 

–New tax legislation could introduce different incentives for charitable giving. For example, the proposed Charitable Act aims to create a universal charitable deduction, which could encourage giving across all income levels. For an uplifting read that includes compelling points about the role of the nonprofit sector and the history of charitable giving, check out this letter that was issued late last year to congressional leaders urging them to enact a charitable deduction for taxpayers who do not itemize. 

Of course, we’ll keep you posted! In the meantime, please reach out to strategize about individual client situations. The team at the community foundation is here to help you structure charitable plans to empower clients to achieve their philanthropic goals, with or without a tax deduction. 

Playing the long game: Encouraging your clients to plan ahead in 2025

by Staff Name, Director of Charitable Giving

Your clients (and you!) may still be recovering from a hectic end to 2024, but don’t let that stop you from helping families get a jump on their charitable planning for 2025. 

As compelling as year-end giving may be, perhaps even more compelling are the reasons for planning and launching a charitable giving strategy early in the year–even in January. Benefits of a year-long giving strategy include:

–Helping nonprofit organizations meet their budgets all year long, which can save them from worrying as much about whether constituents’ ongoing needs can be addressed.

–Leveraging employer matching gifts programs early in the year when dollars are available and there is plenty of time to process the paperwork.

–Increasing predictability of cash flow and therefore being proactive, not reactive, in supporting the causes your clients love. Your clients might even consider setting up automatic contributions to their donor-advised or other types of funds at the community foundation to formalize this component as part of an ongoing plan.

–Taking advantage of plenty of time to learn more about the charities a client plans to support so that a client can be an even more informed and impactful donor, including fully utilizing the community foundation’s expertise and resources.

–Giving the client (and you) time to include children and grandchildren in the charitable giving conversation and tax-planning structures as a learning experience for the whole family.

–If your client is over 70 ½, being able to avoid the year-end scramble to process a Qualified Charitable Distribution (QCD) from an IRA directly to an eligible charity, such as an unrestricted or field-of-interest fund at the community foundation, by executing a QCD in the first quarter.

–Leaving enough time to explore options for more complex giving techniques, such as gifts of closely-held business interests or charitable remainder trusts, that might provide tax benefits as well as meet a client’s charitable goals, rather than waiting until the last minute when it may be hard for everyone to coordinate calendars.

As always, the community foundation is here to help. Please reach out to our team to learn more about how your clients can make the biggest difference with their charitable dollars, and how the community foundation team can help you ensure that your clients are able to fully carry out their charitable wishes for 2025. You and your clients will both be glad you planned ahead to help favorite organizations fulfill their missions throughout the entire year, as well as maximizing tax benefits and avoiding December’s crunch time.

Want happy clients? Talk about charitable giving.

by Staff Name, Director of Charitable Giving

Over the years, more than a handful of attorneys, CPAs, and financial advisors have shared with the community foundation team that their happiest clients seem to be those who’ve incorporated charitable giving into their estate and financial plans. Whether or not you believe this phenomenon is a “chicken or the egg” dilemma, it’s hard to dispute that philanthropy offers both emotional and rational upsides to your clients. Advisors who lean into these benefits stand a strong chance of being viewed by their clients as effective, impactful, and delivering well-rounded services to improve clients’ lives and give them peace of mind. 

Despite these advantages, many advisors lack confidence in discussing philanthropy with clients. A survey found that only 5% of advisors felt "very confident" in this area, with 72% not including philanthropy in their initial fact-finding conversation with clients. This gap represents a significant opportunity for advisors to enhance their services and strengthen client relationships through philanthropic discussions.

Keeping clients loyal and engaged with your services is just one of many reasons to talk with clients about charitable giving. A recent Wall Street Journal article sheds light on the ways charitable giving can have positive effects on both mental and physical health. 

Notably, the article makes these points:

–Donating to charity can lead to improved mood, lower blood pressure, and potentially a longer life.

–The act of giving may trigger a release of serotonin and dopamine, hormones associated with happiness, while reducing cortisol levels.

–Brain scientists and economists have conducted studies supporting these health benefits of charitable acts.

–Research suggests that the positive feelings associated with giving may contribute to these health improvements.

The article implies that engaging in charitable activities could be a way to enhance overall well-being, suggesting that generosity might have tangible benefits beyond just helping others.

Of course, not every client will have exactly the same experience with charitable giving, and of course, charitable giving is above all primarily motivated by a client’s desire to help others rather than solely for personal benefit. Still, it’s critical for advisors to be aware of the unique role charitable giving can play in a client’s life.

The community foundation is here for you! Please reach out anytime you are working with a client who is charitably-inclined. Our highly-trained, professional staff can help navigate both the tax planning complexities as well as the emotional side of giving to ensure that your clients achieve their financial goals as well as their goals for making a difference. 

The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Your next tax planning move, FAQs for QCDs, and a cheat sheet

Hello from the community foundation, and happy holidays! 

We appreciate the opportunity to work with so many of you as you build meaningful and tax-savvy charitable giving plans for your clients. The team at the community foundation is here to be your first call anytime the topic of philanthropy pops up in your conversations. 

As always, we’re committed to keeping you up-to-date on tax and legal developments related to charitable giving so that you can be even more confident in your recommendations to clients. Here are three topics that are rising to the top of the list as 2024 slips away into 2025:

–All eyes are on what might happen with Federal tax laws under the incoming administration. Many advisors and their clients have found themselves in an uncomfortable state of limbo. Diving deeper into your clients’ charitable planning strategies is a good use of your time right now, especially revisiting the advantages of naming a fund at the community foundation as the beneficiary of an IRA.

–Qualified Charitable Distributions, or “QCDs,” continue to be popular among those who are 70 ½ and older. But do you still scratch your head just a little when you hear about QCDs? We get it–there are a lot of moving parts. To make it easier, the community foundation has put together a punch list of FAQs.

–Do you ever wish you could skim a “charitable giving cheat sheet” to quickly determine which charitable planning tools at the community foundation might be a good fit for a particular client? We’ve got you! Check out three examples of “if this, then that” recommendations for charitable giving. 

Thank you for the opportunity to work together! We wish you all the best for the season and look forward to your emails, phone calls, and questions about charitable giving techniques during this busy time of year. 

–Your community foundation

Estate tax planning: What’s your next move?

As attorneys, CPAs, and financial advisors, you’re very aware of potentially significant upcoming changes to the tax laws that could impact your high net-worth clients. Whether or not a post-election Congress takes action to prevent the estate tax exemption sunset at the end of 2025 will potentially affect the way you design your clients’ wealth transfer strategies. 

During this phase of uncertainty, it may be useful to reflect on historical estate tax changes to see how similar situations have been resolved in the past, while at the same time taking a practical approach and advising clients that, while commentators may speculate, it is still impossible to accurately predict what might happen. Estate taxes certainly will continue to be on the minds of leaders in the charitable sector for many months to come. 

As you and other tax planning professionals watch and wait, it is important to keep charitable planning high on your list of strategies that could help blunt the impact of a lower estate tax exemption if the sunset were to occur. That’s because gifts to charities are deductible from a client’s taxable estate. Even during this era of uncertainty, be sure to keep in mind an important planning technique for your charitably-inclined clients that delivers multiple tax benefits and offers some degree of flexibility: Naming a charity, such as a fund at the community foundation, as the beneficiary of an IRA or other qualified retirement plan. 

Here’s why this is such a powerful technique, especially now:

Income tax savings. When your client designates a fund at the community foundation as the beneficiary of an IRA, the fund receives the assets without having to pay income taxes. This is because charities are tax-exempt entities, allowing them to receive funds from qualified retirement accounts tax-free after your client’s death. This is not the case with qualified retirement plans flowing to heirs; the income tax hit can be significant.

Estate tax deduction: Naming a charity as a beneficiary of a retirement plan results in an estate tax charitable deduction, which reduces any applicable federal estate taxes. This means that the full value of the IRA can flow into your client’s fund at the community foundation free from the estate tax burden.

Flexibility. Clients can revise IRA beneficiary designations anytime during their lifetimes. So, as the end of 2025 draws closer, a client can update an IRA beneficiary designation to name a fund at the community foundation, which would protect against a drop in the estate tax exemption. If the sunset does not occur, the client could of course revise the beneficiary designation to leave a greater portion of retirement plan assets to heirs. Remember, though, that the income tax hit will still apply to proceeds flowing to heirs. That’s why many of your charitable clients will choose to leave IRAs to their funds at the community foundation even if the estate tax exemption does not sunset. And, of course, many clients truly want to leave a legacy and would love to incorporate charitable giving into their estate plans regardless of what happens with the tax laws. As tax and estate planning advisor, it is your responsibility–and opportunity–to help clients achieve their philanthropic wishes.   

Please reach out to the team at the community foundation to dive deeper into the ways you can help your clients fulfill their charitable goals, especially during this time when future tax laws are up in the air. We are here to help! 

QCDs: $105,000, $108,000, and more things to smile about

As you and other attorneys, CPAs, and financial advisors put the finishing touches on implementing clients’ year-end charitable giving plans, you may have a moment when it hits you: “Wait, how exactly does a Qualified Charitable Distribution work?” 

That’s a great question, and you are not alone if you’re asking. Even though QCDs are well-covered in financial media, they’re complex enough that it’s hard to remember the nuances when you’re hit with a situation where a client might benefit.

The team at the community foundation is here for you! Please reach out with any of your charitable giving questions, including the most common questions about QCDs:

“Is an IRA the only eligible source for Qualified Charitable Distributions?”

Short answer: Almost.

Long answer: An individual can make a Qualified Charitable Distribution directly to an eligible charity from a traditional IRA or an inherited IRA. If the individual’s employer is no longer contributing to a Simplified Employee Pension (SEP) plan or a Savings Incentive Match Plan for Employees (SIMPLE) IRA, the individual may use those accounts as well. In theory, a Roth IRA could be used to make a QCD, but it is rarely advantageous to do that because Roth IRA distributions are already tax-free.

“What is the difference between a QCD and an RMD?”

Short answer: Quite a bit! But a QCD can count toward an RMD. 

Long answer: Everyone must start taking Required Minimum Distributions (“RMDs”) from their qualified retirement plans, including IRAs, when they reach the age of 73. RMDs are taxable income. The Qualified Charitable Distribution, by contrast, is a distribution directly from certain types of retirement plans (such as IRAs) to certain types of charities. A QCD can count toward the taxpayer’s RMD for that year. And because the QCD goes directly to charity, the taxpayer is not taxed on that distribution.

“Can a taxpayer make a Qualified Charitable Distribution even if the taxpayer is not yet required to take Required Minimum Distributions?” 

Short answer: Yes–within a very narrow age window. 

Long answer: RMDs and QCDs are both distributions that impact retirement-age taxpayers, and it would seem logical that the age thresholds would be the same. Under the SECURE Act, though, the required date for starting RMDs shifted from 70 ½ to 72 and is now up to 73 (which is better for taxpayers who want to delay taxable income). A corresponding shift was not made to the eligible age for executing QCDs; that age is still 70 ½ (which benefits taxpayers who wish to access IRA funds to make charitable gifts even before they are required to take RMDs).

“Can my client direct a QCD to a fund at the community foundation?”

Short answer: Yes, if it’s a qualifying fund.

Long answer: While donor-advised funds are not eligible recipients of Qualified Charitable Distributions, other types of funds at the community foundation can receive QCDs. These funds include unrestricted funds, field-of-interest funds, designated funds, and endowment funds established by nonprofit organizations. 

“How much can my client give through a QCD?” 

Short answer: $105,000 per year in 2024, increasing to $108,000 in 2025.

Long answer: A Qualified Charitable Distribution permits a client (and a spouse from a spouse’s own IRA or IRAs) to transfer up to $105,000 in 2024 (and $108,000 in 2025) from an IRA (or multiple IRAs) to a qualified charity. So, a married couple may be eligible to direct up to a total of $210,000 in 2024 to charity from IRAs and avoid significant income tax liability. 

The community foundation is here to help you and your clients tap the potential of QCDs. Please reach out! We’d love to talk about a QCD strategy for your clients’ immediate gifting needs and beyond.

If this, then that: Your charitable planning cheat sheet

At the community foundation, we’ve recently been asked by attorneys, CPAs, and financial advisors for “cheat sheet” resources to make it easy to determine which type of charitable planning tool is best for a particular client. We love that idea! We’re always happy to be a sounding board for any client situation where charitable giving is an option. Please reach out anytime you and a client are discussing philanthropy. To get your wheels turning, here are three scenarios that have popped up frequently over the last few weeks.

Streamline and tax-optimize charitable giving

If: Your client supports many different charities every year…

Then: A donor-advised fund at the community foundation can be an excellent tool to help a client organize their giving to favorite charities, such as local organizations, places of worship, and an out-of-state alma mater. Clients appreciate how easy it is to support multiple charities while the community foundation’s systems keep track of everything. Plus, clients can give stock and other appreciated assets to their donor-advised funds, often avoiding capital gains tax and simplifying tax receipts to provide their accountants when tax time rolls around. 

Support a specific charity while minimizing risk

If: Your client has supported a particular charity for many years, intends for that support to continue, and also wants to be sure that the funds are used effectively …

Then: Through a designated fund at the community foundation, a client can make tax-deductible gifts–during life and through estate gifts–that are set aside to be used exclusively for a particular organization. The community foundation makes distributions from the fund according to the client’s wishes. An advantage of a designated fund is that the assets are out of creditors’ reach if the charity were to run into financial trouble. Plus, a client who is 70 ½ or older can make Qualified Charitable Distributions up to $105,000 per year (increasing to $108,000 in 2025) from IRAs to a designated fund. 

Leave a charitable bequest and reap significant tax benefits

If: Your client intends to provide for charities in an estate plan and owns an IRA or other qualified retirement plan … 

Then: By naming a fund at the community foundation as the beneficiary of a qualified retirement plan, your client achieves extremely tax-efficient results. Not only is estate tax avoided on the retirement plan assets flowing to the charitable fund, but income tax is also avoided. Indeed, the income tax hit on retirement proceeds left to heirs can be steep. 

The bottom line here is this:

If you encounter any situation with a client where charitable giving could be involved …

Then please reach out! Most of the time, the community foundation can offer a solution that meets both the client’s tax and estate planning goals and the client’s objectives for supporting their favorite charities. At the very least, we can point you in the right direction.

The team at the community foundation is a resource and sounding board as you serve your philanthropic clients. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.  

Three skimmable insights, what’s next for tax laws, and multiple strategies for ultra high net worth clients

Hello from the community foundation! 

Thank you for the opportunity to work together as you serve your philanthropic clients. We are grateful for the many ways our team collaborates with attorneys, CPAs, and financial advisors. 

As always, we’re committed to staying on top of legal developments and curating that content to save you time. We’re covering three topics in this issue that have risen to the top of our research:

–If you only have 60 seconds to get up to speed, check out our insights and tips for hurricane relief, how your clients define “wealthy” and why it matters for their philanthropy, and important year-end giving reminders about ways the community foundation can help.

--You and other financial and tax advisors are on pins and needles about what might happen with the tax laws and especially the estate tax exemption. The community foundation offers factors to consider as you advise your clients … and as you continue to watch and wait. 

--Your client base is more and more likely to include ultra high net worth families. It’s important to understand how multiple charitable giving vehicles, including a donor-advised fund at the community foundation as well as possibly a private foundation, play a role in a client’s overall philanthropy strategy.

Whether we are working together to structure a family’s donor-advised fund, a gift of real estate, endowed support for a favorite nonprofit, or a Qualified Charitable Distribution to a field-of-interest fund at the community foundation, our team enjoys and appreciates every minute. We love serving as your first stop for all things philanthropy.

Wishing you and your family all the best for the Thanksgiving holiday,

Your community foundation

Three insights worth a quick peek

You’re busy as 2024 draws to a close! The team at the community foundation is committed to researching, curating, and keeping you up-to-date on the latest trends and developments that could impact your clients’ charitable giving strategies. If you only have 60 seconds, we recommend scanning these three quick updates. 

Best practices for donating to hurricane relief efforts 

As your clients continue to support hurricane relief efforts, keep in mind that even in disaster response situations, tax rules still come into play. Make sure you’re aware of how the IRS addresses “qualified disaster relief” related to both donors and recipient charitable organizations. Please reach out to the team at the community foundation anytime to learn more about how your clients can ensure that their hurricane relief dollars are making the biggest difference possible. When disaster strikes our region, we help facilitate charitable giving to legitimate efforts that make a real impact. And when disaster strikes elsewhere, we help support our community foundation partners across the country.  

Charitable giving can help bridge generations’ definitions of “wealthy”

The recently-released Bank of America Private Bank Study of Wealthy Americans is a must-read (or at least a must-skim) report because it offers insights into shifting views on wealth, and it also highlights a disconnect in inheritance expectations. Notably, younger individuals tend to rally around a definition of “wealthy” in terms of having the means to live a life of purpose and make a difference. Older generations are more likely to define “wealth” in financial terms. Important for charitable planning is the finding that older generations may not be planning to leave the inheritance that their children and grandchildren expect. Working with the community foundation to help clients establish a multi-generational charitable giving plan makes it easier to get expectations out in the open and keep the entire family meaningfully involved in the family’s wealth over the long term. 

Must-know tips for clients’ year-end giving 

We know you’ve got a lot on your plate as the end of the year approaches. Even if charitable giving does not appear on the surface to be a burning issue in client meetings, it’s still crucial that you keep in mind a few essential charitable giving techniques because your clients do care. Please scan these three important techniques, and please reach out to the community foundation on any matter related to charitable giving. 

–Encourage clients to consider giving highly-appreciated stock, not cash, to their funds at the community foundation, thereby maximizing tax benefits.

–Help clients evaluate a “bundling” or “bunching” technique to make gifts to donor-advised funds at the community foundation, exceeding the currently high standard deduction to be able to itemize. Then, donor-advised fund assets can be used over the next few years to support clients’ favorite charities.

–Help clients who are 70 ½ and older make Qualified Charitable Distributions (“QCDs”) directly from IRAs to designated or field-of-interest funds (donor-advised funds are ineligible recipients) at the community foundation–up to $105,000 per spouse. Plus, QCDs satisfy RMDs! 

Reach out to the community foundation team today! November is the time to set things in motion so you don’t get caught up in the year-end rush. We are here for you. 

What now? Why the elections won’t immediately change tax laws

Many eyes are on the election aftermath seeking clues about what might happen to the tax laws. Of particular interest is the much-analyzed sunset of the higher estate tax exemption, scheduled for the end of 2025 absent intervening legislation. “Absent intervening legislation” is the key, of course. The November 2024 elections will not immediately change estate tax laws, and it’s a long road from here to there.

For starters, the new Congress will not be sworn in until January 2025, and only after the session begins will Congress initiate the budget reconciliation process which is ultimately required to make tax law changes. The budget reconciliation process typically starts with the President submitting a budget to Congress. Then, both chambers of Congress pass budget resolutions with reconciliation instructions. Then, committees draft legislation to meet the budget targets, and the budget committees consolidate the bills into a single omnibus bill. Then, each chamber votes on its respective omnibus bill.

What all of this means is that the status of the estate tax exemption is still very much up in the air. And this means that financial, tax, and estate planning is going to be difficult for many more months. With the estate tax exemption set to drop from $13.61 million per person in 2024 to approximately $7 million per individual on January 1, 2026, a lot is at stake. Should a high-net worth taxpayer start making aggressive gifts now to family members and a donor-advised or other type of fund at the community foundation, anticipating that the sunset will indeed occur? Or take a “wait and see” approach? 

Planning is further complicated by the dangers of waiting until the last minute. Not only is it tough to pull off a complex estate plan or business succession plan quickly, but it’s also dicey because the IRS likely will be on the lookout for situations to invoke the step transaction and reciprocal trust doctrines. 

So what can you do? First and foremost, if you are working with charitably-inclined families who would be impacted by the estate tax exemption sunset, please reach out to the community foundation right away to start looking at options. And if you aren’t sure whether a client is charitably inclined, you absolutely must ask them. It’s always important to talk about charitable giving, and especially right now when the stakes are so high. 

We look forward to many conversations with you and your clients as estate tax developments unfold! 

Navigating multiple charitable strategies for ultra high net worth families

Charitable giving is always an important strategy to discuss with your clients. Many high net worth individuals are philanthropic, of course, and charitable gifts reduce taxable income and avoid estate taxes. Charitable giving strategies are particularly relevant as you and your clients address the possibility of increases in income and capital gains taxes for high earners as well as increased estate taxes due to the looming exemption sunset.

What’s also notable is research indicating that the number of “ultra high net worth" families (over $30 million) has increased dramatically over the last two decades. Globally, 157,000 individuals represented $14.2 trillion in 2004 and by 2024, 426,000 individuals represented $49.2 trillion of wealth. Fast forward to 2027, and this group is expected to grow to over 500,000. America alone is home to 756 billionaires and many of the world’s millionaires–nearly 22 million people. 

So why does this matter to you? It matters because wealthy families will rely increasingly on their attorneys, CPAs, and financial advisors to help them navigate savvy tax planning strategies, including charitable giving. And many of these families are very generous, so don’t underestimate your clients’ desire to get involved in charitable giving. 

Indeed, you may already be working with families who use private foundations to fulfill their charitable giving goals. In many instances, these private foundations were established by previous generations before donor-advised funds became widely available. As donor-advised funds become more popular, for lots of good reasons, please reach out to the team at the community foundation to explore a parallel strategy where your clients can carry out their charitable intentions using both a donor-advised fund and a private foundation.   

In some cases, your clients may want to consider closing a private foundation and transferring the assets to a donor-advised fund because of the many administrative and tax benefits, as well as the value of being able to lean on the knowledgeable team at the community foundation. Our team can help walk through the steps for shutting down the private foundation, which include securing board approval, making sure final expenses will be covered, transferring the assets to a donor-advised fund, filing the appropriate dissolution documents with the state, and submitting the private foundation’s final tax return reporting its dissolution and transfer of assets. 

Whether your client pursues philanthropic goals through a private foundation, donor-advised fund, or combination of both, we are here to help! Please reach out to our team to discuss the ways your clients can support causes that align with their values and passions, create a lasting legacy that extends beyond their lifetime, involve multiple generations in philanthropic efforts, and foster an overall sense of family unity and shared purpose.

The team at the community foundation is a resource and sounding board as you serve your philanthropic clients. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.  

Tax laws and the great unknown, event tickets, and tips for client conversations

As the end of the year draws closer, we’re looking forward to working with so many of you to structure and fulfill your clients’ charitable giving goals for 2024. The community foundation is honored to be your very first call whenever the topic of charitable giving pops up during client conversations. What’s really exciting is to hear from attorneys, CPAs, and financial advisors that you’re no longer waiting for the topic to pop up because you’re bringing it up yourself!

Here’s what’s trending this month:

–Our hearts go out to the millions of people affected by Hurricane Helene. Community foundations in the affected areas and across the country are making it as easy as possible to donate to relief efforts. Please contact the team at the community foundation to learn more about how you and your clients can help swiftly and most effectively. 

–We’re excited about the first ever DAF Day, a national campaign to encourage giving from donor-advised funds. The community foundation is honored to work with so many individuals, families, and businesses to establish donor-advised funds to organize their giving. A donor-advised fund can be a key component of a client’s overall philanthropy plan. Other components often include field-of-interest funds, designated funds, and unrestricted funds, as well as bequests in your clients’ estate plans through a will, trust, or IRA beneficiary designation.

–Make a note on your calendar of other key dates that may be relevant to your clients, including National Estate Planning Awareness Week during October 21 - 27, National Philanthropy Day on November 15, and GivingTuesday on December 3. These well-publicized events make it even easier to bring up charitable planning during client conversations.  

In our latest articles, we’re diving deeper into three key topics:

–Election year dynamics make it even harder to predict potential changes to tax laws that could impact your clients’ charitable giving plans. The community foundation offers high-level observations about the major areas of tax policy that could be impacted by election results. As always, we’re committed to keeping you up to date, even in the absence of a crystal ball. 

–Event season is ramping up, and that means your clients may have questions about the tax deductibility of buying tickets or purchasing a table. Indeed, supporting a charity event is not as straightforward as you might think. The community foundation is happy to help your clients support their favorite causes without running afoul of IRS rules.

–Clients expect you to ask them about charitable giving. “Oh I do that,” you might say to yourself. But don’t be so sure! Clients may have a different impression. The community foundation offers simple tips and techniques to help you meet clients’ expectations for including philanthropy in the conversation.

Thank you so much for the opportunity to work with you and your charitable clients. It is our honor and pleasure! We look forward to your emails and phone calls as 2024 winds down, and we’re excited about continuing our conversations in 2025 and beyond. 

–Your community foundation

Into the great unknown

Humans crave certainty, and that is certainly not what we have right now during election season, especially where taxes are concerned.

Your clients who support charitable causes may be wondering how the election outcomes might impact their philanthropic plans. You’re probably wondering that, too!

Of course, no one has a crystal ball. It is impossible to predict tax law changes, and that will still be the case to some extent even after the elections. So much can change between a tax proposal and what is ultimately enacted into law. Still, you’d at least like to have a general idea. In that spirit, let’s break down at a very high level where the proposals are trending and what might happen with charitable giving depending on the outcome of the November elections.

Capital gains tax 

–Donald Trump has not yet formally proposed a new tax policy on capital gains.

–Kamala Harris has called for an increase on the top long-term capital gains tax rate to 28% for taxable income above $1 million. This change could translate into more incentive to give appreciated assets to funds at the community foundation and other charities. 

Income tax

–Trump could make income tax cuts permanent. These cuts are currently subject to next year’s scheduled sunsetting of provisions in the 2017 Tax Cuts and Jobs Act. Note that in this scenario, the higher standard deduction under the Act would presumably continue, reinforcing what many have observed as a chilling effect on charitable donations. 

–Harris has proposed expanding several tax credits, but sources opine that it is still unclear whether the higher standard deduction would be allowed to sunset.

Estate tax

–Trump has indicated that he will prevent the estate tax cuts (ie., higher estate tax exemption) from expiring. 

–Harris appears to signal that she would increase estate taxes, perhaps leaning toward the policies laid out in President Biden’s Fiscal Year 2025 Budget Proposal, which modeled tightening the estate tax. If the estate tax exemption were to drop according to the sunset provisions under current law, or if other changes were to increase the estate tax, high net-worth taxpayers would have a greater tax incentive to make large charitable gifts and bequests.

Remember that it’s not only the presidential election that will impact tax changes. Passing actual laws depends on the make up of Congress, too.  

As always, the team at the community foundation stays on top of legal developments impacting techniques that are a good fit for your clients’ charitable planning. We’ll keep you posted during election season and throughout the year. 

Event tickets: Beware of the split

Many of your philanthropy-minded clients certainly enjoy attending fundraising events for their favorite charities. Especially as community events start ramping up this fall, you’ll want to be aware of a little wrinkle in the IRS rules that may surprise your clients so much that they ask you about it. 

Here’s how this might go.

Client: “We wanted to buy a table at the fall gala through our donor-advised fund, but the team at the community foundation said that’s not possible and they suggested alternate ways of meeting our goals. What’s up with that?”

You: “Ummmm ….” 

And no one could blame you for that response! The rules behind this are obscure and confusing, even by IRS standards.

Here’s what’s going on: The IRS frowns on donor-advised funds paying for any part of an event ticket to a charitable fundraiser–even if a portion of the ticket is tax-deductible. 

Big picture, the IRS is likely striving for administrative simplicity to enforce the longstanding tax principle that a taxpayer cannot deduct value given to a charity that is effectively transferred back to the taxpayer. At a typical event, of course, your client receives food, drinks, entertainment, and even t-shirts and other fun swag. The IRS knows this!  

The IRS’s commentary on this topic is not new; IRS Notice 2017-73 addresses a concept known as “bifurcated gifts,” meaning a portion of a gift is tax deductible and the other is not. The background here is that the IRS has taken the position that Internal Revenue Code Section 4967 prohibits donor-advised grants from conferring “more than incidental” benefits to donor-advised fund holders. In its 2017 Notice, the IRS expresses its opinion that donor-advised fund grants that enable attendance or participation in a charity-sponsored event (such as buying tickets or a table) do indeed provide more than just an incidental benefit, even if the taxpayer pays out-of-pocket for the non-deductible portion of the ticket. 

Ever since the notice was released, it’seen on the radar of tax professionals, and many predict that the IRS will eventually formalize its opinion by issuing new regulations. It’s wise to keep an eye on this because the penalties certainly are not negligible and include excise taxes imposed on the donor advisor and potential penalties for donor-advised fund programs that knowingly authorize such payments.

There is good news, though! 

The team at the community foundation is on it! We understand the rules inside and out, and we are here to help your clients stay compliant and achieve their charitable goals. In situations like this, we help your clients structure gifts from their donor-advised funds to support general event sponsorships if the client declines all benefits, or even recommend that the client pay the ticket portion from their personal funds and use donor-advised funds to give separate and additional amounts for general support unrelated to the event specifically. We can also talk with your client about how to participate in rallies for outright donations during a fundraising event and ensure that the client is not receiving any benefit in return.

Please reach out anytime! We’re happy to help! 

At a loss for words? Tips for starting a charitable giving conversation

Attorneys, CPAs, and financial advisors certainly are not strangers to tough questions. Indeed, the mix of money, family, and mortality is a potent combination that almost always creates an emotionally-charged planning environment, whether the matter at hand is tax planning, updating wills and trusts, or structuring retirement portfolios.

Why, then, are so many advisors reluctant to bring up charitable giving during client meetings when the topic itself is so uplifting? In some cases, you may feel like you don’t know enough about the technical tax planning aspects of charitable giving to be able to offer sound advice. In other cases, you may be concerned about taking the planning process off course into areas where the client doesn’t want you involved. Or maybe you don’t feel you have a good enough grasp of the client’s big picture to truly recognize opportunities for charitable planning that are a win-win for the client’s favorite causes and the client’s tax and financial plan. 

Guess what? There is no need to worry! The community foundation has you covered. Consider the following:

Clients are expecting you to bring up charitable giving; studies reveal a disconnect between what clients and advisors assume and perceive. So if you think to yourself, “Oh, I asked about that,” think again because the client may disagree. Did you approach the question with sincere interest, or were you just checking a box? 

What’s important here is that the community foundation team is your technical back up! You absolutely do not need to know the ins and outs of the charitable deduction rules, the details of Qualified Charitable Distributions, or how a donor-advised fund or charitable remainder trust operates. If you’ve built an expertise around charitable giving in your practice, that’s terrific, but it is not necessary. Our team is just an email or a phone call away. Please reach out the moment a client expresses interest in charitable planning. We’re happy to support you and be part of the team to meet the client’s objectives. 

And this does not need to be hard. 

While plenty of resources offer excellent suggestions for how to bring up charitable giving in conversations, many advisors tell us that they have to keep it even more simple. We understand that you don’t have time to ask a briefcase full of questions. That does not mean, however, that you can’t have a meaningful conversation. Even just two minutes is plenty if you show genuine interest in the client’s intentions and connect the client to the community foundation. 

For example, the charitable planning part of a client meeting could be as simple as this:

“Okay! Now that we’ve taken a look at your retirement projections, beneficiary designations, and portfolio allocation, let’s check in on charitable giving. Bring me up to speed on your involvement with community organizations.” 

Then, let them talk. If they’re not involved in any community organizations, they’ll tell you. And if they are, they’ll tell you that, too. 

If the client is indeed involved in community organizations, let them know that you are happy to connect them to the team at the community foundation, or, better yet, tell the client that you’d be happy to invite a professional from the community foundation to your next meeting. Your priority as their advisor is to bring professionals to the table to help achieve their charitable giving goals. 

Of course, this sample dialogue is over-simplified for illustration purposes. But truly, it does not need to be much more complicated than that. Next time you meet with a client, give this simple approach a try. You might be surprised at how easy it is, and how much the client appreciates your interest in areas of their lives that go beyond dollars-and-cents transactions and legal documents. It is the community foundation’s honor to work with you and your charitable clients.

The team at the community foundation is a resource and sounding board as you serve your philanthropic clients. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.  

Breaking through procrastination, closely-held stock gifts, and tips to stay current

The days are getting shorter! We’re already hearing from attorneys, CPAs, and financial advisors that you’re ready to get a jump on year-end charitable planning for your clients. Many thanks to those of you who have reached out! 

In the spirit of staying ahead of the curve, we’re covering three topics this month that can help you as you begin to talk with clients about the remaining “must do” items for 2024, including charitable giving.

–Procrastination is a very common human reaction to tasks that seem daunting. Estate planning, tax planning, and financial planning can sometimes fall into this category. Unfortunately, clients who put things off for too long often find themselves missing out on opportunities to further their goals. The community foundation offers tips for using charitable giving as a “gateway” topic for bigger conversations about essential year-end planning.

–Your clients who are business owners and who are also philanthropic will appreciate your suggestions about incorporating charitable giving into their succession plans. This is a good time to have that conversation in light of legal developments and upcoming tax law changes. The community foundation can help! 

–As always, the community foundation stays on top of trends that impact your work with your charitable clients. We’re sharing updates so you can stay current on popular planning techniques, how the election year may influence charitable giving, and what’s ahead on the calendar to help motivate your clients to complete their planning to do list. 

Thank you for the opportunity to work together! We are grateful.

–Your community foundation

Charitable planning can help ease client procrastination

“Nothing is so fatiguing as the eternal hanging on of an uncompleted task.”

–William James

Procrastination is a drain in ways that go far deeper than the incomplete task itself. We know this intellectually, but it can be so hard to break the procrastination habit. It seems that the more daunting the task, the harder it is to tackle. This surely is a major reason some of your clients routinely put off important planning discussions. And of course, many of those discussions are tax-sensitive, which means year-end can get very hectic and stressful for clients who wait until the last minute.

As the year begins to wind down, consider tapping into your clients’ philanthropic interests as a catalyst to motivate them to start addressing year-end planning items right now rather than waiting until November or December. You may discover that the uplifting topic of philanthropy makes it easier to at least start a conversation. Then, the conversation can evolve to include not only charitable giving topics, but also other tax planning topics that need attention. 

Here’s how this could work with a client:

–Review the charitable components of the client’s estate and financial plans, including provisions in wills and trusts, beneficiary designations, donor-advised funds, prior years’ tax deductions, and historical gifts to favorite charities.

–Reach out to the client to suggest that you meet–or at least jump on a call–to check in on 2024 charitable giving plans and other items.

–Open the conversation by briefly recapping the charitable planning components already in place and the client’s history of giving. Then ask the client about their plans for 2024.

–As you talk with the client about charitable intentions, bring up various charitable giving tools and opportunities that match those intentions. In each case, use the charitable discussion as a springboard for general tax planning items that need to be addressed before year-end. 

–For example, if a client who is over 70 ½ mentions wanting to support a particular need or organization in the community, you can suggest that you loop in the community foundation team to potentially establish a field-of-interest or designated fund, which can then receive distributions from the client’s IRA up to $105,000 annually per spouse. This, in turn, opens the door to discuss Required Minimum Distributions and other elements of retirement planning in general.

–If the client mentions that they are already dreading gathering tax receipts for 2024 charitable donations, suggest that the client consider setting up a donor-advised fund at the community foundation to serve as a convenient and rewarding “hub” for charitable giving. Going forward, the client can conduct the bulk of their giving using the donor-advised fund and avoid the mad scramble for receipts. If the client already has a donor-advised fund, make sure they know how to use it most effectively, and reach out to the community foundation team for help. What’s more, discussing charitable donation receipts presents a nice opening to remind a client about other paperwork that may need to be gathered or completed to meet overall estate and financial planning goals. 

–When your client talks about charities they plan to support before year-end, remind your client not to automatically reach for the checkbook. Most of the time, highly-appreciated marketable securities (or other highly-appreciated, long-term assets) are ideal gifts to a client’s fund at the community foundation or other public charity because the client is eligible for a tax deduction at the assets’ fair market value, and the proceeds from the sale of the assets will flow into the client’s fund at the community foundation free from capital gains tax. That means more funds are available to support the client’s favorite causes. Conveniently, the conversation about highly-appreciated stock can segue naturally into a conversation about overall stock positions.   

–Philanthropy topics can naturally lead into even more topics that are sensitive to year-end timing, such as annual exclusion gifts, estimated tax planning, and updating wills and trusts before the extended family gathers for the holiday or travels together overseas.

The community foundation team is here to help you serve your charitable clients every step of the way, every month of the year. We understand that late-December transactions are often unavoidable. The net-net is that we’re happy to work with you according to your clients’ schedules, whether that means getting a jump on a new year and processing stock gifts in February, helping you plan in September for year-end, or preparing fund agreements in December. It’s our pleasure to assist! 

Closely-held stock is having a moment

Giving stock is an important strategy for any private business owner to explore. Not only can these gifts help implement a business succession plan that calls for transferring the business to the next generation if that is your client’s goal, but gifts of stock can also help your business owner client achieve charitable goals and avoid estate tax. 

In light of recent legal developments and pending tax law changes, more and more financial and estate planning advisors are encouraging their clients to consider implementing gifts of closely-held stock to a fund at the community foundation or other public charity. Notably, two developments could have a big impact on your work with these clients: 

–The estate tax exemption sunset set to occur at the end of next year continues to loom large. Without intervening legislation, a lot more of your clients will need to wrestle with the reality that their estates likely will be subject to a hefty tax, causing many clients to rethink both the timing and methods to transfer business interests. Making gifts of closely-held business interests to a fund at the community foundation is likely to become more attractive to a broader cross-section of your client base.

–Valuation has always been a critical factor in any type of tax or estate planning. This is certainly still the case with substantiating the value of closely-held business interests that your clients transfer to a charity, such as a fund at the community foundation. And now, the additional wrinkle presented by the Supreme Court’s decision in Connelly v. United States makes things even more interesting. The Connelly decision impacts the way business interests are valued for estate tax purposes. In Connelly, the Supreme Court held that life insurance proceeds indeed ought to be included in the valuation of a company without offsetting the redemption obligation. This could translate to higher taxable estates for your business owner clients, creating further incentive to leave a portion of closely-held stock to charity. The decision is also a reminder that careful planning can potentially avoid pitfalls.

Please reach out to the community foundation to learn more about how our team can help as you work with your business-owner clients to navigate legal and tax developments that could significantly impact future plans for their privately-held companies. 

Looking ahead: Charitable planning techniques on the horizon

The community foundation team keeps a finger on the pulse of current events and legal developments that could impact the way you work with your charitable clients. Below are three notable items that you’ll likely want to keep in mind this fall.

Election year implications

Naturally, as a financial, legal, or tax advisor, you’re very interested in how the results of the November elections could impact tax laws. What you might not know, though, is how significantly an election cycle can impact nonprofits’ fundraising efforts. Keep this dynamic in mind as you meet with clients who serve on nonprofit boards. These clients will appreciate the fact that you’re aware of the challenges. They’ll also be glad to know that you’re happy to loop in the community foundation team as a resource to structure and accept complex gifts as charities double down on fundraising efforts this year. 

Snapshot of giving trends

If it feels like more clients are asking about giving techniques such as crowdfunding, using appreciated stock to support charities, and setting up donor-advised funds, you are not imagining it. These trends are real! It’s smart to stay up-to-date at a high level so that you’re generally aware of what’s going on with philanthropy. Beyond that, the only information you need is the community foundation’s phone number. Our team is here for you! We are honored to be your first call anytime a client mentions that they’d like to launch or update a charitable giving plan. In most cases, the community foundation can provide tools and services that will help your client achieve their goals. In any event, we’ll help you figure out a solution, whether or not the community foundation ultimately plays a role.

For your calendar 

If you’re in search of tools to help motivate clients to move forward with financial and estate planning, be sure to note that National Estate Planning Awareness Week is coming up. October 21 - 27, 2024 is this year’s designated timeframe to help the public understand the basics of estate planning and the reasons it’s so important. The original House of Representatives resolution includes key points that may spark messaging ideas for your client outreach. And of course, on all things related to charitable planning, please reach out to the community foundation. We’re happy to share best practices for encouraging clients to get serious about planning all aspects of their estates, including the legacies they’d like to leave to their favorite causes and the community they love.