A Message to Our Nonprofit Partners
We can hardly believe it is November! No doubt, your donors' interest in year-end giving is on the rise. We're here to help!
Beginning with this issue of our newsletter, we'll be featuring two important topics: legacy giving and endowment building. We know how important it is to have easy ways at your fingertips to get the word out to your donors about their options for supporting your organization in significant ways. Our aim with this newsletter is to help you do just that.
Thank you for the opportunity to work together!
All the best,
[name of community foundation]
Legacy giving: How Qualified Charitable Distributions can expand the possibilities for securing your donors' long-term support
As year-end approaches, the team at the community foundation is happy to help structure legacy gifts for your donors who want to take advantage of a planning tool known as the Qualified Charitable Distribution.
Especially as potential changes to the tax code swirl around, your donors who are required to take distributions from their retirement plans should consider taking advantage of the Qualified Charitable Distribution planning tool, enabling a taxpayer to direct up to $100,000 from an IRA to a qualified charity. The distribution is not included in taxable income.
Qualified Charitable Distributions are a great way for your donors to jumpstart legacy giving to your organization. For example, we can work with you and your donor to set up a fund to receive a QCD and make it easy for that donor to support your organization for years to come. We do this by creating a designated fund or a field-of-interest fund.
A field-of-interest fund at the community foundation is established for a charitable purpose described by your donor. For example, a field-of-interest fund can be established to support a specific focus area of your organization's mission, such as research for a particular rare diseases, programs to assist homeless families in getting back on their feet, or acquiring works of art that celebrate the region’s diversity. Your donor selects the name of the fund, whether they wish to use their own name (e.g., Samuels Family Fund or Samuels Family Fund for the Arts), maintain anonymity (e.g., Maryville Fund for the Arts), or something else altogether (e.g., Bettering Our World Fund).
A designated fund at the community foundation is another good option for a donor who wants to support your organization for multiple years. This type of fund is useful because the funds can be spread out over time to help with your organization's cash flow planning, enable the donor to benefit from a larger charitable tax deduction in the current year when the donor’s tax rates are high rather than spreading it out over future years when tax rate projections are lower, or both. The donor specifies that your organization is to receive distributions according to a spending policy they select, and the donor can choose a name for the fund.
Endowment building: Tips for talking with your donors about year-end giving
Don’t let donors miss out on the few provisions of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act that carried over to 2021, including the ability to deduct up to 100% of adjusted gross income (AGI) for cash gifts made directly to qualifying charities and the “universal” charitable deduction of $300 per taxpayer ($600 for a married couple). Here is a sample message you can use to help get the word out to donors about using this tax perk to build your endowment:
There's never been a better time to start helping us build our endowment. We're so grateful that many donors are electing to direct the CARES Act's "universal charitable deduction" this year to our endowment. And of course, gifts of highly-appreciated stock make perfect endowment gifts and are much appreciated by our staff and by the people we serve. Finally, we encourage you to share your passion for our organization this year by letting your friends and family know they can easily make an endowment gift to ensure that our staff is here for the long haul. Our endowment makes it possible for us to be ready to serve people who need us when our community is faced with the next pandemic or another crisis that creates hardship for the people who rely on our support.