Hello!
Recently we've been reminded that philanthropy is an amazing tool to improve lives, and that is especially true in times of disaster and tragedy. Whether a hurricane, fires, or a war overseas, generous donors step in. No doubt you've seen that happen over and over in our community; you and other nonprofit organizations are on the front lines and your donors support your efforts in times of need. We'll address that very issue in this month's newsletter.
As your partner in philanthropy, the community foundation is here to help you expand your donor relationships, inspire legacies to support your mission, and build your endowment to pave the way for a brighter future.
We look forward to our ongoing conversations, and we are grateful for the opportunity to work together.
All the best,
--Your Community Foundation Team
Responding to Ukraine: Encouraging donors to think globally and act locally
The war in Ukraine has certainly captured the attention of donors both here in our community and across the globe. What does this mean for your organization? It's actually a great opportunity to expand your dialogue with donors and potentially increase their support of your mission.
When you validate your donors' overall philanthropic efforts, you are signaling that what they are doing--for your organization and for others--is making a difference. This, in turn, leads them to be more open-minded about ways they can support your organization, whether through annual giving or planned giving, or both.
As you meet with donors this spring about supporting your organization, ask them if they're supporting Ukrainian relief efforts and, if they are, ask what's motivating them. According to research reported in the Nonprofit Times, multiple factors are prompting Americans to donate to support war relief efforts. Top areas of concern are medical support, children’s issues, and short-term humanitarian aid. Supporting long-term needs is also a motivator, including focus areas such as rebuilding Ukraine, refugee support, mental health, and democracy. You will learn a lot by listening to your donors describe their own reasons for giving, providing clues for fostering deeper engagement with your work.
Indeed, conversations with donors about their support for Ukrainians opens the door for you to describe the needs you're addressing right here at home. Ensuring access to education, providing social services, preserving important works of arts and culture, researching cures for diseases, or whatever your organization's focus happens to be, there are strong parallels to the needs of humanity across the board. Many Ukrainians lack food, clothing, and shelter, for example, which unfortunately is also the case with some people in our community.
Furthermore, as your donors are making immediate gifts to support Ukrainian relief efforts and perhaps adjusting their annual giving budgets accordingly, it is a perfect time to discuss planned giving options. Your donors will want to ensure that your organization is prepared for whatever the future may bring, right here in our community.
Finally, with so much focus on Ukraine right now, understandably, your donors may have questions about making international gifts. The tax-deductibility of gifts to international organizations has long been the subject of complicated rules. Donors must navigate a web of laws and regulations, especially if a donor decides to venture into making direct grants to organizations in the affected region. For that reason, many donors choose to give to a United States 501(c)(3) organization that is working in the affected region. (Perhaps your organization is one of them!)
Please reach out to the team at the community foundation to help with these conversations. We are happy to work with you and your donors to navigate current and future giving opportunities, including establishing planned gifts and endowment gifts to support your mission for generations to come.
Inflation and appreciation: Balancing donors' income needs with charitable goals
With inflation on the rise, donors may be viewing their charitable giving budgets with a more critical eye. Certainly the annual inflation rate of 7.9% for February 2022 raised eyebrows! That’s a level of acceleration not seen since 1982. The ripple effect is powerful. On one hand, the price increases of gasoline, food, and housing have placed enormous stress on the budgets of your organization and others whose missions support individuals and families in need. Charitable donations are critical to closing the gap. On the other hand, your donors may feel they have less cash to give and worry that the value of their cash donations is eroding.
Consider encouraging your donors to make gifts of highly-appreciated assets, such as stock that is holding its value even through these turbulent times. Giving highly-appreciated stock remains one of the most effective ways your donors can support your organization. That’s because when a taxpayer gives stock to a public charity, the capital gains tax is avoided. Plus, marketable securities are typically deductible at their fair market value, further helping a donor's overall income tax situation. The team at the community foundation is happy to help you with these gifts.
Legislative update: Tax law changes are swirling
This spring, there is certainly no shortage of proposed tax law changes in the works. Recognizing that it is impossible to predict when, or if, any proposed legislation will become law, we are watching developments that could impact your donors' philanthropic plans.
As far as a general direction is concerned, the White House's Fiscal Year 2023 budget proposal lays out several revenue-generating components, some of which are tax provisions similar to those in the stalled Build Back Better legislation. Your donors may be interested in the proposed 20% minimum tax on high-income individuals, slated in the proposal to become effective for tax years beginning in 2023, which is referred to as the “Billionaire Minimum Income Tax.” The tax would be applied to the total income, defined to include unrealized capital gains income, of any taxpayer whose net wealth exceeds $100 million.
Your donors may also be interested in the Securing a Strong Retirement Act of 2022 (House Bill 2954, known as the SECURE Act 2.0), passed by the House on March 29. Among many other provisions related to retirement plans, SECURE 2.0 allows taxpayers to make a one-time election for a qualified charitable distribution of up to $50,000 from an IRA to a charitable remainder trust or charitable gift annuity. This is another way your donors can support your mission through a planned gift.
As always, the team at the community foundation is happy to help you structure charitable remainder trusts, planned gifts, and endowments. Please reach out!