The Grand Rapids Area Community Foundation is a public charity serving the Greater Itasca Area in the North Woods of Minnesota. What does that really mean? In a nutshell, it means we exist to serve the public. We are your Foundation and our purpose is to help you give back to the communities you love and the causes in which you strongly believe. Too often we think of "philanthropy" as a term reserved for the rich and famous...but in fact, a Community Foundation helps anyone be a philanthropist.
December: Gifts and Giving
The end of the year means many things to many people. Gifts and Giving encompasses much of our thoughts during December. Getting relief from this recent blustery wind is another consuming thought for most of us. Taxes may be another thought.
Regardless of your income or tax bracket, the end of the year is fast approaching, and there may be opportunities for making a charitable gift that could reduce your tax burden for 2017. In this period of tax reform unknowns, one thing is certain – the end of the tax year is still December 31. Whatever the changes to tax law, the good news is that the majority of cash gifts are made out of a passion for a cause and not in consideration of a tax advantage, so keep up the critical support to your favorite nonprofit causes.
Joining charitable intentions…
The Grand Rapids Area Community Foundation is federally registered as a 501(c)(3) charitable organization. That means gifts (donations) to the Community Foundation are tax deductible to the fullest extent of the law. When you make a gift to the Community Foundation, we send you a tax receipt, that is used to calculate your 2017 taxes.
You choose where your gift goes. The Community Foundation has 280 different funds from which to choose. Where is your passion? Where do you find joy? From helping our neighbors in crisis to supporting the arts or the environment – to…there are numerous options to support the causes and programs that make our communities wonderful places to live.
Providing larger gifts with tax implications:
Larger and more complex gifts are often made with tax considerations in mind, and the information provided below describes current ways that these types of gifts can lead to potentially significant tax savings. Initial reports about tax reform indicate most of these charitable giving tools will remain in place under new tax law. As always, consult your financial adviser and tax professional to get the latest updates on how tax reform will impact your specific charitable giving.
Donation of Appreciated Securities (non-cash assets such as stocks, bonds, and mutual funds):
Maybe you bought stock in your favorite corporation years ago at a low price. After many years of good market growth, this has proven to be a great investment. You look at selling this stock, only to find out that the capital gains taxes are going to significantly impact your annual tax burden. What to do? Donate appreciated securities that have been held more than a year to the Grand Rapids Area Community Foundation to be sold and placed into a fund supporting your favorite cause. This allows you to bypass the capital gains tax if you personally sold the asset. Plus, you’re now entitled to the property’s current value as a charitable deduction. To gain this tax advantage, the securities themselves must be gifted. If you sell the securities and then donate the cash, you would need to pay capital gains.
Real Property: What happens to a lake cabin or hunting land when your family no longer uses or wants the property? Transferring real estate or gifting your home directly to the Community Foundation can pay off with significant tax advantages. Gifts such as real estate are complicated, but workable, and the gifted value generally goes a long way toward adding significant value to an endowment.
Personal Property: Tangible personal property includes physical objects such as cars, gun or coin collections, artwork or antiques. Too often people don’t think they have “assets,” but gifting personal property can provide significant tax advantages. Anything of value is an “asset” and that item, once gifted to the Community Foundation, can provide you a tax saving and go towards your favorite cause.
Charitable Distribution from your IRA (often referred to as a Charitable IRA Rollover):
If you are age 70½ or older and have an IRA, you are able to make a direct charitable distribution (up to $100K a year) to a charitable organization without tax penalty. This can be p
articularly appealing when you consider what to do with your “required minimum distribution”. If you do not want or need the income or tax burden that comes with accepting your required minimum distribution, you can roll it over or transfer it to the Community Foundation and you will not incur any federal income tax liability. This “IRA Rollover” is now permanent law. It is important that this rollover comes direct from the IRA broker to the Community Foundation (not to you). We have sample letters to direct this type of gift, so please call 218-999-9100 for a copy or for more information.
List the Community Foundation as beneficiary of Life Insurance, retirement accounts, etc.:
Naming a qualified charitable organization as beneficiary for important life documents is something none of us want to think about, but it can become extremely important in order to minimize your heirs’ tax burdens when they settling your estate. You can name the Grand Rapids Area Community Foundation as a beneficiary with the redeemed value going into one of the 280 different funds, or set up your own named fund through the Community Foundation where your legacy and passions can continue forever.
Other ways to share your gifts:
There are many more ways to provide a charitable gift and receive immediate tax benefits; Charitable Gift Annuities, Living Estates, Charitable Remainder Trusts, and other tools are very effective depending on your personal desires and financial situation. The best way to find out what might work is to ask either your personal financial planner or tax professional, or stop by the Community Foundation to learn more.