Savvy donors are thoughtful about where and how they invest their charitable dollars. At the end of the year, consider these giving vehicles to help achieve your philanthropic goals and maximize tax savings.
Open a Donor Advised Fund
Use this “bunching” strategy to claim the charitable deductions in 2019 and spread distributions to charities over several years, on your own timeline.
If you make regular and recurring charitable gifts each year, it’s a great time to establish a Donor Advised Fund (DAF) with Tidewater Jewish Foundation (TJF).
For a limited time, when creating a new DAF through TJF with at least $7,500, TJF will match your gift with an additional $2,500 for a total fund balance of $10,000 or more—which means your investment goes even further. A DAF allows you to make charitable contributions to your fund at any time AND retain the ability to make distributions to charitable organizations of your choice (Jewish or non-Jewish). (foundation.jewishva.org/home-page/create-a-fund/open-a-donor-advised-fund)
The process is now easier than ever with TJF’s new online Donor Advised Fund Application/Agreement.
Invest in Charitable Insurance
Thanks to matching funds, TJF donors are turning a $25,560 “investment” in tax-deductible insurance premiums (annual gifts of $2,556 paid over 10 years) into $250,000 for the Jewish community. Charitable Insurance can be used to make a significant philanthropic impact in the community for future generations. Tidewater Jewish Foundation currently offers a 35% match of premiums for specific types of policies. This is an excellent way for donors to endow their Annual Campaign gift.
A DAF may be used to fund charitable insurance and maximize your tax benefit.
Are you 70½ or older?
Consider an IRA Charitable Rollover to reduce your tax burden.
Required Minimum Distributions (RMDs) from Individual Retirement Accounts (IRAs) count as income and can significantly increase taxes. An IRA charitable rollover, also called a Qualified Charitable Distribution (QCD), is an exception. Donors who are 70½ years and older with a traditional IRA can distribute up to $100,000 each year from their IRAs to their favorite 501(c)(3) without counting the distribution as income. That’s better than making the withdrawal, paying income taxes, and then making a gift. For many, this is a tax-efficient way to create and/or annually build a permanent Life & Legacy® gift.
Any long-term appreciated securities with unrealized gains may be donated to a public charity and you get a tax deduction for the full fair market value.
This year, TJF has made it easier than ever to make a tax-free gift through a new online QCD tool (www.freewill.com/qcd/tjf). In less than 10 minutes, you can calculate your required IRA distribution and the gift you would like to donate directly to your favorite charity.
Donate Appreciated Securities
The end of the year is an ideal time to consider a charitable contribution of long-term appreciated securities (e.g. stocks, bonds, and/or mutual funds that have gone up in value). It is one of the most tax-efficient ways to give and doesn’t affect your cash flow. Any long-term appreciated securities with unrealized gains (meaning they were purchased more than one year ago and have a current value greater than their original cost), may be donated to a public charity (such as TJF) and you get a tax deduction for the full fair market value of the securities—up to 30% of your adjusted gross income.
Any publicly traded appreciated securities may be gifted directly into an existing or newly established TJF fund, including a Donor Advised Fund. Since the securities are donated rather than sold, capital gains taxes from selling those securities are avoided—which means you have more to give away than if you sold the securities, paid the taxes, and then made a donation.
As with any financial planning, consult your advisor on tax laws about how they apply to you. To discuss these programs or any other tax advantaged giving options, consider having a confidential conversation with Randy Parrish, TJF interim CEO and president, at rparrish@ujft.org or 757-965-6104 or Kaitlyn Oelsner, TJF director of philanthropy, at koelsner@ujft.org or 757-965-6103.