As part of our name change from Servant Christian Community Foundation to National Christian Foundation Heartland, we’ve moved the blog to a new location. To read the latest posts and catch news from the generosity movement, visit:
My new favorite source for anything web-related is www.idealware.org. I was first introduced to them through their Nonprofit Social Media Decision Guide, which is a beefy manual to help charities get started on Facebook and Twitter. But since then, they’ve been a fountain of information on everything from blogging to content management. I follow their blog, catch them on Twitter and get their e-newsletter.
Unlike many free marketing guides, what I appreciate about Idealware’s content is its depth. It’s easy to find the opinion of “marketers” online and people who tell you that you need to be utilizing technology to reach supporters. It’s hard to find someone who will show you how. I hope this site is as useful to you as it has been to me.
To kick off the new year, we thought we’d look back briefly at last year. From the Haiti disaster in January to the tax extensions in December, 2010 was a significant year. Our topics on the blog ranged from cell phone campaigns to the Chilean miners. Here are the our most popular posts from 2010:
1. An Inconvenient Truth: Charitable Climate Change on Capitol Hill. Much has happened on the political front since this was originally posted back in February, but Washington is still experiencing a significant shift in attitude toward the charitable deduction. The 7 suggestions listed here are as timely as ever.
3. Charities Must Brace for the Impact of Tax Increases. Unprecedented government spending. Historic defecits. Aging social programs. No matter your political leanings, the reality is that the tax bill will be coming due soon. This will have an enormous impact on nonprofits as babyboomers move into retirement and younger generations are saddled with new taxes.
4. Five Online Giving Trends for 2010. Giving on the web is not new anymore, but it still hasn’t matured to fully rival its older fundraising counterparts. This past year saw a surge in donations via mobile devices as well, with numerous small gifts making up for large total dollars.
5. IRA Rollover Provision Extended. When Congress extended the Bush tax cuts, it also re-instated this popular giving tool for those over 70 1/2. An IRA charitable rollover is a great way to give for those who are required to take annual minimum distributions.
Giving away stock is a great way to give, and positive returns in the markets have caused many donors to start looking at this strategy harder. Here is my stock giving checklist, answering the most common questions I receive for stock giving.
1. Look at stocks that have been held more than one year. In order for you to deduct the fair market value of the stock, the shares need to be considered “long term” (held more than 1 year). For stocks held one year or less, you can only deduct what you paid for them.
2. Look for the most appreciated stocks. When deciding which stocks are the best candidates to give, look for those that have had the highest increase in value since you’ve purchased them. When giving appreciated stock, the full value can usually be deducted (see above point) without recognizing any of the capital gains. Let’s say you would like to give $100, and you have two stocks worth $100: Stock A was purchased at $30 and Stock B at $80. By giving the Stock A, you can still deduct the $100, but you never have to recognize the $70 worth of gain ($100-$30). If you have stocks that have depreciated, most financial planners recommend you sell them first, then give the cash.
Once you’ve selected the stocks, the transaction is really two simple steps. Using a “donor advised fund” — like Servant’s Giving Funds — allows you to give in one transaction, then distribute easily to multiple organizations at a later date.
1. Deliver a “Letter of Authorization” to your broker. Only you can initiate a transfer from your account, so your broker will need to receive instructions from you (usually signed). You will need to include the nonprofit’s account information. For stock gifts to Servant, we’ve created this form to help you get all the needed information to your broker. It is imperative that you give your broker time to complete the transaction in this year. Some offices require several business days to complete transactions.
In order to get a tax deduction in 2010, the stocks have to be received by the nonprofit’s brokerage account no later than December 31.
2. Notify your charity of the gift. Once the gift has been initiated, notify the nonprofit that the stock is coming, noting any recommendations for its use. For gifts to Servant, we prefer you use the form linked above to let us know about the gift. At minimum, we will need to know (a) your name/address for the receipt, (b) number/type of shares gifted, (c) the donor advised fund toward which you’re giving.
1. Receive a receipt from the charity. You will need to retain this for your tax returns. Receipts from the foundation will include the total mean value of the gift on the day it was given. This price is the average of the highest and lowest traded prices for that day. Work with your tax advisor to determine the necessary reporting on your tax return. IRS Form 8283 will be required if your noncash gifts for the year are above $500.
2. Give the proceeds! This is the best part of the entire process, sending the money on to nonprofits! For foundation members, log on to your fund at www.servantchristian.com or call our office at (913) 310-0279 to schedule grants out of your donor advised funds!
There is still time to give a 2010 stock gift! Always make sure you consult your financial planner and tax advisor for advice tailored to your individual situation.
Today, Congress extended the IRA Charitable Rollover Provision to December 31, 2011. This new law gives you another opportunity to make an annual gift of up to $100,000 from your IRA to a public charity(s), if you qualify. Although gifts to donor-advised funds (such as your Servant Giving Fund) are not allowed, we can help you establish a “Designated Fund” that allows you to (a) contribute from your IRA, (b) designate which charity you wish to receive the funds, and (c) advise Servant about the timing of grant checks to the charity – as well as the investment of the funds prior to distribution.
Can I rollover funds from my IRA to charity for the 2010 tax year?
Yes, but only if your gift is made by January 31, 2011. Gifts made from February 1 – December 31, 2011, will qualify as 2011 gifts.
During 2010 and 2011, lifetime distributions from Traditional IRAs by plan owners who have attained at least age 70 ½ (on the date of distribution) to charity may distribute up to $100,000 per year from their IRA directly to a charitable organization and exclude the contributed amount from their gross income for tax purposes. This amount can be counted towards the annual mandatory IRA distribution.
Who can receive IRA distributions at Servant?
IRA distributions can be made to field of interest funds, designated funds, scholarships, and restricted/general endowments in which donors or their designees have no advisory rights. IRA distributions cannot go to a donor-advised fund, a supporting organization, or a private foundation. The distribution cannot be made in connection with a Charitable Gift Annuity or Charitable Trust, and the donor may receive no quid pro quo benefits in exchange for their contribution.
So, now that I qualify and my IRA qualifies, how do I do this?
1. Contact your IRA custodian. The custodian will make the check payable directly to Servant Foundation.
2. Establish your Designated Fund(s) with Servant indicating the recipient charity(s).
3. Obtain a written receipt from Servant.
4. Work with your accountant to determine the exclusion on your tax return and any net taxable income amount which will need to be included on your 1040.
5. Servant will distribute the funds in accordance with your Designated Fund Agreement.
To learn more about IRA Charitable Rollovers with Servant, call Jonathan at 913-310-0279.