Most Popular Blog Posts of 2010

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.

2. True Greatness: A Tribute to Peter Spokes. In 2010, a man who championed fathering and impacted many of us passed away. Here, Bill High relays how Peter’s life touched him personally.

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.

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Giving in the News: IRA Rollover Provision Extended

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.

Who qualifies?
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.

Giving in the News: IRA Charitable Rollover Extension Likely

UPDATE: On December 17, 2010, the President signed this bill into law, extending the IRA Charitable Rollover for 2010 & 2011. Read about doing this through Servant Foundation here.

As part of the ongoing tax debate in Washington, last night the Democrats in the Senate released The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, their version of the bill central to the debate over the extension of the Bush tax cuts. It includes a number of popular extenders that were not included in the House version, including the ability for some taxpayers to make gifts to charity from Individual Retirement Accounts (IRAs).

The provision, which originally expired on Dec. 31, 2009, allows taxpayers over age 70 1/2 to distribute gifts of up to $100,000 to charities from an IRA without paying taxes on the gifted amount. This helps retirees meet their minimum distribution requirements without boosting their incomes. If this new bill passes, this would be available until Dec. 31, 2011. Gifts made in January 2011 could also count towards 2010.

Political pundits expect the bill to meet little resistance in the Senate, but it may face difficulties in the House. Congressional Democrats, disgruntled over the President’s compromise with the Republicans, are expected to cause some delays.

Though donor advised funds do not qualify for IRA charitable distributions, Servant Foundation offers donors the ability to open “designated funds” to receive these gifts. Designated funds are similar to DAFs, but require the donor to name the recipient charity up front. The donor then advises Servant on the timing for sending grants out to the designated charity. Donors can establish multiple designated funds if a number of charities are intended as recipients.

For more information on designated funds or questions on IRA distributions, contact Jonathan at 913-538-7842 or jharrison@servantchristian.com.

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An Inconvenient Truth: Charitable Climate Change on Capitol Hill

While heated issues like health care and the housing market take center stage, the climate for charitable giving in America is quietly headed for the big chill as Capitol Hill turns a cold shoulder to tax breaks and other key incentives. The government’s insatiable appetite for spending and regulation combined with current financial woes has created the perfect storm, unlike anything to hit the nonprofit world in our era.

So is giving headed for extinction?
Let’s look at some of the underlying philosophy that has given rise to the charitable climate crisis. Since the 1940s, when taxes started to be collected through automatic withholding, there’s been a growing belief in government that a taxpayer’s paycheck belongs to them. In essence, you’re only allowed to spend what the government does not keep, or “withhold” from you.

So if the government allows a tax break for what you spend on charity, they believe that they should mandate the use of those funds (after all, they own it all anyway). In reference to nonprofit funding, Congressman Xavier Becerra (D-CA) has said, “Congress has an obligation to assure that their dollars are being well-spent.” Some have even gone as far as to say that the charitable income tax deduction is a government subsidy. Read the rest of this entry »