As you approach the end of the year and your major fundraising quarter, here are some important planned gifts you should be seeking from donors:
Appreciated stocks or mutual funds. If your donors have appreciated stocks that they have owned for 1 year or longer, they can give those shares to your organization, get a deduction for the full fair market value of the shares, and pay no capital gains tax. It’s not often Congress gives a gift like that.
Charitable IRA rollover. If you have donors that are 70 ½ or older, they can direct a portion of their required minimum IRA distribution (up to $100,000) to most public charities. They report no income, they take no deduction, but the distribution can satisfy some or all of their required minimum distribution, which saves income taxes.
They need to make the rollover distribution from an IRA for which they did not take a deduction on their form 1040. If they do, the exclusion could be limited or even eliminated. They should make it from a rollover IRA.
Donor Advised Funds (DAFs) Prompt your donors to consider requesting a distribution from their Donor Advised Fund. Many donors don’t think about their DAF unless reminded. Put an item in your solicitation materials about requesting a distribution from their DAF. Remind them also to notify you about their DAF distribution, because the DAF itself may not notify you.
Donation for 100% of Adjusted Gross Income. Not many donors can make a donation of cash large enough to equal 100% of their adjusted gross income. If you have that rare individual who can make a large donation of cash, consider encouraging donors to do it. It must go to a public charity and not a DAF or private foundation. Congress wanted these donations to have an immediate impact. This ends at the end of 2021.
Donation of $300 cash ($600 for married filing joint) to charity if you don’t itemize. Many donors can no longer itemize, but they can still give $300 cash individually or $600 for a joint return to the charity and take a deduction on the first page of their 1040 rather than their Schedule A. This also ends at the end of 2021.
These are some of the simplest ways your donors can give to your organization at year-end. If you have questions or need assistance, please call us at (847) 729-3939. If you have a donor who wants to make a planned gift, please call for an appointment. We are available by phone, in-person, or zoom.