2025 Roadwork Ahead!
Drop a Pin at OCCF for Your Philanthropic Solutions
At the Community Foundation, we’ve recently been asked by attorneys, CPAs and financial advisors for a “road map” to determine which type of charitable planning tool is best for a particular client.
We love that idea! We’re always happy to be a sounding board for any client situation where charitable giving is an option. Please reach out anytime you and a client are discussing philanthropy. To get your wheels turning, here is a roadmap of three scenarios that have popped up frequently over the last few weeks.
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Streamline and Tax-Optimize Charitable Giving
If: Your client supports many different charities every year…
Then: A Donor-Advised Fund at the Community Foundation can be an excellent tool for helping clients organize their giving to favorite charities, such as local organizations, places of worship or an out-of-state alma mater. Clients appreciate how easy it is to support multiple charities while the Community Foundation’s systems keep track of everything. Plus, clients can give stock and other appreciated assets to their Donor-Advised Funds, often avoiding capital gains tax and simplifying tax receipts to provide their accountants when tax time rolls around.
Support a Specific Charity While Minimizing Risk
If: Your client has supported a particular charity for many years, intends for that support to continue and wants to be sure the funds are used effectively…
Then: A Donor-Designated Fund at the Community Foundation allows a client to make tax-deductible gifts–during life and through estate gifts–that are set aside to be used exclusively for a particular organization. The Community Foundation distributes the funds annually according to the client’s instructions. An advantage of a designated fund is that the assets are out of creditors’ reach if the charity were to run into financial trouble.
Plus, a client who is 70 ½ or older can make Qualified Charitable Distributions up to $105,000 per year (increasing to $108,000 in 2025) from their IRAs to a Donor-Designated Fund.
Leave a Charitable Bequest and Reap Significant Tax Benefits
If: Your client intends to provide for charities in an estate plan and owns an IRA or other qualified retirement plan …
Then: By naming a fund at the Community Foundation as the beneficiary of a qualified retirement plan, your client achieves extremely tax-efficient results. Not only is estate tax avoided on the retirement plan assets flowing to the charitable fund, but with the steep tax on retirement plan proceeds left to heirs, significant income tax can also be avoided.
The bottom line here is this:
If you encounter any situation with a client where charitable giving could be involved …
Then please reach out! Most of the time, the Community Foundation can offer a solution that meets both the client’s tax and estate planning goals and their objectives for supporting their favorite charities. At the very least, we can point you in the right direction.
The experienced team at the Community Foundation serves as a charitable giving resource to enhance the knowledgeable service you give your clients. We’ll help you structure a giving plan that maximizes tax advantages while achieving your clients’ charitable and financial goals. This newsletter is provided for informational purposes only. It is not intended as legal, accounting or financial planning advice.