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Forms of Gifts
Many different types of assets can be used as gifts to the Community Foundation, from the simplest gift of cash to complex appreciated assets. Donors may select the gift that is most advantageous to their particular situation. If you are considering gifting an appreciated asset, the Foundation staff will work with you and your financial advisor prior to completing the gift.
Cash is the simplest and most common way to give. Cash, usually in the form of a check, allows the donor to claim a current income tax deduction of up to 50 percent of their adjusted gross income in the year of the gift with a five-year carry-forward period. The actual savings from gifts of cash depend on the donor’s tax bracket.
Credit Card Gifts are accepted using either VISA or Mastercard. With a credit card gift, 100 percent of your gift is passed on to the Foundation fund you select, just as with other gifts of cash.
Appreciated Property Gifts (stocks, bonds, mutual funds or real estate) can provide greater tax benefits than a cash gift, especially if they have a low cost basis. You receive a charitable deduction for the full market value and avoid capital gains.
Closely Held Stock Gifts (shares in a privately owned business, usually held by family members, management or the corporation itself) are usually not available for public sale. This stock can be donated to the Foundation and the donor is entitled to a charitable deduction for the appraised fair market value. The donor avoids the tax on capital gains. After receiving the gift, the Foundation may sell the stock to the corporation or to other shareholders at its fair market value.
Tangible Personal Property Gifts (art, antiques, collectibles, jewelry, rare books, stamp and coin collections, etc.) are deductible at full fair market value when gifted to a public charity. Such gifts require a qualified appraisal and the use of the contributed property is related to the tax-exempt purposes of the charity. For example, a gift of a rare book to a library would be deductible. If the use of the contributed property is unrelated to the tax-exempt purposes of the charity – for example, giving the Community Foundation a stamp collection to sell – then the donor may claim a charitable deduction on the basis of the property.
Life Insurance Gifts enable donors to make a future major gift to the Community Foundation at a relatively modest cost. Donors may name the Foundation as the owner and beneficiary of existing policies that they no longer need. Donors may also purchase new policies and name the Foundation as the owner and beneficiary. Donors are entitled to a federal income tax deduction for the cash surrender value in the year of the gift.
Qualified Retirement Plan Assets (such as IRAs) make excellent charitable gifts because they enjoy favorable tax treatment prior to retirement but are severely taxed at the death of the plan participant. Qualified plans may be subject to income tax, estate tax, and an excess accumulation tax, which can total 80 percent or more of the value. It may be advantageous to leave other assets to heirs and to name the Community Foundation as the beneficiary of the retirement plan.
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