Are You Prepared to Receive Non-cash Gifts?

As we head towards the end of the year, we enter a season of significant giving, especially as donors consider their final gifts of the year and the impact of those gifts on their taxes. And while we tend to think of cash giving at year-end, the truth is that over 90 percent of wealth is held in assets and not cash, which is especially true of older donors.

So how do you help these donors consider a gift out of an asset rather than cash at year-end? Here are two ideas to consider communicating to your donors.

First, if a donor has held an appreciated asset for at least one year, they can give that asset and gain a significant tax advantage. By donating the asset directly to a charity (rather than selling it and giving the proceeds to the charity), the donor bypasses the capital gains tax and receives the full fair market value as a tax deduction.

While publicly traded stock is the most common form of a noncash gift, other assets can also include:

• Restricted stock
• Bonds
• Real estate
• Privately held business interests

Second, if a donor is 70 ½ or older they can make a Qualified Charitable Distribution from their IRA directly to a qualified charity. And because it is a contribution, it is not counted as income to the donor, meaning they bypass tax on that distribution. Even better, if a donor is 72, such a distribution counts against their Required Minimum Distribution for the year.

These are just two year-end non cash giving options. To consider even more options and ways to communicate with your donors, you may want to check out the Sharpe Group materials.

Now is the time to begin communicating these options to your donors. Consider an insert in your receipt mail, a column in your newsletter, or even a series of emails highlighting these opportunities. Many donors don’t realize they can support your cause through these means, so make sure they know!

If you have questions about the disposition of such gifts, please feel free to reach out to our good friend, Dan Skerbitz who is a partner at the CPA firm Carr, Riggs & Ingram. You can email him at dskerbitz@cricpa.com.