2014 Okoboji Foundation Nonprofit Forum
-
Upload
joe-sorenson -
Category
Documents
-
view
23 -
download
0
Transcript of 2014 Okoboji Foundation Nonprofit Forum
Live…Give…Better Together.
Community Foundation of Greater Des Moines
Wade A. Den Hartog, Director of Affiliates & Charitable Partners
Joe Sorenson, Manager of Affiliate Relations
Presentation Outline
Power of Endowments
Endow Iowa
Charitable Gift Annuities
Keep Iowa Growing
Power of Endowments
YEAR 1
Establish a Named Fund or contribute to an existing fund
$10,000 gift
Initial gift has been invested
YEAR 15
$9,000 in cumulative grants and services$16,000 balance
1 Time
YEAR 50
$66,000 in cumulative grants and services$57,000 balance
6+ Times
YEAR 25
$19,000 in cumulative grants and services$23,000 balance
2 Times
assumes 4.5% annual payout and 8.5% rate of return
Power of Endowments
Donors who want to assist in the sustainability of your organization may find giving to an endowment appealing
Endowments can be use to support:General OperatingProgramsStaff Positions
ExamplesOkoboji Foundation Operations EndowmentJohnny Danos Professional Development Fund
Creating Lasting Legacies Through Endow Iowa
Helping You Help Your Donors
Endow Iowa
An Incredible Incentive for Donors
Must be held at a qualified community foundation
Iowa charitable causes
No more than 5% annual spending/granting policy
Endow IowaThen donors can be eligible for
• 25% state income tax credit for contribution – in addition to federal deduction (can carry forward for up to five (5) years)
• Limit each year, per taxpayer and also statewide
• Tax credit paperwork submitted; awarded on a first come-first served basis
• Tax Credit Letter/# sent by IEDA once awarded
Endow IowaWith Endow Iowa, donations to Community Foundation endowments cost donors less.
$10,000 giftLess tax benefits:Net federal tax savings -3,960Endow Iowa Tax Credit -2,500Net Cost of Gift $3,540
Note: Use appreciated assets subject to capital gains and the savings are even better!
Disclaimer: Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. The Community Foundation does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation.
Endow IowaWho Uses it?
• Donors who wish to be charitable to Iowa non-profits
• Donors with a taxable event• Inheritance• Sale of business• Influx of income
• Donors who pay Iowa state income tax
**Endow Iowa does not apply toward estate taxes
Charitable Tools
Win – Win Scenarios
Charitable IRA Rollover
It MIGHT be back?!
• For Individuals 701/2 and older
• Can transfer up to $100K of IRA assets directly to charity
• No charitable deduction but the money is not realized as income for tax purposes
• Iowa Taxpayers can qualify for Endow Iowa tax credits!
Gift Examples
1. Appreciated Securities2.Gifts of Grain
The Johnsons
A GIFT OF APPRECIATED SECURITIES• Ted and Marlene own 1,000
shares of stock• They originally paid $10 per
share or $10,000 more than 11 years ago
• The fair market value today is $37 per share or $37,000
• If they sell the stock, they’ll have $27,000 in long-term capital gain income
• If they are in the 20% LTGC tax bracket, their bill equals $27,000x.20=$5,400
• Their net amount after selling the shares will be $31,600
The Johnsons
CONTINUED
• If they instead give the stock to charity, they bypass all $5,400 of capital gains tax
• Plus, they can deduct the fair market value of their stock $37,000 (up to 30% of their adjusted gross income)
• In addition they get 25% state tax credit
• They have a 5-year carry forward, too
Janice Jones
A GIFT OF GRAIN• Donor gifts 2,500 bushels of
corn• Elevator transfers
ownership of corn to the Community Foundation
• Donor does not include the sale of corn as income (charitable deduction is $0)
• Donor receives Endow Iowa tax credit based on actual selling price of corn ($7.39 per bushel X 2,500 bushels= $18,475)
• Donor deducts cost of growing the corn
• Donor saves in self-employment federal and state income tax
Charitable Gift Annuities
A Charitable Gift Annuity (CGA) is an agreement in which a donor makes a gift to a nonprofit and
in turn receives guaranteed annual income payments for the rest of their life and or the life
of one other person.
• Donors 62 years of age and older.• Committed individuals wishing to give, but
needing security of income for retirement.• Donors wishing for their income stream to be
continued but being relieved of investment responsibilities.
• Donors with highly appreciated but low income producing securities or other property.
Donors benefit from a CGA
• The “rate” of payment on each CGA is dependent upon the age of the donor(s) at the time of the gift. These rates are determined by the Council on Gift Annuities.
• The older you are when you start receiving payments, the larger the payments. These payments can be monthly, quarterly, semi-annually or annually depending upon the amount.
• Donors can choose to receive a lower rate of return for their payments if they wish.
Who determines the annual rate of payment to my donor?
Keep Iowa GrowingIowa’s Farmland Giving Program
…for the love of the land
Why?Farmland is by far Iowa’s most valuable asset:
Total number of farms 88,631 Total amount of farmland 30.6 million acres Average farm size 345 acres Average dollar value per acre $8,716 Aggregate value of Iowa farmland
is estimated at $267 billion
Why?
The Community Foundation’s 30 affiliated county community foundations, together with Polk County, hold a combined 9.5 million acres of farmland.
If Keep Iowa Growing captured only 1% of this farmland, the value of assets held for charitable causes would be an estimated $866 million.
What types of Gifts will be accepted through Keep Iowa Growing?
Outright gifts of farmland made during life Bequests Retained life interest
For term of years For term of life donor For term of life of donor and spouse (“last-to-die”)
Questions?