The season of giving is in full swing and if you are planning to make a gift, now is the time to use the Community Foundation as your resource for charitable giving. There are only four more business days in the year to get your year-end gifts processed for 2021. So whether you are looking at an income tax problem, a capital gains problem, or you’re ready to make a significant charitable gift, now is the time to finalize your gifts for 2021.

With over 300 different funds, your gift to the Community Foundation can be compounded and maximized with the gifts of other donors who share your values and beliefs. You can also establish a new charitable fund to meet your philanthropic goals.

If you want to make a charitable gift and need help deciding where to donate, our donor relations team is ready and available to confidentially assist you. Reach out to our team here.

Below are strategies for charitable giving in 2021 that we encourage you to discuss with your tax and or financial advisors to determine what is best for you. 

Income tax problem

• Using your IRA to give– Qualified Charitable Distributions (QCD)

If you are over the age of 70 1/2, you can fulfill your required minimum distribution by making a QCD from your IRA which is not included in your adjusted gross income.

It’s important to remember that to qualify as a QCD the distribution is not allowed as a contribution to a donor advised fund.

A big benefit of partnering with the Community Foundation for year-end giving is that the Community Foundation has several types of charitable funds that qualify for a QCD. Plus, by giving through the Community Foundation you get the benefit of our team of experts who help you make the biggest impact possible for the issues you care about the most.

Capital gains problem

• Gift your appreciated stock

Not only are you getting the tax deduction for the value of the securities you donate, you are also removing your capital gains tax liability. For those who want to maximize your charitable giving, you are able to give more because you don’t have to pay the additional tax on the appreciated stock. You can have a bigger impact with your gift. 

If you plan to make a gift of stock, contact the Community Foundation before Dec. 28.

Charitable contributions in general

• If you itemize or plan to donate more than $600 to charity in 2021

Bunch your giving – combine your planned charitable gifts into one year to take advantage of the charitable deduction.

A year-end gift to a donor advised fund enables you to front-load multiple years’ worth of support for causes and organizations important to you that you intend to support in the years to come. By bunching your gifts into one year, you get your tax deduction this year and lock in long-term support for one or more nonprofit organizations that are near and dear to your heart.

For example, if you normally donate $5,000 to charity each year, consider giving $15,000 in one year and skip the next two.

• Gift of cash (2021 ONLY)

For 2021 only, gifts of cash to a qualified charity, like the Community Foundation, are deductible up to 100% of adjusted gross income (AGI). If you have significant assets, cash on hand and low AGI, this may be a way to significantly reduce federal tax owed for 2021. The deduction available for a gift of cash to a donor advised fund remains at 60% of AGI.

If you want to claim a charitable deduction this year, gifts must be made by Dec. 31, 2021. If you plan to make a gift of stock, contact the Community Foundation before Dec. 28 by calling (810) 984-4761. Checks written and mailed by the end of the year will be deductible in 2021.

This information is not a substitute for expert legal, tax or other professional advice, and we strongly encourage donors to work with your professional advisor to determine the impact of making a charitable gift on your personal tax situation.