June Professional Advisor News

There’s little doubt that you’ve seen extensive news coverage of the so-called “Big Beautiful Bill” ( H.R. 1) that passed the House of Representatives by a 215-214 vote on May 22, 2025, and now moves to the Senate, where significant changes are expected before final passage. And that is the primary takeaway here: Significant changes are expected. This makes it impossible to predict right now how your clients might be impacted by tax law changes.

Still, it’s important to be aware of key components of the bill that could impact estate and financial planning. Three key provisions rise to the top as advisors consider how their charitable clients might be affected:

No sunset of estate tax exemption
The bill makes permanent the expiring 2017 tax cuts under the Tax Cuts and Jobs Act (TCJA). This means that the much-anticipated sunset of the increased estate tax exemption might not happen at the end of this year after all. If the estate tax exemption remains high, a smaller segment of your clients will be motivated to use charitable giving as a way to avoid estate tax. Still, though, because people rarely give to a charitable organization solely for tax avoidance purposes, your clients remain very interested in discussing charitable giving and incorporating philanthropy into their estate and financial plans.

Standard deduction stays high
Proposals in the bill would make permanent the higher standard deduction levels from the TCJA, and even add an additional temporary increase through 2028. The upshot here is that few taxpayers itemize their deductions, reducing the number of people eligible to claim a charitable deduction. The still-high standard deduction likely could signal continuation of the decline in charitable giving following the 2017 tax cuts. On the flip side, the bill introduces a modest “above-the-line” charitable deduction for nonitemizers — $150 for individuals and $300 for joint filers.

Increased taxes on private foundations
The bill sharply increases excise taxes on the investment income of large private foundations, raising rates from the current 1.39% to as much as 10% for the largest entities, although private foundations with less than $50 million in assets would see no change. What this means for your charitable clients is that private foundations may become less attractive. Many nonprofit leaders are concerned that this could impact charitable giving; it might also mean that donor-advised funds could become even more attractive. GiveWell Community Foundation remains committed to helping your clients establish donor-advised funds and other vehicles to actively support their favorite charities as well as ensure that critical local needs are addressed.

So what’s next? The Senate is expected to begin its markup this month, with the process likely extending into July or August as both chambers reconcile differences before sending the bill to President Trump for signature.

As always, the Community Foundation will keep you posted! Please reach out anytime. We are happy to discuss options for your clients’ charitable giving to ensure that they’re supporting their favorite causes and important local needs in the most effective ways possible under any set of tax laws.

GiveWell Community Foundation is poised to work with you and other tax and estate planning advisors as you help your clients navigate the unprecedented wealth transfer of an estimated $84 trillion from baby boomers and the silent generation to their descendants over the next two decades.

This historic shift presents a unique opportunity for advisors to discuss charitable giving plans as a strategic and impactful component of estate and financial planning. As your clients retire and start planning their charitable legacies, pay particularly close attention to IRAs and other retirement plans as key components of a philanthropy plan.

You’re likely aware that retirees can use Qualified Charitable Distributions (QCDs) from traditional IRAs to both fulfill philanthropic goals and manage tax burdens. As your retiring clients reach the age (73) when required minimum distributions (RMDs) are mandatory, the RMDs can trigger significant taxable income.

QCDs offer some potential relief by allowing IRA owners aged 70½ or older to transfer up to $108,000 per year (2025 limit) directly to qualified charities, including certain funds at the Community Foundation, thereby satisfying RMD requirements while keeping the distribution out of the donor’s adjusted gross income. This approach not only reduces income taxes but can also help moderate Medicare premiums and the taxable portion of Social Security benefits, and is available to all eligible taxpayers, regardless of whether they itemize deductions.

But the benefits don’t stop there! Beyond immediate tax benefits, QCDs can play a strategic role in long-term estate planning. Here’s why:

• Traditional IRAs can leave heirs with a substantial tax bill because inherited IRAs must generally be depleted within ten years and are taxed as ordinary income.

• By directing RMDs to charitable organizations through QCDs, your high-net-worth clients can gradually reduce the value of their IRAs, thereby reducing their future potential estate tax burden.

• QCDs are not subject to the income percentage limits that typically apply to charitable deductions, making them a flexible tool for those looking to balance philanthropic intent with smart estate management.

• A potential bright spot on the horizon is proposed legislation that would extend eligibility recipients of QCDs to donor-advised funds. This would make it even easier for your clients to integrate their financial and estate plans with the charitable strategies already in place through the Community Foundation.

By incorporating QCDs into a client’s estate and financial plan, you can help your retiree clients maximize the impact of their giving while minimizing tax exposure for themselves and their heirs. Our team is always happy to help evaluate options for implementing the charitable components of your clients’ estate plans. Please reach out anytime!

As you advise clients on charitable giving, you’re likely aware of the growing popularity of the donor-advised fund as a flexible, tax-efficient tool for philanthropy. Many families appreciate how donor-advised funds can streamline giving, foster family engagement, and serve as a launchpad for deeper community impact.

GiveWell Community Foundation’s staff regularly engages with professional advisors who work with clients utilizing the Community Foundation in a variety of ways, ranging from contributing to important initiatives, supporting the Community Foundation’s endowments, making qualified charitable distributions from IRAs, or participating in Community Foundation-led initiatives that address critical local priorities.

Interestingly, we have discovered that some advisors were not aware that their clients had established donor-advised funds through national financial institutions. Although these clients are familiar with the Community Foundation, they simply did not know how we could help them in multiple ways, including establishing a donor-advised fund to support favorite charitable organizations.

It’s easier – and more beneficial – than you might think for your client to move a donor-advised fund to the Community Foundation! Here’s what you need to know:

Tax and administrative advantages are the same
GiveWell Community Foundation offers donor-advised funds with the same tax and administrative advantages as national providers, including:

• Online access for clients to view fund balances, contributions, and grant history

• Simple grantmaking process to qualified nonprofit organizations

• Consolidated tax reporting

• Comprehensive back-office support for administration, tax receipts, recordkeeping, and compliance with 501(c)(3) requirements

• Favorable tax deductibility for contributions, including gifts of cash, securities, and other assets

Added value at the Community Foundation
Unlike many national donor-advised fund sponsors, your Community Foundation offers a suite of high-touch, locally-informed services that can enhance your clients’ philanthropic strategies, such as:

• Personalized service from staff experienced in structuring complex gifts (e.g., appreciated stock, real estate, estate gifts)

• Local expertise on community needs, nonprofit effectiveness, and high impact grantmaking

• Opportunities for collaboration with other donors and access to educational forums featuring local and national experts

• Deep engagement in specific issue areas, including educational opportunities and hands-on involvement for clients and their families

• Impact measurement support to help clients track and communicate the outcomes of their giving

• Family and corporate philanthropy services to foster long-term, multi-generational charitable engagement

• Administrative fees that are reinvested back into the community, supporting local operations and amplifying the Community Foundation’s mission and work

• Direct access to local experts who can research and recommend causes aligned with your clients’ goals

• Staff with deep community roots who maintain close relationships with nonprofit leaders and stay attuned to emerging needs

What next?
The steps to transfer a donor-advised fund are surprisingly simple:

• Work with the Community Foundation’s professional staff to establish a donor-advised fund. Our straightforward, easy-to-complete method makes it seamless and fast. Your client can mirror the terms of the existing donor-advised fund or adjust successor advisors and legacy provisions based on their current charitable intentions. Our staff will walk through the process with you and your client.

• Work with your client to request a grant from the national donor-advised fund provider. Depending on the provider, this can sometimes be completed all online. Designate the Community Foundation (and reference the name of the new donor-advised fund if possible) as the grant recipient.

• Your client may be able to grant the entire balance in one transaction. If not, most of the balance can be transferred to fund the new donor-advised fund, and you can work with your client to transfer the rest later.

• Before closing the donor-advised fund at the national provider, your client should download grant history and contribution information for future reference and tax documentation. Note that transfers between donor-advised funds are tax-neutral; these transactions are not taxable events.

We look forward to working with you and your clients to make the most of their charitable giving, especially by establishing a donor-advised fund at GiveWell Community Foundation to serve as the cornerstone of the client’s charitable giving plan. With a donor-advised fund as a baseline, your client can begin to tap into all of the many ways the Community Foundation serves as a home for charitable giving, from strategic grant making to legacy giving and everything in between.

 

Most of your philanthropic clients likely support a wide variety of charities year after year. The causes they support represent a range of motivations, including personal experience, a role as a volunteer or board member, family tradition, or alignment with values and community priorities.

Many of the charitable organizations your clients support are local. That’s important to note because it means that your clients are especially well-positioned to lean into GiveWell Community Foundation’s unique position as the hub for charitable giving and local knowledge. Here are three reasons that matters:

• Clients can tap into the Community Foundation professional staff’s knowledge about specific nonprofit organizations, including financial information, data about the impact of a its programs, and observations of the organization’s areas of greatest need.

• Clients can choose from a variety of fund types depending on what they’d like to achieve. A designated fund, for example, allows your client to set aside tax-deductible dollars that are dedicated to supporting a specific nonprofit organization. Through the Community Foundation’s services, funds are distributed over time to the nonprofit while the assets remaining in the fund are protected from the organization’s creditors. Another example is a field of interest fund, which leverages the Community Foundation’s extensive research about the needs of the community and the nonprofit programs that are addressing those needs.

• Clients can work with the Community Foundation to leave a bequest to an endowment fund to support community needs for generations to come. As a perpetual organization, the Community Foundation ensures that charitable giving stays strong in our region to address important needs as they evolve over time.

Of course, if your client establishes a donor-advised fund at GiveWell Community Foundation, the fund can support local causes as well as causes across the country. As the hub for your clients’ charitable giving, our tools and our team are dedicated to helping your clients achieve their charitable goals both near and far. Working with your local Community Foundation, no matter what a particular client’s charitable priorities may be, is itself a strong show of support for philanthropy right here in our community.