November 2024 Professional Advisor News

You’re busy as 2024 draws to a close! The professional staff at GiveWell Community Foundation is committed to researching, curating, and keeping you up-to-date on the latest trends and developments that could impact your clients’ charitable giving strategies. If you only have 60 seconds, we recommend scanning these three quick updates:

Best practices for donating to hurricane relief efforts
As your clients continue to support hurricane relief efforts, keep in mind that even in disaster response situations, tax rules still come into play. Make sure you’re aware of how the IRS addresses “qualified disaster relief” related to both donors and recipient charitable organizations. Please reach out to the Community Foundation anytime to learn more about how your clients can ensure that their hurricane relief dollars are making the biggest difference possible. When disaster strikes our region, we help facilitate charitable giving to legitimate efforts that make a real impact. And when disaster strikes elsewhere, we help support our Community Foundation partners across the country.

Charitable giving can help bridge generations’ definitions of “wealthy”
The recently-released Bank of America Private Bank Study of Wealthy Americans is a must-read (or at least a must-skim) report because it offers insights into shifting views on wealth, and it also highlights a disconnect in inheritance expectations. Notably, younger individuals tend to rally around a definition of “wealthy” in terms of having the means to live a life of purpose and make a difference. Older generations are more likely to define “wealth” in financial terms. Important for charitable planning is the finding that older generations may not be planning to leave the inheritance that their children and grandchildren expect. Working with the Community Foundation to help clients establish a multi-generational charitable giving plan makes it easier to get expectations out in the open and keep the entire family meaningfully involved in the family’s wealth over the long term.

Must-know tips for clients’ year-end giving
We know you’ve got a lot on your plate as the end of the year approaches. Even if charitable giving does not appear on the surface to be a burning issue in client meetings, it’s still important that you keep in mind a few essential charitable giving techniques. Please scan these three notable techniques, and reach out to the Community Foundation on any matter related to charitable giving:

• Encourage clients to consider giving highly-appreciated stock, not cash, thereby maximizing tax benefits.
• Help clients evaluate a “bundling” or “bunching” technique to make gifts to donor-advised funds, exceeding the currently high standard deduction to be able to itemize. Then, donor-advised fund assets can be used over the next few years to support clients’ favorite charities.
• Help clients who are 70½ and older make Qualified Charitable Distributions (QCDs) directly from IRAs to designated or field-of-interest funds (donor-advised funds are ineligible recipients) at the Community Foundation – up to $105,000 per spouse. Added bonus, QCDs satisfy RMDs!

Reach out today! November is the time to set things in motion, so you don’t get caught up in the year-end rush. We are here for you.

Charitable giving during the final few weeks of the year makes up a significant portion of total revenue for many nonprofit organizations. Some research even shows that a whopping 26% of giving occurs in December! What this means is that there’s a pretty good chance your clients are already considering end-of-year gifts to support causes they care about, are being asked by at least one nonprofit organization for an end-of-year gift, or likely both. That’s why it’s important for you to talk with clients well in advance of the year-end giving rush.

Here are six tips to help jumpstart your client conversations over the next few weeks. Just give us a call if you’d like to dive deeper! We stand ready to help.

• Check in on goals. By discussing your clients’ overall charitable goals, you can ascertain which causes your clients are passionate about and why they care, how much they’d like to contribute in the short term and over time, the impact they’d like to see, and whether they intend to provide for their favorite nonprofits in their estate plan. Against this backdrop, year-end giving strategies become easier to develop.

• Explore a wide variety of fund types. Donor-advised funds are very popular vehicles, and community foundations are ideal providers of donor-advised funds for clients who want to keep their philanthropy local and benefit from the Community Foundation’s focus, expertise, and mission-driven 501(c)(3) status. But donor-advised funds are not the only types of funds that GiveWell Community Foundation offers. Your clients can also establish field-of-interest funds or designated funds, both endowed and non-endowed. Our professional staff will help you evaluate what type of fund (or funds) is best suited for a particular client. For example, a client age 70½ or older considering a Qualified Charitable Distribution from an IRA is a great candidate to establish a field-of-interest or designated fund.

• Understand the Community Foundation’s donor-advised fund advantages. As you work with clients for whom a donor-advised fund is appropriate, be sure you understand why the Community Foundation is such a great fit for so many philanthropic individuals and families. Indeed, the Community Foundation is the truly local option for donor-advised funds. Large, national providers associated with financial institutions also offer donor-advised funds, but those vehicles are typically not supported by representatives that live in our community, and know and understand local needs.

• Know how a donor-advised fund works. It’s easy for a client to establish a donor-advised fund at the Community Foundation. After completing simple paperwork, your client will make a tax-deductible gift (of cash or, ideally, stock or other highly appreciated asset) to the Community Foundation to fund the donor-advised fund. The funds can then be granted out to eligible 501(c)(3) public charities at the client’s recommendation over time. Many clients find that a donor-advised fund operates very similar to a private foundation, but without the sometimes hefty administrative overhead costs and burdensome restrictions. A donor-advised fund can be named after the client (e.g., Smith Family Fund) or named to reflect the purpose of the client’s giving (e.g., Fund for the Future of Anytown), or even structured to enable the client to give anonymously.

• Supercharge both tax benefits and giving. Giving through a donor-advised fund at the Community Foundation may allow a client to tap a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most. Bunching has been a useful tool in the current era of a high standard deduction!

• Don’t default to cash. Many clients naturally think of cash as the source for their year-end giving. That’s a missed opportunity! Most of the time, highly-appreciated marketable securities (or other highly-appreciated, long-term assets) are a better gift to a client’s fund at the Community Foundation or other public charity because the client is eligible for a tax deduction at the assets’ fair market value, and the proceeds from the sale of the assets will flow into the client’s fund at the Community Foundation free from capital gains tax. That means more funds are available to support the client’s favorite causes.

Philanthropy is an important topic of conversation with your clients, not just at the end of the year, but always. Our professional staff is here to help you ensure that your clients can meet their financial and charitable goals through year-end giving and beyond.

As a professional advisor, you offer clients valuable knowledge and support for everything in their lives touched by a dollar sign. We’re grateful that so many of you regularly reach out to GiveWell Community Foundation when you need a sounding board about how to handle charitable gifts of complex assets such as real estate or closely-held stock, or when your client wants to set up donor-advised funds for children or grandchildren, or when your client is ready to establish a multi-generational charitable legacy that can improve our community for years to come.

But what about when clients ask you for the names of nonprofit organizations in our community that are addressing particular needs, whether the arts, social services, education, green spaces, healthcare, animal rescue, or anything else? Please call us with those questions, too! Our professional staff can offer far more expertise than you and your client will find in an online search. We know the community, we know the nonprofit organizations, and, most importantly, we know the actual people in those organizations who are doing the work every day to make a difference. 

Even your clients who’ve already established a donor-advised fund at the Community Foundation may still have questions from time to time about what’s going on at the organizations they support, or maybe they are looking for new organizations to support as their charitable interests grow and evolve over the years.

You and your clients might be surprised at the depth and extent of the Community Foundation’s wraparound philanthropic advisory services provided alongside the nuts and bolts of helping your clients organize their tax-savvy charitable giving. We offer expert guidance on local data-driven community needs, in-depth knowledge of nonprofit organizations, and personalized support in developing giving strategies. Our comprehensive approach not only enhances your clients’ giving experience, but it also helps ensure that charitable dollars are used most effectively to address community needs – which is precisely what your clients want.

So the next time your clients (or you!) have questions about a nonprofit organization in our service area, across the country or the globe for that matter, just reach out to the Community Foundation. We’ve got you!