Americans are known, from the time of the Revolution, for their deep desire to become involved with and have an impact on various societal issues and alleviate suffering where there’s great need.
“I have seen Americans making great and sincere sacrifices for the key common good and a hundred times I have noticed that, when needs be, they almost always gave each other faithful support” (Alex de Tocqueville1)
iGiftFund believes that philanthropy is, fundamentally, more than just “charity” or “charitable giving”. Instead, philanthropy is a practice of both social and financial self-interest with reducing the tax bite being the donor’s initial motivator.
But first let’s look deeper into the characteristics of two most popular forms of forms of charitable giving in America and how they differ.
1. Checkbook Giving – a gift made to causes ad hoc with little further communication or follow up on the part of donor or the nonprofit recipient.
- Little emotion from the donor…much like payment of bills
- Usually given in smaller amounts from current income
- Best income tax benefits available
- Little need for professional advice
- Often given in response to a charity’s solicitation
- Often not tax-smart
2. Planned Giving – a charitable gift made during lifetime or at death as part of a donor’s overall financial and/or estate plan.
- High degree of emotion
- Usually given in larger amounts from long-term appreciated assets
- Two tax benefits: income tax and no capital gains tax
- Professional advice often needed
- Given “for reasons unique to the donor”…typically not from being asked
That’s right. Giving appreciated assets other than cash is tax-smart. You can give appreciated marketable securities and a wide range of illiquid assets to your iGiftFund DAF. You receive the highest tax benefits and have more dollars to support your favorite charities. You are now free to develop your philanthropic interests and create your enduring charitable legacy.
The appreciated assets you can give to your iGiftFund DAF include:
- marketable securities
- non-marketable or “complex” assets that typically can’t quickly or easily be exchanged for cash including:
- privately-held C- and S-Corp stock shares
- LLCs and LPs
- real estate
- restricted stock, etc.
- non-marketable or “complex” assets that typically can’t quickly or easily be exchanged for cash including:
For many American families the majority of family wealth is illiquid, i.e. real estate and shares in closely held businesses. These types of assets are often overlooked and untapped for carrying-out the family’s philanthropic interests.
At iGiftFund we engage the industry’s leading authority on gifts of complex assets to help you in planning the gift, to review and vet all necessary documentation, facilitate the sale of the assets and transfer of proceeds into the DAF in a highly tax efficient manner.
The takeaway: Don’t limit your charitable-giving options to cash. Consider leveraging your tax benefits by donating a wide range of appreciated asset types to your DAF at iGiftFund. You have more options to create your philanthropic legacy than you may have thought of.
Notes
1 Alexis de Tocqueville, a French civil servant from an aristocratic family. He wrote
Democracy in America following a nine month visit to the United States in 1831-1832. Quote from Philanthropy in “Democracy in America” by de Tocqueville, www.learning togive.org/resources.