Assets Can Be “Complicated”. Charitable Gift Planning Need Not Be

by | May 11, 2022 | charitable estate planning, charitable giving, couples' estate planning

As we help our Geyer law clients define the legacy they want to leave to both their heirs and their community, we often turn to the advisors from Central Indiana Community Foundation to help turn those charitable dreams and plans into reality…..For our Geyer Law blog, our editor interviewed Sarah Weaver, Senior Director for Charitable Gift Planning & Legal Counsel, Central Indiana Community Foundation…

Many clients own appreciated “complex” or “complicated” assets including:

  • real estate holdings
  • appreciated stock
  • shares of a privately owned business or partnership
  • limited partnership interests
  • mineral rights
  • insurance policies
  • retirement plan assets
  • artwork and collectibles
  • precious gems

Were the client to sell any of these assets, capital gains tax would immediately be due. Giving appreciated assets to charity instead can be a win-win for donors and the recipient charities.

For donors with many philanthropic interests, a donor-advised fund is a great option to accomplish charitable goals. The asset is contributed to a donor-advised fund at CICF, CICF then liquidates the gift, and the proceeds are deposited into the donor-advised fund for ultimate distribution to the charities of the donor’s choice. This enables the donor to receive a charitable income tax deduction and avoid paying capital gains tax on the appreciation of the gifted asset.

Complex decisions can be made in bite-sized pieces:
Donors who know exactly which charity they want to benefit can choose to make a contribution directly to that charity and take a tax deduction for that year. Donors who want the tax deduction now, but want to preserve the right to defer the decision about which charities will benefit, can establish a donor-advised fund with CICF. Over ensuing years, the donor – or others appointed by the donor – may then choose different charitable organizations to which gifts will be made at different periods of time.

Complex choices can be made simpler through research done by the Foundation:
CICF researches and monitors locally based charitable organizations so donors can be assured their funds are being handled responsibly. Its Effective Philanthropy team works with families, helping them define their values and interests and developing a philanthropic strategy to guide grants from the fund. Quite often, the mutigenerational aspect of a donor-advised fund brings together grandparents, parents, and grandchildren in planning and executing “good works” based on shared goals.

Complex company philanthropy can utilize corporate-advised funds:
Like individual and family donors, companies can also establish advised funds through which CICF can provide comprehensive philanthropic services, and the company can make grants to charitable organizations that align with corporate values.

Complex tax, accounting and legal issues can be handled by the Foundation:
CICF handles all back-office administration, including tax, accounting and legal compliance, for its advised funds. Due diligence to verify 501(c)(3) status of grantee organizations and seamless electronic transfers of grant funds ensure that CICF does all the work while donors have all the philanthropic fun!

Community foundations exist to help build and strengthen communities, bringing together people and organizations to make a difference. Assets can be complicated, but with the expert help and compassionate advice from Central Indiana Community Foundation, multi-generational charitable planning need not be!