Once you and your client have determined a fund at the Greater Saint Louis Community Foundation is a smart tool to advance charitable giving and tax planning goals, the next step is to decide what to give and when to give it.
One of the distinct advantages of partnering with the Foundation is the variety of ways we enable your client to give - one of the widest selections of any public charity in our region.
Our respected objectivity and technical skills will help advisors and their clients develop a smooth, seamless gifting process. The Foundation has the capacity to work with illiquid or closely held assets seen as too awkward to handle by many charities.
Cash is a popular asset to give because of its simplicity, though less cost effective than appreciated assets.
Stocks, Bonds, and Mutual Funds
Marketable securities are the most common gift asset because they present distinct charitable tax benefits. Donors are typically eligible for an income tax deduction for the security’s full fair market value. Capital gains taxes are avoided because the contributed asset is eventually sold by the Foundation, a tax-exempt entity. These benefits lower the out-of-pocket cost of giving.
Appreciated real estate can be an excellent lifetime gift. In most cases, your client would be eligible for an income tax deduction equal to the appraised value. Capital gains taxes are avoided since the asset is sold by the Foundation, a tax-exempt entity.
Closely Held Business Interests including Subchapter S Stock
Gifting appreciated business interests offers significant tax advantages and can be a tool when creating a business succession plan. Donors are usually eligible for an income tax deduction equal to the appraised value of the asset. Capital gains taxes are avoided since the asset is sold by the Foundation, a tax-exempt entity.
As advisors know, donors often make their most substantial and effective gifts as part of their estate plan. Tools for testamentary gifts are included in the tax code and work with many of the assets noted above.
One of the simplest estate giving options is a bequest. First, your client would designate a gift to a specific fund at the Foundation. A fund agreement would then detail their charitable intentions and the role the Foundation plays in stewarding the request. This option is a great way to transform a donor advised fund used for lifetime giving into a charitable legacy that continues into perpetuity.
Retirement or Qualified Plan Assets
Many IRAs or other qualified retirement plans allow donors to leave unused portions of these assets to charity. Current law allows some individuals to make lifetime charitable distributions of these plans. These are among the best assets for charitable giving due to the significant estate tax burden likely paid by heirs.
Charitable Gift Annuities
Charitable gift annuities offer two key benefits: simplicity and a reliable income. Your client would receive life income, determined by their age, in exchange for a charitable gift established with a simple annuity contract. The portion of the gift not used to pay the income stream goes to advance the donor’s goals through a fund at the Foundation. The asset contributed reduces the size of a donor’s estate and may decrease or eliminate overall estate taxes.
Similar to charitable gift annuities, charitable remainder trusts provide donors with life income that is determined by factors such as age and the terms of the trust. The trust’s remainder will establish or increase an existing fund at the Foundation. Unlike gift annuities, the terms of these trusts are flexible and enable donors to contribute other assets beyond cash or appreciated securities.
A charitable lead trust works like a remainder trust but in reverse. The income benefits the charity during the your client’s life and, at the trust’s termination, the remainder reverts back to their family.
Please contact Christine Burghoff at 314-880-4967 for additional information on ways to give.
St. Louis Community Foundation
#2 Oak Knoll Park, St. Louis, MO 63105
tel 314-588-8200, fax 314-588-8088