Year End Tax Planning Tips for Charitable Deductions

IN THIS ISSUE:

Year End Tax Planning for Charitable Deductions,

2021 Giving Trends & Motivations, Donor Privacy, and more.

GREETINGS FROM THE

COMMUNITY FOUNDATION TEAM

As the end of the year approaches quickly, it’s hard to believe that 2021 will soon be in the books. The Community Foundation for a greater Richmond is honored to work with you and your clients to structure charitable giving plans and establish funds that achieve both your clients’ charitable objectives, while also addressing our region’s greatest needs.

As we enter into an era of potential tax reform, we pledge to keep you informed of legislative developments and how they could impact your business as you advise clients on matters pertaining to philanthropy. In this issue, we are pleased to share insights from Michele McKinnon, Partner at McGuireWoods and member of the Foundation’s Professional Advisor Council, about strategies you might consider as you advise your clients at the end of the year and into 2022.

If you have a question pertaining to charitable planning, or ideas about topics you would like to see covered in future issues, we encourage you to reach out. Please enjoy this issue of The Philanthropic Advisor and thank you for all you do to move the Richmond region forward through philanthropy.

Brandon Butterworth

Sr. Philanthropic Advisor

bbutterworth@cfrichmond.org

FEATURE ARTICLE:

YEAR-END TAX PLANNING FOR CHARITABLE CONTRIBUTIONS

by Michele A. W. McKinnon, Partner, McGuireWoods

Donors support charitable organizations and causes for a variety of reasons, including belief in the organization’s mission and that their gift can make a difference, as well as personal fulfillment. No one gives to charity solely to obtain a tax deduction, and personal reasons for giving usually outweigh the tax benefits.

However, experience shows that donors do want to receive the tax benefits associated with their philanthropy and they structure their giving in a tax efficient manner. In this article, you will find a review of information helpful to donors planning their gifts now, including:

Tax legislation enacted during the COVID pandemic that offers some additional tax benefits in 2021,
Planned giving techniques that continue to be attractive in the current environment, and
Proposals for income tax changes expected to become effective in 2022.

Read full article

REMINDER: GIFT & TRANSFER INSTRUCTIONS

The Community Foundation is grateful for the opportunity to be an extension of your team in advising and serving clients with philanthropic interests. For clients who wish to make gifts to the Community Foundation this year, please use the following instructions for commonly used gifting methods.

Gifts by Check

Please send all checks to our NEW secure lockbox at:

The Community Foundation

P.O. Box 716495

Philadelphia, PA 19171-6495

Stock and Wire Transfers

For detailed transfer instructions, please click here.

GIVING NEWS & STORIES

Trends that inform what your clients are thinking even if they aren't saying it

Hot off the press, the 2021 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households confirms that wealthy families are as committed as ever to the nonprofit sector and community causes. Of the 1,626 households surveyed with annual income of at least $200,000 or a net worth of at least $1 million (not counting a primary residence), 88% gave to at least one charity in 2020. Indeed, average giving by this demographic grew to $43,195 from $29,269--a 48% increase--between 2017 and 2020.

The motivations and preferences behind that giving are also changing. Here are a few examples:

More than 20% of affluent households supported social and racial justice causes, and impact investing nearly doubled, during the period covered by the study.

Diverse donors and younger donors are beginning to prefer structured giving vehicles, such as donor-advised funds, over direct giving to operating charities.

Affluent volunteers give twice as much as affluent people who don’t volunteer.

At the Community Foundation, we are observing many of these trends as well. We have experienced Philanthropic Advisors and several offerings to support your clients as they consider how they want to give back.

Donor Privacy: Ongoing Concern for Common Client Priority

In an era of social media and intense polarization of rhetoric, it’s no wonder so many charitable individuals and families choose to give to their favorite causes anonymously. And, bolstered by the United States Supreme Court’s decision this summer in favor of donor privacy (affirming a position advocated by parties across the political spectrum), this trend is likely to continue.

At the Community Foundation, we make it easy for you to help your clients who wish to give anonymously by establishing a charitable giving fund. For example:

Your client can select a name for the fund that is something less obvious than their own. For example, instead of the “Sam and Vera Barker Fund,” your client can name the fund the “SVB Fund,” “Two Dessert Family Legacy Fund,” or whatever the client would like.

Sometimes your client will wish to recommend that certain grants (but not all grants) from a fund be issued anonymously. The Community Foundation offers your clients the ability to opt into anonymity on a grant-by-grant basis.

Your client can rest assured that no solicitations will flow directly to them; the Community Foundation can handle all correspondence related to nonprofit grants from the fund, if the client desires.

The Community Foundation does not disclose information about your client or the fund to any third party, nor is detailed information available through a Form 990.

Please contact us if we can answer any questions.

Community Foundation Professional Advisor Council