When we talk about planned giving, we often talk about why people make gifts, but we don’t often elaborate on what specific gifts people can make. This will be the first of a three-part article on those specific gifts you can make – either now, during the remainder of your life, or at the end of your life – to benefit the ongoing work of your church.
First, let’s remember that not everyone is in the same situation. We all have different levels of assets, different income needs between now and the end of our lives, different tax situations, and different ideas of what we’d like to do with our assets at the end of our lives. Because of this, not every type of gift that I’ll discuss may be right for you. However, I’m confident that one of the gifts I’ll discuss will be very appropriate for you.
This month I’m going to talk about what we call Current Gifts. These are gifts that can be made right now. They are the simplest of gifts and easiest to accomplish. Hence, they are often appropriate for just about everyone.
Gifts of Cash are the simplest gifts. Simply writing a check will accomplish this and your church can make use of the funds immediately. The gift is tax deductible in the current year and reduces funds in your estate that could be subject to estate taxes.
Gifts of Securities have become very popular. These gifts can include stocks, mutual funds, ETF’s, bonds, bond funds, REIT’s and a host of other securities – virtually any security that is publicly traded. There are several valuable advantages to a Gift of Securities:
· You avoid any brokerage commission
· You avoid any capital gains taxes (regardless of the increase in value)
· Your church receives the full market value of the security
· You may deduct the full market value of the security (regardless of what you originally paid for it)
Making a gift of a security is very easy using a one-page form from our web site (https://vaumfoundation.org/GOPT-securities ) Simply complete it and give it to your broker or financial advisor. The instructions on the sheet will tell them everything they need to do to process your gift.
Gifts of Property may include a piece of art or a collection of rare coins or a personal item of value. These are a bit more complicated. First, most churches have a Gift Acceptance Committee which will evaluate the proposed gift and determine if the church wants to accept it. (How do I put this tactfully … while something may be of great value to the donor, it may not hold that same value for the church.) If the gift is accepted by the church, a receipt of the gift will be given to the donor. It is not the church’s responsibility (and in many cases, the church does not have the technical expertise) to assess the fair market value of the gift for the determination of the tax deduction for the donor. This is the responsibility (and cost, if necessary) of the donor. Once the gift has been made, accepted and receipted, a current year tax deduction can be taken for the fair market value of the gift and the cost of the appraisal if necessary.
Gifts of Real Estate are very similar to gifts of property, but more time consuming and potentially problematic. The donor should first obtain a certified appraisal of the property and a certificate indicating that the property is without environmental concerns. Since virtually all gifts of real estate are immediately sold upon acceptance, the Gift Acceptance Committee will evaluate the value of the property and estimate the time and cost to sell it. They will accept a property only if there appears to be a healthy cost/benefit relationship. Once the property is accepted and title is transferred, the donor may take the full market value of the property, as well as the costs incurred for the appraisal and environmental survey, as current year deductions.
Next month – deferred gifts – life insurance, retirement assets and more!