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Charitable Gift Fund
A way to simplify and enhance your giving
Anabaptist Foundation's charitable gift fund is a tool that enables you to support the charities of your choice while reaping significant financial planning and tax benefits. You may give cash, securities, real estate, commodities, or anything on which a fair market value can be placed. Donors have the privilege to recommend when the gifts will be distributed and which charities will benefit.
How it works
You donate cash or other assets with a fair market value (real estate, securities, mutual fund shares, etc.) to Anabaptist Foundation. We turn your contribution into cash and place the money in the charitable gift fund. Your gift represents an irrevocable contribution to Anabaptist Foundation and is not refundable to you. The money is then available for distribution to charities you recommend at any time you wish. Assets contributed to the gift fund become the property of the foundation, and the donor retains no legal control over the gift. Instead, the donor is entitled to give non-binding advice to the foundation about the distribution of the funds. Because Anabaptist Foundation is a public charity, you get a tax deduction for the year in which you make the gift, even if not all of the funds are disbursed to other charities during that year.
A special charitable gift fund is also available to donors who wish to make a large donation or accumulate funds over a period of time for one or more special projects. Net investment earnings are credited to the special charitable gift fund after a modest charge for administrative services is deducted. Since these funds are for a special purpose, they are usually held for a longer period of time.
Advantages for donors
Flexibility - You can give a wide variety of assets: cash, real estate, securities, commodities, or anything on which a fair market value can be placed. The fund can accommodate either a one-time gift or multiple gifts over time.
Freedom - The foundation takes responsibility to liquidate non-cash assets and to manage gift proceeds.
Avoid capital gains tax - When appreciated real estate or securities are donated, the donor does not have to pay tax on capital gains. This leaves more money to go to charity.
Immediate tax deduction - In the year the gift is made, you get a federal income tax deduction for the fair market value of the property held long term, up to 30 percent of your adjusted gross income. Any deduction you qualify for above these limits may be carried forward for up to five successive years.
Tax contribution receipt - Anabaptist Foundation will issue contribution receipts to donors for tax purposes.
Privacy - If the donor wishes to give anonymously, the foundation can act as a screen between the donor and recipient charities.
Unexpected charitable needs - If you maintain a charitable nest egg, you can designate funds to charities for emergency needs so you can participate in opportunities that lay closest to your heart.
Accounting information - You receive a quarterly statement of your fund activity showing opening balance, amounts received, interest earned, disbursements, and closing balance. Additional statements can be requested at any time.
A Case Study
Ken and Barbara Miller own a 22-acre tract of land which they purchased 15 years ago for $18,000. Their local congregation is planning to build a fellowship hall, and the Millers wish to contribute. They would like to sell the land, but since the land has appreciated in value to almost $90,000, they would be subject to capital gains taxes on about $70,000 of appreciation. In their financial situation, this would translate into a capital gains tax of over $10,000.
After consulting with an Anabaptist Foundation representative, the Millers donate the land to Anabaptist Foundation. The foundation sells the land and places the sale proceeds in a charitable gift fund. The Millers get an income tax deduction of $90,000 (fair market value of the property), which can be spread over five successive years, up to 30 percent of adjusted gross income each year, and they pay no capital gains taxes.
After the sale of the property, the Millers immediately recommend disbursement of $20,000 from the gift fund to their church's building fund. Over the next six years, they recommend that the remainder of the money be used for gifts to three different mission organizations and for annual contributions to the Christian schools that their grandchildren attend.
Using Anabaptist Foundation as a vehicle for their giving, the Millers were able to donate almost $90,000 to the charities of their choice, avoid over $10,000 in capital gains taxes, and gain significant federal income tax deductions.
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