HOMEPAGE for this issue: December 8, 2010 Download PDF Version

Year-end charitable giving that benefits the Catholic community

Special to the Denver Catholic Register

Catholics are called to live a life of service to God and to each other. Catholic religious, educational and charitable organizations meeting the needs of the least of our brothers and sisters depend on the generosity of Catholics to be the hands of Christ in our community.

In addition to transforming and sustaining the lives of those in need,  The Catholic Foundation for the Roman Catholic Church in Northern Colorado transforms the lives of its contributors by making it easy for them to help others, give back and make a positive impact on the northern Colorado Catholic community. 

Additionally, there are financial and tax benefits enjoyed by givers to the foundation.

Ways to contribute
There are a number of ways to contribute. Cash always makes a great gift.  But it may be time to think outside the “cash box.” Individuals and families with appreciated, marketable securities owned for at least a year and a day, may donate shares of stock in lieu of writing a check.\

Many portfolios have improved since last year.  The value of charitable gifts is determined on the gift date, and is not based on the value of the stock when it was acquired.  Donors of appreciated stock won’t owe any long-term capital gains tax on the appreciation.

Other assets that can make great charitable gifts include mutual funds, real estate and tangible personal property. Those considering non-cash gifts should talk with their legal and tax advisors about the benefits and get advice on which assets would make the best gift in their circumstances. The Catholic Foundation can assist in addressing issues of charitable intent, gift transfer and recognition. The foundation also maintains a referral list of attorneys and accountants who understand and support the charitable goals of northern Colorado Catholics.

When to give
What individuals and families decide to give will determine when they give. With gifts of cash, supporters’ checks can be postmarked as late as Dec. 31.  But that won’t work with gifts of stock.  An outright gift of stock via a stock transfer, although fairly speedy, takes some time.  Contributors will want to initiate their stock gifts with plenty of lead time, generally 10 business days before Dec. 31 so it can transfer before year-end. 

Although outright gifts of real estate can take weeks and sometimes months to complete, with savvy planning, they can be made to happen quicker.  Just don’t push the deadline.  Bringing donor advisors into the process early is a good idea.  A donor’s attorney or advisor should be able to map out the steps and assist them in the process.  Donors may need to consider a qualified appraisal, marketability, environmental assessments, and availability of your advisors during a busy time of the year.

Any of these assets can be used to fund a gift arrangement that provides tax benefits, a lifetime stream of income, and a future gift to The Catholic Foundation. 

Depending on the type of gift, donors may potentially dispose of a non-income producing asset, increase current income, diversify their portfolio, provide income for their retirement, or possibly accomplish all of these goals at once.

Timing
Timing is important. If you want to receive the benefits before the end of the year, charitable gifts must be completed by Dec. 31.  Uncle Sam is pretty stubborn about that!

First, donors should itemize their deductions to take advantage of the benefits.  There is a simple, legal strategy around itemizing every year.  Plan your gift-giving for this year and next, and make both years’ gifts this year. You can provide yourself with a larger charitable income tax deduction; and, coupled with your other deductions; it can make itemizing this year worthwhile. When next year’s tax season rolls around, you may be able to skip the itemization.

Second, if your income increased substantially this year, or you sold a highly appreciated asset, you may benefit from more deductions to offset this event and reduce your taxable income.  Increasing your charitable giving by establishing a donor-advised fund can be just the ticket.

Third, you may want to consider giving more this year because your tax situation is a known quantity; next year, well, who knows what changes could come about in the tax code? Completing a gift by Dec. 31 may be a good option.