Your retired clients are more likely to get involved in the community, are excellent candidates for Qualified Charitable Distributions, less likely to itemize deductions, more likely to want to get their children and grandchildren involved in their philanthropy, and thinking about their legacy. Learn how to help your retired clients achieve their philanthropic goals by working with the Community Foundation of the Holland/Zeeland Area.
Here are five characteristics of retirees and their charitable giving situations that will help you serve your retired clients.
Greater connection to community
Retirees often feel a greater connection to their community and favorite organizations. Whether it’s because a retiree’s income and corresponding giving capacity are more predictable, or because a retiree has more time, getting involved with a nonprofit by volunteering can help retirees stay active and even avoid loneliness. The team at the community foundation stays connected with the many nonprofit organizations in our region, and we are happy to serve as a sounding board for your retired clients who want to get involved.
Excellent candidates for Qualified Charitable Distributions
Your clients who are at least age 70½ can direct a tax-free distribution (up to $100,000 per spouse in 2023) from an IRA to a qualified charity such as a field-of-interest or unrestricted fund at the community foundation. For your clients who must take Required Minimum Distributions (RMDs), the Qualified Charitable Distribution (QCD) is especially beneficial. This is because the distribution to charity counts toward the RMDs and therefore never lands in the client’s taxable income.
Less likely to itemize deductions
Many retirees apply the standard deduction on their income tax returns because they don’t have many expenses that qualify for itemization, such as business expenses and mortgage interest deductions. Help your retired clients evaluate whether itemizing deductions in certain years could be beneficial. Through a donor-advised fund at CFHZ, your clients may be able to concentrate charitable contributions into particular tax years and benefit from the deductions above and beyond the standard deduction. This is called “bunching,” and a donor-advised fund can help your client take advantage of itemizing tax deductions while still allowing them to provide steady support to nonprofits in years that follow the itemizing year.
More interested in involving children and grandchildren in their philanthropy
CFHZ is happy to help your retired clients fulfill their desire to stay connected with their children and grandchildren, including formalizing roles for these family members as advisors and successor advisors of your client’s donor-advised fund. This is often an excellent and easy way to structure philanthropic priorities for generational wealth as well as create positive, authentic communication channels across an extended family.
Thinking about their legacy
Retirees are likely to be thinking about their estate plans and the legacy they would like to create for their family and community. CFHZ offers charitable estate planning services to assist donors with achieving their charitable goals during their lifetime and beyond. Combining overall financial and estate planning with charitable planned gifts can help donors impact our community while minimizing their tax burden, providing for their family, honoring loved ones, preserving their family name, and reinforcing their personal values. The community foundation will work with your retired clients to create a highly customized plan for the charitable portion of their estate to make things simple for their estate financial representative, and ensure their wishes are met beyond their lifetime.
We always encourage donors to first seek the advice of their legal, financial, or tax advisors when considering a gift of non-cash assets. While our team does not offer tax advice, we stay knowledgeable on charitable giving strategies. Please contact Colleen Hill, Vice President of Development & Donor Services, at chill@cfhz.org or by calling 616–994–8853 if we can help you serve your clients.