Tips for Smart Year End Giving
Year-end giving makes up a significant portion of total revenue for most charitable organizations. Research even shows that a whopping 25% of online giving occurs in December! What this means is that there’s a pretty good chance your clients are already considering end-of-year gifts to support causes they care about, are being asked by at least one nonprofit for an end-of-year gift, or both. That’s why it’s important for you to talk with clients well in advance of the year-end giving rush. Here are six year-end giving tips to help jumpstart or continue your client conversations. Please contact us if you would like more information. We are here for you during this busy season.
1. Check in on goals
By discussing your clients’ overall charitable goals, you can ascertain which causes your clients are passionate about and why they care, how much they’d like to contribute in the short term and over time, the impact they’d like to see, and whether they intend to provide for their favorite charities in their estate plan. Against this backdrop, year-end giving strategies become easier to develop.
2. Explore a wide variety of fund types
Donor-advised funds are not the only types of fund we offer. Your clients can also establish field-of-interest funds, nonprofit funds, unrestricted funds, or scholarship funds. Our team will help you evaluate what type of fund (or funds) is best suited for a particular client. For example, a client considering a Qualified Charitable Distribution from an IRA is a great candidate to establish a field-of-interest fund.
3. Understand CFHZ’s unique donor-advised fund advantages
As you work with clients for whom a donor-advised fund (DAF) is appropriate, we hope you’ll consider the benefits of a DAF at CFHZ. The community foundation is the truly local option for donor-advised funds. We offer our donor-advised fund holders personal attention and deeper connections to the nonprofits whose work is essential to effecting local community change. Our donors benefit from our focus, expertise, and mission-driven status.
4. Know how a donor-advised fund works
It’s easy for a client to establish a DAF at CFHZ. After completing simple paperwork, your client will make a tax-deductible gift (of cash, stock, or another highly-appreciated asset) to CFHZ to fund the DAF. The funds can then be granted out to eligible charities at the client’s recommendation over time. Many clients find that a DAF operates almost identically to a private foundation, but without the sometimes hefty administrative overhead costs and burdensome restrictions. A DAF can be named after the client (e.g., Smith Family Fund) or named to reflect the purpose of the client’s giving (e.g., Fund for the Future of Holland/Zeeland), or structured to enable the client to give anonymously.
5. Supercharge both tax benefits and giving
Giving through a DAF at the community foundation may allow a client to utilize a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most.
6. Don’t default to cash
Many clients naturally think of cash as the source for their year-end giving. That’s a missed opportunity! Most of the time, highly-appreciated marketable securities (or other highly-appreciated, long-term assets) are a better gift to a client’s fund at the community foundation or other public charity because the client is eligible for a tax deduction at the assets’ fair market value, and the proceeds from the sale of the assets will flow into the client’s fund at CFHZ free from capital gains tax. That means more funds are available to support the client’s favorite causes.
Philanthropy is an important topic of conversation with your clients, not just at the end of the year, but always. Our team is here to help you ensure that your clients can meet their financial and charitable goals through year-end giving and beyond!
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.