We’ve recently been asked by attorneys, CPAs, and financial advisors for a “cheat sheet” that will help determine which type of charitable planning tool is best for a particular client. To get your wheels turning, here are a few scenarios that have popped up frequently over the last few weeks.

Think beyond cash

If: Your client has been supporting charitable organizations with cash gifts but wants a more tax-savvy option.

Then: 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 CFHZ 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!

Streamline and tax-optimize charitable giving

If: Your client supports many different charities every year…

Then: A donor-advised fund at CFHZ can be an excellent tool to help a client organize their giving to favorite charities, such as local organizations, a place of worship, and an out-of-state alma mater. Donors can focus on the joy of giving while our team takes care of the administrative details. When your client contributes to their DAF, they receive an immediate tax deduction and the flexibility to recommend grants over time. A DAF at CFHZ also allows donors the opportunity to engage their children as advisors during their lifetime and beyond. Plus, clients can give stock and other appreciated assets to their donor-advised funds, often avoiding capital gains tax and simplifying tax receipts to provide their accountants when tax time rolls around.

Support a specific charity while minimizing risk

If: Your client has supported a particular charity for many years, intends for that support to continue, and also wants to be sure that the funds are used effectively …

Then: Through a nonprofit fund at CFHZ, a client can make tax-deductible gifts–during life and through estate gifts–that are set aside to be used exclusively for a particular organization. The community foundation makes distributions from the fund according to the client’s wishes. An advantage of a nonprofit fund is that the assets are out of creditors’ reach if the charity were to run into financial trouble. Plus, a client who is 70 ½ or older can make Qualified Charitable Distributions up to $105,000 per year (increasing to $108,000 in 2025) from IRAs to a designated fund.

Leave a charitable bequest and reap significant tax benefits

If: Your client intends to provide for charities in an estate plan and owns an IRA or other qualified retirement plan …

Then: By naming a fund at the community foundation as the beneficiary of a qualified retirement plan, your client achieves extremely tax-efficient results. Not only is estate tax avoided on the retirement plan assets flowing to the charitable fund, but income tax is also avoided. Indeed, the income tax hit on retirement proceeds left to heirs can be steep.

The bottom line is if you encounter any situation with a client where charitable giving could be involved – then please reach out! Most of the time, CFHZ can offer a solution that meets both the client’s tax and estate planning goals and the client’s objectives for supporting their favorite charities. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients.

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.