In these economic times, many of us are re-thinking the value of the assets we hold. Retirement portfolios may be coming back, but are not where they were a few years ago. Our homes are not worth what we thought they were, and there are a lot of them out there for purchase. Many may not even be able to think about purchasing a home anyway, because they don’t have a job, or their hours have been cut.
Valerie RumboughSo it goes for individuals. But have you thought about your church lately? Churches and other charitable organizations are feeling the pinch as well, because charitable giving many times is the first thing that goes when money gets tight.
How can you continue to support your church if your cash flow isn’t flowing very well? Many have chosen to get creative, by donating non-cash assets. Real estate, stocks and bonds, rental property and vacation homes are just a few of the items that people choose to give to their churches.
If you are interested in pursuing something like this, but don’t want to necessarily give your entire vacation home, for example, to your church, you can place it in an account called a Donor Advised Fund. This type of account, operated by a foundation or other institution, holds the funds in your name, until you “advise” the institution to pay a certain amount to the charity of your choice, subject to approval by the institution holding the funds. You receive a tax deduction for the entire value placed into the account up front; then as funds are disbursed, you are recognized by the charity for the gift that was made.
There are limitations, however, to this type of account, so check with your CPA or financial advisor as to whether this fits for you. This is a wonderful way to assist your church and the kingdom of God, while receiving some nice tax benefits.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.