Creative Ways to Give
Our church is abundantly blessed! As God has been at work in the lives of our people in the area of financial stewardship, many have asked for more specific guidance on how to give to the church. The following is a list of creative ways to give.
Gifts of Cash
Nothing is as simple and direct as giving cash. You can make a general donation, which we direct toward our annual budget or designate a gift for a specific purpose such as The Building Fund. However, you aren’t limited to giving cash. In fact your tax benefits may be greater if you donate other property, such as assets that have appreciated in value.
Gifts of Securities
Stocks or other investments that have grown in value and that you have held for more than one year can become a substantial gift made at a low net cost to you. You receive a charitable deduction for the donation of these assets, and it’s based on their fair market value on the date of the gift. But there’s a bonus-- you avoid all federal capital gains tax that would otherwise be due on a sale of the assets. You may even tithe with stock all year and take your cash normally used for tithing and develop a stock portfolio just for future tithing and special giving to God’s work.
Or, take a capital loss yourself. If you own securities worth less now than when you purchased them, sell them and contribute the proceeds. Then you can take a capital loss on your tax return, subject to certain limitations, and a charitable deduction for the gift of the proceeds.
Gifts of Real Estate
Your property opens the door to a unique giving opportunity: donate the property outright, place it in trust, or retain the use of it for life.
Before you sell real estate that would result in a sizable capital gains tax, consider donating property held more than one year-- you’ll avoid the tax and realize a charitable deduction for the full fair market value of the property
If you like the tax advantages that a gift of real estate would offer, but you and your spouse want to continue living in your personal residence, consider a retained life estate. By deeding your home to a charitable organization now, both of you can obtain valuable tax savings. Even though the organization would not actually take possession of the residence until after the death of a survivor, you receive an immediate income tax charitable deduction because the gift cannot be revoked.
Gifts of Life Insurance
As you review your year-end financial status, remember that a no-longer-needed life insurance policy is a viable gift. Policies that are paid up may be deductible as gifts for their approximate replacement value. Policies that still require premiums to be paid can be given while you continue to pay the premiums, prompting income tax deductions when the church is named both owner and beneficiary. A new policy on your life naming the church as beneficiary guarantees the church a future gift as well, depending on state law.
Gifts That Provide Income for Life
Many givers find themselves in a position of holding assets that would make beautiful gifts at some time in the future but are currently required to provide for present needs. By placing such property into a charitable remainder trust, a unique gift arrangement can be made that would provide income for a donor and/or a donor’s beneficiary. At the end of a specified period (such as the donor’s or the beneficiary’s lifetime, or a term of 20 years), the remainder of the trust assets would be given to the church.
Charitable remainder trusts are built with assets you contribute, such as securities, appreciated property, or cash. Once placed in trust, the assets can be sold (avoiding capital gains tax) and the proceeds reinvested to produce a higher yield for the donor and/or other beneficiaries. Such an arrangement creates an immediate income tax deduction (based on such factors as the beneficiary’s age and the amount of annual income). When you fund the trust with highly appreciated assets, there is no recognition of capital gains. The trust allows personal needs to be met, and it provides a wonderful gift for the church.