Charitable giving comes in many different forms

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Charitable giving can play an important role in estate planning. Philanthropy can provide personal satisfaction, an income tax deduction, help you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die. There are many ways to give to charity. You can make gifts during your lifetime or at your death. 

Making outright gifts
An outright gift benefits the charity immediately and exclusively. With an outright gift you get an immediate income and gift tax deduction.

Will or trust bequests and beneficiary designations
These gifts are made by including a provision in your will or trust document, or by using a beneficiary designation form. The charity receives the gift at your death, at which time your estate can take the income and estate tax deductions.

Charitable trusts
A charitable lead trust pays income to a charity for a certain period of years, and then the trust principal passes back to you or your heirs. This can be useful if you own assets you expect to substantially appreciate in value. A charitable lead trust allows you to keep an asset in the family and still enjoy some tax benefits. A charitable remainder trust is the mirror image of the charitable lead trust. This type of trust is desirable as it provides a stream of current income.

Community foundation
If you want your dollars to be spent on improving the quality of life in a particular community, consider giving to a community foundation. A community foundation accepts donations from many sources, and is overseen by individuals familiar with the community’s particular needs.

The Community Foundation of Greater Des Moines is a donor-driven public foundation whose purpose is to improve the quality of life in greater Des Moines through philanthropy.

The Community Foundation of Greater Des Moines currently manages assets in excess of $320 million, administers more than 1,270 charitable funds created by Iowans and distributed $21 million in grants in 2013.*

Endow Iowa
In 2003, our State Legislature established the Endow Iowa Tax Credit to give Iowan’s and Iowa businesses another incentive for giving back to their community, and to help build permanent endowments and community foundations throughout Iowa.

The Community Foundation of Greater Des Moines is a qualified community foundation that provides access to Endow Iowa Tax Credits.

Donor impact
Endow Iowa allows taxpayers to receive a 25% Iowa tax credit in addition to normal federal charitable income tax deductions for certain charitable gifts.

Donor-advised fund
A donor-advised fund offers an easier way to make a significant gift to charity over a long period of time. It’s an account held within a charitable organization. The organization is a separate legal entity, but your account is not — it is merely a component of the organization that holds the account. Once you transfer assets to the account, the organization becomes the legal owner of them and has ultimate control. You can only advise—not direct — the organization on how your contributions will be distributed to other charities.

*Source: http://www.desmoinesfoundation.org/quick-facts.aspx

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

 

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