Philanthropic Gifts
Gifts of cash are deductible up to 60% of AGI. Your cash gifts to charitable organizations must be made by 12/31/24. Gifts of appreciated assets may be deductible up to 30% of AGI and can help avoid capital gain recognition. If you dont have an immediate charitable recipient in mind, or you want to bundle your giving into every other tax year, sometimes referred to as ‘bundling’ explore Donor Advised Funds below. It is best to consult your financial and tax professionals prior to making any gift with significant tax implications.

Donor Advised Funds (DAFs)
If you have a highly appreciated asset, one option is to contribute the asset to a DAF where you can avoid the capital gain and put 100% of the proceeds to charitable work over a period of one or more years. In subsequent years, you can claim the standard income tax deduction while augmenting your charitable giving by recommending grants from your DAF. Many community foundations and multiple for-profit investment companies offer DAFs with varying administrative costs, minimums, and abilities to name a successor grant recommender. These giving vehicles also present an opportunity to help successive generations of family and loved ones learn about giving effectively.

Retirement Assets and Converting to Roth IRAs
Are you thinking about converting tax deferred retirement plan assets to a Roth IRA? If so, the increase in your 2024 reportable income due to a conversion may be offset in part or in whole by gifts of cash to charity. Despite the Secure 2.0 age for RMD now at age 73, from age 70.5 onward, you may still give up to $105,000 per year directly to charity without recognizing it as taxable income.

Life Income Gifts
Life income gifts in the form of a Charitable Gift Annuity (CGA) offer the opportunity to both benefit charity and retain a stream of payments for you and/or a loved one for life. When funded with cash, a substantial portion of the payout is tax-free. CGA’s funded with appreciated securities, also offer a great opportunity to reduce an investment holding without immediate recognition of capital gains. CGA distributions can also be deferred if you do not need or want the income to begin immediately. Deferred CGAs lead to higher payments later, and can produce a bigger gift for the charity you wish to support.

Charitable Remainder Trusts provide an opportunity to receive variable income tied to market performance of the underlying assets. These trusts can be managed by an investment firm, trust company, or charity, and can provide for one or more charitable organizations, and one or more income beneficiaries. The recommended funding minimum to create a CRT ranges from $100k-$250k.

Caveats to Consider:

  • Consult your financial and tax advisors to evaluate whether these opportunities accomplish your objectives.
  • Giving appreciated securities may be more advantageous as you avoid capital gain tax and your gift is valued at the full fair market value.
  • For those age 70.5 or older, giving directly from your IRA to charities provides important resources to charities without increasing your AGI.

While you are at it, be sure to review who is listed as your successor beneficiary(ies) to be sure they are up to date and reflect your wishes.

Give through the United Way of the Greater Lehigh Valley

 

 

 

 

 

We’re thrilled to announce that The Bach Choir of Bethlehem is now a United Way Greater Lehigh Valley​ nonprofit partner! This partnership makes it easier than ever to support our mission. Bach Choir is now eligible to receive contributions through United Way, helping us bring the transformative power of music to our community. Thank you for considering us in your charitable giving!