5 Things Smart Givers Know

Only a small percentage of today’s Christian givers use tax-efficient techniques for giving more wisely. Most Christians are unaware that they could be giving substantially more to fund the work of the charities they are passionate about.

What about you? If you’d like to make sure you’re aware of the valuable tools and strategies that smart givers are using to make a greater impact, here are our top five ideas:

1. Use a Giving Fund (donor-advised fund)

A Giving Fund at the National Christian Foundation (NCF) is a donor-advised fund, an efficient, flexible account for charitable giving that is growing increasingly popular. You can give your money and likely qualify for a tax deduction when you do. Then, you can recommend grants from your Giving Fund to your favorite charities. Until you recommend those grants, the Giving Fund can be invested and grow tax-free. You can review your fund, research charities, and plan your giving on your computer, tablet, or mobile anytime. Open a Giving Fund, or learn more in this two-minute video.

2. Write fewer checks

While NCF accepts cash and checks, it’s usually the least efficient way to fund your giving. It’s surprising but true. Gifts of cash are after-tax contributions. But by gifting appreciated assets – like securities, business interests, and real estate – you may be able to significantly increase your charitable giving while potentially enjoying a fair market value deduction. And we may not be required to pay capital gains tax upon its sale of the gifted asset, increasing the value of your gift. NCF is recognized as an industry leader in handling these types of gifts. Learn more about other forms of non-cash giving with NCF.

3. Plan ahead for liquidity events

Many people sell a business or property and then give, missing out on the double benefit derived from gifting what are essentially pre-tax dollars. Your charitable options include not only gifting a full or percentage interest in the asset outright, but also potentially gifting the asset to fund a charitable gift annuity. This arrangement can pay you income in retirement. Learn more about planning for the sale of your business or real estate property.

4. Gift of income-producing assets

Gifting a percentage interest in your business or income-producing real estate is a smart strategy. For instance, if you give a 10 percent interest in your company, 10 percent of the company’s distributions can flow to your Giving Fund. Then, you can use your fund to support your favorite charities. This strategy often provides tax-efficiency in the form of a charitable deduction for the fair market value of the gifted interest and potentially reduced taxes on the ongoing profits and ultimate sale of the business, so you have more to give. Learn more about how you can use your business to fund charity.

5. Give now, or give generously through your estate

Giving while you’re living can bring a lot of joy, but you also have the option to give to your Giving Fund through your estate plan – whether through your will, your trust, or even beneficiary designations. NCF has an experienced team of charitable giving professionals who can work with you and your advisors to help you leave a charitable legacy through testamentary gifts. Read more about how you can plan to support your favorite charity as part of your estate.