If you’re like many of the generous givers we serve, the pandemic may have changed life in ways that you never anticipated … for better or worse. At home, at work, and at church, you probably have been forced to pivot how you do certain things. But have you considered that it might be time to pivot how you give as well?
For example, if you have been writing checks to charity, you could be missing out on some of the greatest opportunities you have to make a significant impact with your generosity, especially now when it’s needed most.
By shifting your giving from your checkbook to your balance sheet, you may be able to save taxes, improve cash flow, and give much more that you ever imagined. So, what can you give instead of cash? Here are five things you may want to consider:
- A portion of your business while you still own it – One smart strategy is gifting a percentage interest in your business to a Giving Fund at NCF. For instance, if you give a 10 percent non-voting interest in your company, 10 percent of the company’s profits and distributions can automatically flow to your Giving Fund. Then, you can recommend grants from your Fund to your favorite charities. This strategy often provides several tax benefits, including a large, up-front charitable deduction for the fair market value of the gifted interest and reduced taxes on the ongoing profits and ultimate sale of the business. Learn more about our charitable shareholder strategy.
- A portion of your business before you sell it – Many entrepreneurs sell their business and then give, missing out on the double benefit derived from gifting pre-tax dollars. If you plan well in advance, your charitable options include not only gifting a full or percentage interest in the business outright to your Giving Fund, but also gifting the asset to a split-interest arrangement such as a charitable remainder trust or charitable gift annuity. These arrangements can pay you income in retirement. Learn more about planning for the sale of your business.
- Real estate – By gifting income-producing real estate, you may enjoy a fair-market-value deduction and frequently avoid the capital gains tax. Essentially, you are giving pre-tax dollars and still getting the charitable deduction – a double benefit. This is an especially valuable strategy for lowering capital gains tax consequences for those who frequently buy and sell real estate. Learn more about giving real estate.
- Life insurance – When gifting a life insurance policy to your Giving Fund, you can provide the charities of your choice with a significant sum of money and create a lasting legacy. You may designate your Giving Fund as the beneficiary of your policy or you may make a gift of the policy itself. After your lifetime, the benefits from your policy pass to your Giving Fund free of federal estate tax.
- Oil, gas, or mineral rights – If you own oil, gas, or mineral interests, these assets could be a valuable source of income-producing gifts that allow you to continue giving to charity both now and after death — all while enjoying significantly lower taxes. You can make NCF a partial owner so that the income stream flows directly to your Giving Fund, thereby lowering your taxes, both now and in the event of a future sale.
If you want to go the distance in your journey of generosity, cash giving can only take you so far. Your NCF team can help make your resources go further by uncovering opportunities to save taxes, give more, and leverage all your assets for God’s purposes.