Hanging in there: Charitable giving in a challenging economy

At the moment, economic conditions feel, well, awful. But for those clients who are charitably inclined, challenging economic times might serve as an inspiration to become more intentional about charitable giving priorities.

Here are three messages worth sharing with your clients considering charitable giving as bear market conditions hang on:

1. "Not all stocks are down.”

Giving appreciated stock to a donor-advised fund or other type of fund at NCCF is always a tax-savvy alternative to giving cash, regardless of the economic situation. Your clients may feel disappointed that their portfolios have hit a rough patch, but this does not mean that there aren’t still plenty of opportunities to avoid capital gains tax on stocks held for more than a year.

2. “Consider the needs of others who are even more acutely feeling the pinch of inflation.”

Community needs are rising, and NCCF is dedicated to staying on top of the issues that are critically important to quality of life at any given time. Families with low or moderate household incomes can be especially vulnerable to high inflation, leading to an increase need and support by the nonprofits in their communities. The NCCF team compiles local information into an annual community needs assessment for the local areas we serve and we can provide that to our fundholders.

Tip: The NCCF team helps our fundholders understand community needs and issues and identify nonprofits serving the people who need the most help right now. Contact us to find out how we can help your clients make informed, impactful grantmaking decisions.

3. “Don’t forget about the Qualified Charitable Distribution.”

We mention this tool a lot because it is such a financially-savvy way for your clients to support the charities they care about. If your client has reached the age of 70 1/2, the client may be eligible to make annual distributions of up to $100,000 per spouse from IRAs directly to any non-donor advised fund at NCCF, such as a scholarship, designated fund, or community grantmaking fund of one of our local affiliates.

QCD transfers count toward satisfying clients’ Required Minimum Distributions and avoid the income tax on those funds. Plus, those assets are no longer part of a client’s estate at death, which avoids estate taxes, too.

Tip: Your client could make a qualified charitable distribution to start or add to a fund that provides annual support to their favorite charitable organization, alma mater, or religious institution. “Designated funds” require a minimum initial gift of $25,000 and can receive additional contributions at any time through an IRA, making them an excellent planning vehicle.