As summer rapidly winds down, we’ve put together six tips to keep in mind as you plan your charitable giving for the coming months, years, and even decades. As always, the team at NCCF is happy to be a resource! 

If you can take advantage of the QCD, do it.  

A Qualified Charitable Distribution (QCD) is a smart way to support charitable causes. If you are over the age of 70 ½, you can direct up to $105,000 from your IRA to certain funds at NCCF, including a designated fund, scholarship fund or the community grantmaking fund of one of our affiliate foundations. You may not direct a QCD to a donor advised fund. If you’re subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs. Through a QCD, you avoid income tax on the funds distributed to charity. Our team can review the rules for QCDs with you and your advisors and help evaluate whether the QCD is a good fit for you.  

Review your IRA beneficiary designations.   

As you review your assets and how they are titled, perhaps in connection with an annual financial and estate plan review, pay close attention to tax-deferred retirement plans such as 401(k)s and IRAs. Typically, you’ll name your spouse as the primary beneficiary of these accounts to provide income following your death or to comply with legal requirements. But as you and your advisors evaluate whom to name as a secondary beneficiary of these accounts, consider your fund at NCCF instead of your children or revocable trust. Naming your fund at the community foundation may be the most tax-efficient and streamlined way to leave a philanthropic legacy and avoid not only estate tax, but also income tax on the retirement plan distributions.  

Donate appreciated stock to your fund at the community foundation. 

We understand how easy it is to write a check when you want to boost your fund. But if you can remember to pause before you pull out your pen, it may pay off!  When you donate shares of long-term appreciated stock, you can be eligible for a charitable tax deduction at the fair market value of the shares. Then, when NCCF sells the shares and adds the proceeds to your fund, the fund is not hit with capital gains tax. By contrast, if you were to sell those shares and give the proceeds to your fund, you’d be responsible for capital gains taxes and have less to give to your fund. Please reach out to the community foundation any time to learn more about how easy it is to take advantage of this tax-savvy giving technique. Review our stock transfer instructions.  

Plan ahead for your business exit. 

If you own all or part of a private business, keep in mind that charitable giving can factor into your eventual exit strategy. If the business has grown over time, your shares will likely have appreciated greatly, triggering capital gains tax upon a sale and reducing the proceeds you keep. No capital gains tax will apply, however, to the sale of the portion of the business owned by your donor-advised or other type of fund at NCCF. Plus, you can be eligible for a charitable income tax deduction in the year of the transfer based on the fair market value of the shares – not the cost basis, as would be the case if you’d transferred the shares to a private foundation. A strategy like this only works with careful planning, so be sure to contact our team well in advance of setting a plan in motion. We are happy to work with you and your advisors to help achieve your charitable and financial goals.  

Start paying attention now to the estate tax exemption sunset.   

The estate tax exemption – the total amount a taxpayer can leave to family and other individuals during their life and at death before the federal gift and estate tax kicks in –is scheduled to drop after Dec. 25, 2025. For 2024, the estate tax exemption is $13.61 million per individual, or $27.22 million per married couple. For 2026, without legislation to prevent it, the estate tax exemption is scheduled to fall back to 2017 levels, roughly $7 million per person adjusted for inflation. If Congress doesn’t act to change the sunset, more people – including you – could be subject to estate tax. In addition to allowing you to leave a legacy for the community, charitable giving can also help you avoid estate taxes. NCCF is ready to work with you and your advisors to discuss how charitable giving may be incorporated into your estate plan. 

 Embrace a holistic approach to philanthropy.  

When you work with NCCF, charitable giving is easy, flexible and rewarding. As the hub of your charitable giving, we offer a wide range of fund types, services, and ways for you and your family to get involved with the community you love. Many of our fundholders use a donor advised fund to organize annual giving to charities. We can also help you establish a designated or field of interest fund to complement the function of your donor advised fund. A designated fund allows you to support a specific charity over the long term, while a field of interest fund focuses your support on a particular area of community need by leveraging the expertise of NCCF or one of our affiliate foundations. We’d also be honored to work with you and your advisors to structure a bequest to NCCF in your estate plan to support important causes, as well as the community foundation’s work, beyond your lifetime. We are here to help you make the most of your philanthropic intentions, and it is an honor to work together.   

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.