As parents, we’re often interested in supporting those organizations that support our children with special needs. Here are some discussion points to make better and more informed plans in your giving strategies.
Give today and give cash: As long as the charity is on the IRS Publication 78, the Cumulative List of Organizations, which is an annual list of those charities eligible for deductibility, you can take a deduction for your gift.
A gift of your Life Insurance: If you change the owner of your policy and the beneficiary to the charity you are able to deduct the premium payments and the contribution of the policy itself will be deductible. There are some exclusions so make sure get appropriate professional assistance with making this gift.
Gifting of homes, real estate, rentals, etc.: You can always leave real property to your charity of choice and receive the full deduction. We have had several families who have structured a gift where their child with special needs has lived in the home during their lifetime and the home was then gifted after their child has passed. This ensured a stable living arrangement for the child and also provided much needed revenue for the charity after the child no longer needed the home. It was a win-win for everyone.
CRUTS, CRATS, Charitable Gift Annuities: These are more complex ways in which you can make a present gift and receive income during you or your familyâ€™s lifetime. The tax benefits vary with age, duration of payment, type of funding etc. However, if you are looking to increase your current income and wanted to make a gift at the end of life to a charity these can be wonderful tools, in which you receive some great tax benefits and the charity of choice receives in effect the left over amount at your death or after a fixed period of time.
Donor advised funds and foundations: These are great ways for you to manage your assets, leave a legacy of giving and help the next generation learn about giving back. The amount you are thinking of gifting will determine which is more appropriate.
Pooled income fund: You put funds into a pool that operates like a mutual fund but is controlled by a charity. You get a share of the actual net income generated by the entire fund for life, after which your share of the assets is removed from the pooled fund and distributed to the charity. You get an immediate income tax deduction when you contribute the funds to the pool. The deduction is based on the value of the remainder interest you had in the fund.
The first thing you must decide is if you are willing to give now, later or both. Then look at what you want to accomplish. Determine if you want to help with endowment funding, start a scholarship, send a child to camp every year, buy technology or contribute to the general fund of the charity. Having a clear idea of what you want to accomplish is critical to your feeling secure and pleased with your gifting plan. Many of us give with out a plan or any real direction and can miss out on better deductions and possibly making a greater impact for the charities which we support.