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Okoboji Foundation Professional Advisors Forum 10.14.14


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Okoboji Foundation presentation 10/14/14

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Okoboji Foundation Professional Advisors Forum 10.14.14

  1. 1. Live…Give…Better Together. Community Foundation of Greater Des Moines Wade A. Den Hartog, Director of Affiliates & Charitable Partners Joe Sorenson, Manager of Affiliate Relations
  2. 2. Presentation Outline  Endow Iowa and IRA Rollover Updates  Fund Illustrations  Gift Illustrations  Keep Iowa Growing
  3. 3. Endow Iowa and IRA Rollover
  4. 4. Endow Iowa An Incredible Incentive for Donors  Must be held at a qualified community foundation  Iowa charitable causes  No more than 5% annual spending/granting policy
  5. 5. Endow Iowa Then donors can be eligible for • 25% tax credit for contribution – in addition to federal deduction (can carry forward for up to 5 years) • Limit each year, per taxpayer and also statewide  $300,000 per taxpayer • Tax credit paperwork submitted; awarded on a first come-first served basis As of 10/8/2014, $2,744,370 Endow Iowa tax credits remain
  6. 6. Endow Iowa With Endow Iowa, donations to Community Foundation endowments cost donors less. $10,000 Less tax benefits: Net federal tax savings -3,960 Endow Iowa Tax Credit -2,500 Net Cost of Gift $3,540 Note: Use appreciated assets subject to capital gains and the savings are even better! Disclaimer: Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. The Community Foundation does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation.
  7. 7. Charitable IRA Rollover It MIGHT be back?! • For Individuals 701/2 and older • Can transfer up to $100K of IRA assets directly to charity • No charitable deduction but the money is not realized as income for tax purposes • Iowa Taxpayers can qualify for Endow Iowa tax credits!
  8. 8. Fund and Gift Illustrations 1. Donor Advised Fund 2. Legacy Fund
  9. 9. DONOR ADVISED FUNDS Donor Advised Fund
  10. 10. LEGACY FUNDS 1. Contribution made through planned gift (will /testamentary instrument) 2. Deduct assets from estate for purposes of estate tax 3. Administration (agreement easily modified) 4. Investment Legacy Fund 5. Favorite Charities (one or several) Family Foundation Fund Community Foundation’s Better Together Fund
  11. 11. The Johnsons A GIFT OF APPRECIATED SECURITIES • Ted and Marlene own 1,000 shares of stock • They originally paid $10 per share or $10,000 more than 11 years ago • The fair market value today is $37 per share or $37,000 • If they sell the stock, they’ll have $27,000 in long-term capital gain income • If they are in the 20% LTGC tax bracket, their bill equals $27,000x.20=$5,400 • Their net amount after selling the shares will be $31,600
  12. 12. The Johnsons CONTINUED • If they instead give the stock to charity, they bypass all $5,400 of capital gains tax • Plus, they can deduct the fair market value of their stock $37,000 (up to 30% of their adjusted gross income) • In addition they get 25% state tax credit • They have a 5-year carry forward, too
  13. 13. Keep Iowa Growing Iowa’s Farmland Giving Program …for the love of the land
  14. 14. Why? Farmland is by far Iowa’s most valuable asset:  Total number of farms 88,631  Total amount of farmland 30.6 million acres  Average farm size 345 acres  Average dollar value per acre $8,716  Aggregate value of Iowa farmland is estimated at $267 billion
  15. 15. Why?  The Community Foundation’s 30 affiliated county community foundations, together with Polk County, hold a combined 9.5 million acres of farmland.  If Keep Iowa Growing captured only 1% of this farmland, the value of assets held for charitable causes would be an estimated $866 million.
  16. 16. Why Now?  Less Debt. Iowa farmland without debt:  1982 – 62%  2012 – 78%  Average age of farmland owners  56% of Iowa farmland is owned by people over age 65  30% of Iowa farmland is owned by people over age 75  Compared to 12% in 1982  Lack of succession planning and estate planning
  17. 17. Why Now?  Protect Iowa’s Wealth  The projected transfer of wealth in Iowa through 2049 is $198 billion  Promote Charitable Giving  During one of the largest transfers of wealth in history, the Community Foundation must be proactive and innovative to provide options to channel this wealth to charitable causes.
  18. 18. Why the Community Foundation of Greater Des Moines? We are uniquely positioned to offer benefits not available from other charitable resources:  Maximum tax benefits  Endow Iowa tax credits  An affiliate relationship in 30 counties throughout Iowa  We are the “nonprofit’s nonprofit”  Expert staff and Board to manage & market the program  Offering donors flexibility and control in designing their legacy
  19. 19. How It Works Keep Iowa Growing provides a vehicle to keep land an Iowa asset, keep land functional as farmland and provide a lasting legacy to the community and Iowa.
  20. 20. Landowners Can…  Make a gift of farmland in which the revenue benefits the charity of their choice immediately. Be flexible in making a gift of farmland but retaining a life estate and an income stream for their lifetime. Suggest a tenant farmer. Establish a variety of fund types, such as a Donor Advised Fund, Family Foundation Fund, Designated Fund, Field of Interest Fund, Better Together Endowment, or their County Community Foundation Endowment.
  21. 21. What types of Gifts will be accepted through Keep Iowa Growing?  Outright gifts of farmland made during life  Bequests  Retained life interest  For term of years  For term of life donor  For term of life of donor and spouse (“last-to-die”)
  22. 22. Outright Gift Land stays in production
  23. 23. Retained Life Interest Upon death of donor Land stays in production
  24. 24. Questions?