By Ron Altenburg, CPA, Tax Shareholder, Schenck SC
Why give to charity? In studies on the reasons people give, tax reduction regularly ranks low on the list while passion for the charity’s cause, a desire to give back, and helping make a difference are often at the top.
Although the low ranking of tax benefits might come as somewhat of a disappointment for a tax guy, it’s heartwarming to know genuine concern for others is of primary importance.
Some years ago, I was running out of time to do my year-end charitable gifts. While supporting the charity’s mission was my prime motivator to give, I must admit I felt compelled to do it in a tax-savvy way.
I reached out to the Community Foundation quite late in the year to set up a donor advised fund. The process was quick and easy and allowed me to donate an appreciated security that garnered me both a tax deduction and avoidance of capital gain taxes. The donor-advised fund also bought me time to make decisions about my grant requests.
Now with the recent federal tax law changes that raised the standard deduction, my donor-advised fund makes it easy for me to bunch my charitable deductions into itemizing years while still annually supporting causes I care about through periodic grant-making.
By having a donor advised fund with the Community Foundation, I know I’m supporting a local organization that helps me and other donors share and support our community. And I can do it in a tax-savvy way!