P.O. Box 987
Valley Forge, PA 19482
(267) 249-5762
Non-Profit Corporation.
 THE
MANY BENEFITS OF CHARITABLE GIVINGBy Richard Hand Giving to charity does not just benefit the recipient; there are benefits to the donor as well. To begin with, you feel the satisfaction of knowing that your donation will help support the mission of the charitable organization. Whether it is a Goliath, like the American Red Cross, or a David sized group, like your local synagogue, your donations really do make a difference. In addition to the warm feeling you get from helping others, there are also income and estate tax benefits for the donor and/or the donor's estate. For example, there is an income tax deduction allowed for property transferred to a charitable organization up to a certain limit. Anything over this limit can be carried forward for 5 years. These limits differ for public vs. private charities as to the amount of the income tax deduction allowed. Further, the property is completely removed from the donor's estate without incurring any gift tax or using any of the unified credit. This can be a powerful planning tool for large estates which may be subject to federal estate taxes. There are several different ways to make donations to charitable groups. Some more common methods of charitable giving include writing a check, including a charity in your will, or naming a charity as the beneficiary of a life insurance policy or retirement account. More advanced methods include, but are not limited to, Charitable Remainder Trusts (CRT) and Charitable Lead Trusts (CLT). In simple terms, both CRT and CLT strategies involve transferring appreciated property (stocks, real estate, etc.) from the donor to the charitable trust. Both of these methods have substantial income and/or estate tax savings features. In both cases, the annual payments can be either fixed or variable in nature. With a Charitable Remainder Trust, there are several options available to the donor, which offer a lifetime income stream. CRT's pay the donor(s) an annual amount for a certain number of years, usually 20, or the rest of their life or lives. When that period has passed, the charity receives the balance of the trust assets. Charitable Lead Trusts pay a charity an annual amount for a set number of years, usually 20 or more, and then the balance of the assets in the trust is paid out to the donor's heirs. So, if you are considering making a donation to a charity, make sure you explore all of the options available. Remember, 100 years from now nobody will remember what kind of car you drove, or what type of house you lived in, but they will remember you when their organization is able to do greater good because of your philanthropic spirit.
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