In our new monthly column from Karen Minogue, Waccamaw Wisdom, we’ll unpack the latest in philanthropy and offer tips to make your giving more effective. Topic suggestions welcome at email@example.com.
Some recent news from Washington is good news for us philanthropists. On December 18, 2015, Congress and the President acted and signed into law a permanent extension of the IRA Charitable Rollover provision. For those not familiar with this provision – it allows donors who are 70 ½ or older to make direct gifts, up to $100,000, from their Individual Retirement Accounts (IRA) to a charity and have the donation count against their annual Required Minimum Distribution. This is a popular charitable tax planning technique that has been renewed year after year. Now that it is permanent, it will make planning your charitable giving that much simpler.
Because Waccamaw Community Foundation is a public charity, you can take advantage of this new provision by setting up or donating to an existing fund. Eligible funds include designated funds, field-of-interest funds, scholarship funds and unrestricted funds. Although donor-advised funds are not eligible for the IRA Charitable Rollover at this time, that is the next frontier, and our friends at the Council on Foundations are working hard on this next philanthropic policy change.
While gifts made through the IRA Charitable Rollover don’t qualify for your standard charitable tax deduction, the IRA distribution also will not count as taxable income, so there are still tax benefits to charitable giving in this situation! If you have any questions, we recommend reaching out to your tax advisor – or ask us if you need a referral to one.
This news is good enough for us, but another notable policy change happened in philanthropy in December: the IRS withdrew its controversial plan to require nonprofits to report the Social Security Numbers of donors who give $250 or more in any given year. The proposed law would have created a voluntary system for nonprofits to collect and send this personal donor information to the IRS in an effort to simplify the tax process for donors and nonprofits alike.
However, lawmakers and nonprofit organizations pushed back, and warned that even a voluntary program could scare off donors who do not want to give out their Social Security Numbers, decreasing charitable revenues. Additionally, they pointed out that this would likely require significant security upgrades for organizations already straining for resources to support operations and programming.
All in all, this is double good news from our lawmakers.