Addressing our Community’s Needs and Giving Under the New Tax Law
Same Giving. New Strategies.
There are still lots of opportunities to give with the new tax regulations, they just might be a little different than what you’re used to. Below are some ideas we think might be helpful to you.
Group Your Gifts
At the end of 2017, Congress passed an increase in the standard deduction to $24,000 per couple. If your other deductions are less than $24,000, then when you make a charitable gift you will only get an additional deduction when the amount of your charitable gift, added to your other deductions, exceeds $24,000. Most couples have less than $24,000 of deductions. Accordingly, they will be better off from a tax standpoint if they group their charitable giving into one year and make contributions to charity every few years rather than every year. Grouping 2-3 years’ of gifts in to one year could help your itemized deductions exceed the new standard deduction in that year, giving you the maximum tax advantage. Then in years 2 and 3, you use the standard deduction. This strategy may make your total deduction over that period of time greater than it would have been otherwise.
What does that look like for one happy couple that typically gives $15,000 to their favorite charities each year? Let’s assume that Happy Couple, in addition to what they give away, also has another $15,000 in deductions that they currently itemize. Here’s how “grouping” their annual charitable gifts might work to their benefit:
Happy Couple Scenario Under Proposed Tax Rules
Without “Grouping” Charitable Gifts
|Proposed Tax Rule Allows $24,000 in Standard Deduction||Itemizes and receives $30,000 deduction ($15,000 to charity; $15,000 in other deductions)|
|Total Deduction Over 3 Years Under Current Law||$90,000 ($30,000 per year x 3 years)|
“Grouping” Charitable Gifts
|Year 1||Couple “groups” three years of charitable giving ($15,000 per year x 3 years = $45,000) all at once and still has $15,000 in other deductions. Total deduction of $60,000|
|Year 2||Takes Standard $24,000 deduction|
|Year 3||Takes Standard $24,000 deduction|
Total Deduction Over 3 Years Under Proposed Law
You can add to or create a donor advised fund at CFSI to hold your grouped gift. Then, each year, you recommend a grant to your favorite charities, which keeps your annual contributions to them consistent. Or your grouped gift could permanently endow your favorite charitable organizations, so that your support for them continues long after your lifetime. You could also create a scholarship fund. Let us help you make the most out of the new tax law and your giving.
IRA Charitable Rollover
If you’re over 70 and a half, you can make a tax-free gift of up to $100,000 directly from your IRA to the Community Foundation of Southern Indiana. The gift could establish your own fund or support our Community Impact Fund, which we use to provide for the greatest needs in Clark and Floyd counties. Your rollover gift will even satisfy any IRA required minimum distributions for the year! If you have any questions about how we can help you with your giving please give me a call at (812) 948-4662.
Linda S. Speed, JD
President and CEO
Grant Impact Story
Commonwealth Theatre Center’s Live Touring Production of
Red Riding Hood for Floyd County
Commonwealth Theatre Center (CTC) recently received a generous grant of $4,800 from the Community Foundation of Southern Indiana’s Community Impact Fund to support the presentation of two school-based performances of CTC’s professionally produced and acted Red Riding Hood at Fairmont Elementary School and S. Ellen Jones Elementary School in November.
Funds also supported a public performance for families at the Ogle Center’s Robinson Theatre at Indiana University Southeast. The live musical production engaged a total of approximately 880 children, teachers and parents in Floyd County!
The Foundation’s Community Impact Fund is the unrestricted fund we used to address the needs of our community. According to our Assessment of Community Needs and Priorities, we can improve the quality of life in our region and foster creativity in our youth in a number of ways including: making the arts more accessible to our community; targeting youth for attendance at performances and tying those experiences to active, hands on opportunities.
This grant to CIC is helping address a community need. CTC engaged students with take-home activities to share with their families, and provided participating school sites with a CTC-created teacher resource guide. At the schools, CTC sent students home with nearly 600 family activity pages and “ask me about the performance” stickers, as well as distributed resource guides and “thank you letter” instructions to all of the school’s teachers. As you can see from the picture below, many of those thank you letters found their way back to the Community Foundation!
We’re proud to serve as this community’s partner, resource and steward in philanthropy. In addition to helping individuals, families and businesses give back in meaningful ways, we’re using our own Community Impact Fund to address the needs in Clark and Floyd counties, improving our quality of life and building community connections.
Grant and Scholarship Application Deadlines
Youth Philanthropy Council Grants – Due Tomorrow at Noon
Each year, the Youth Philanthropy Council, a program of the Community Foundation of Southern Indiana, accepts grant applications from nonprofits with programs and projects that benefit youth in Clark and Floyd counties.
Projects should meet one of the following objectives specific to youth: promote healthy development and a safe environment, provide opportunities to benefit the community, develop the skills of young people or develop positive relationships between youth and adults. While not required, there is a preference for organizations that involve youth in the planning and implementation of the program or project.
Scholarship Applications – Due January 31
High school seniors throughout Clark and Floyd counties can apply now to receive generous, well-earned scholarships through the Community Foundation of Southern Indiana.
The Foundation’s scholarship program consists of over 75 scholarship funds established by donors desiring to assist students in Southern Indiana. Because of the generosity of these donors, over 100 scholarships are awarded to area seniors – helping them pursue their education goals. While many of these awards are available through the local high schools and colleges, students may apply for specific scholarships directly through the Foundation’s website through January 31st.
Students interested in learning more are invited to visit the scholarship section of Foundation’s website at www.cfsouthernindiana.com.