Community Foundation donors recently received great news. On Dec. 18, 2015, Congress passed the PATH Act, making permanent the opportunity to give individual retirement account (IRA) assets to charity, free from federal tax.
Here is what is important for you to know:
- Individuals 70 1/2 years of age and older can transfer up to $100,000 of IRA assets directly to a charity without the money being included as income for tax purposes.
This preserves the full amount for charity, and allows donors to do this during their lifetimes, rather than waiting to give through estate plans.
- Some donors and their heirs will benefit from reallocating their estates with these gifts. When you give your IRA to charity, your heirs are not burdened by the taxes associated with receiving this asset upon your death. Instead, you can leave them other assets that have a more favorable tax treatment.
- The Community Foundation of the Lowcountry can help you to achieve your personal charitable goals as well as your financial goals. These IRA gifts can be added to an existing fund or used to start a new fund (of any type except donor advised) and can also be permanently endowed, providing a lasting legacy.
Just imagine: You can fund a scholarship, provide financial stability to several of your favorite nonprofits or support the entire community through the establishment of an unrestricted fund that can support critical needs.
Think about it: Americans have saved billions of pre-tax dollars in IRAs. Thanks to their continued savings and investment returns, an estimated $5.3 trillion is currently invested in IRAs.
Those who don’t need this saved asset can truly make a meaningful community difference – arts, education, environment, poverty, health – in these and other causes.
And if you need suggestions, we can provide those, too.
Community Foundation of the Lowcountry knows the community and its needs, and cares deeply about our local friends and neighbors.
A few examples of needs you might consider:
- Project SAFE Fund: provides funding for low-income residents to hook up to sewer on Hilton Head Island. Failed or failing septic systems are causing serious public health issues, environmental pollution, and loss of economic development opportunities.
We are in need of $3 million to solve this problem once and for all. Will you help?
- Public Art Fund: The amazing exhibition we bring to the area every other year, and the subsequent purchase, donation (to the Town of Hilton Head Island) and placement of large-scale pieces of art doesn’t happen by accident and requires financial support. You could help to keep this collection growing.
If an IRA gift could be of financial-tax benefit to you, I can assure you that it can be of charitable benefit to others as well.
And we can make the process simple.
In this case, even Uncle Sam did his part to make it easier for us all to live generously.
Denise K. Spencer is president and CEO of the Community Foundation of the Lowcountry. www.cf-lowcountry.org