IRA

Planned Giving in 2017?

Image result for planned giving

I refuse to jump to any conclusions regarding this year in planned giving (or any year!).

Will Congress/President somehow waterdown or eliminate the charitable deduction?

Possibly but it’s possible that the charitable deduction will be more valuable to your donors than ever before if they limit other deductions but not the charitable one.  (Treasury Secretary Mnuchin already said there will be no tampering with the charitable deduction contrary to Trump’s campaign “tax plan”)

Will there be anything new and exciting for fundraisers to bring to donors?

This doesn’t look like a great year for creative charitable legislation. Let’s see if they really “fix” Obamacare or the tax code.

But, there are a few things I can guarantee will happen: the oldest baby-boomers start turning age 71 this year, the age when required minimum distributions (RMDs) from IRAs and other qualified retirement accounts start.  There are a lot more boomers than their predecessors, with a lot more IRA funds – IRA charitable rollovers and beneficiary designations should be high on every fundraiser’s wish list.

Bottom line: Planned Giving is turning a corner, Boomers are finally and officially Planned Giving Prospects. Maybe it’s time you and/or your organization realized that it is “now or never” for the Boomers? Train up the staff, invest in the Planned Giving program.

Oh, and check out our 3-part Planned Giving Boot Camp for Major Gift Officers! Next sessions start March 15, 2017 – click here to see how affordable it is to train up to 15 staff members in planned giving!

IRA Law Passes! Permanently!!

The IRA giving provision is on the books again!  Hooray!

Now what?

It is December 21st. Friday is Christmas (that rules out Thursday, too, and even this entire week for many).  New Year’s Eve is the following Thursday.  So, we have 6.5 business days, give or take, to do something this year about it.

Some of my colleagues have had a mailing ready to go that maybe, just maybe went in the mail today.  Problem with this strategy is that the mail is really slow this time of year – trust me, I am waiting for a check from a client 20 miles from my home that went out on Wednesday last week and I am still waiting!  Anyway, your donor needs to somehow get the IRA plan administrator to disburse the funds in 2015 to count for 2015 (no big deal if it misses).  No, in my mind, an attempt at a mailing doesn’t make sense.

What about an email blast?  Yes, go for it!  Big headline:  IRA Giving Provision Reinstated!  Big message:  Contact your IRA plan administrator about taking advantage of this year-end giving option for a tax-free gift from your IRA to ______ charity.  Bullet points:  If you are age 70 1/2 or older; You can gift up to $100,000 from  your IRA with no taxable income; Call us now for more information or contact your IRA plan administrator to find out how to take advantage of this law before December 31th.

Even better, get on the phone or personalized emails!  You should be calling anyone who not only had a recent interest in IRA giving, but anyone who ever used the provision in the past!  Talking points:  did you know that Congress just passed the law the allows you to make direct gifts to us from your IRA with no tax consequence?  If you haven’t taken your 2015 RMDs yet, an IRA rollover gift counts towards your RMD.

Beyond this year?  The law is now permanent!  Like I said – hooray!  Why am I so excited?  It just happens that the oldest baby-boomers (those born in 1946) will start turning 70.5 this year!  Oh, and did you know that for boomers, IRAs are the biggest asset class among their financial investments, by far?  Will share that data another time – just realize that IRAs for boomers are big and now boomers will start being eligible to make gifts from their IRA to cover their RMDs, for annual giving, for special or major gifts.

Don’t forget that a donor needs to have actually reached his/her 70.5 birthday before pulling the trigger on this.  The IRS, in their accountant’s way of viewing the world, actually count your half-birthday as the day you actually turn the next age.  Yep, if you are than 50% through the  year since your last birthday, you can start telling everyone that according to the IRS, you are already a year older’).

 

 

 

IRA Giving Getting Closer (and Possibly Permanent!)

ppp screen shot

Thank you PPP for your announcement  – click the picture to see it.  Yes, we are inching towards an IRA giving law again but this time it looks like it will be for good (i.e. no longer up for grabs each year).

This is great news.  Sure, you have almost no time to reach your donors this year – we will be lucky if we know for sure by Friday.  But, we can get a jump on next year and beyond, and maybe get a few gifts in by year’s end.

Why I am so encouraged is that the oldest baby boomers are just starting to turn 70 in 2016 and they are prime candidates for this giving option so the fact that the law should become permanent is great news.

My planned giving boot camp students asked what are the immediate next steps (AS SOON AS IT IS SIGNED INTO LAW)?

  • Call/email anyone you know who has used the IRA giving provision in the past!
  • Email blast away!  Time sensitive headline – act by December 31 to make your tax-free IRA gifts!
  • Even if these efforts are a little late, they will certainly help for next year and beyond.
  • Start planning a post card or newsletter or more email blast or ads in your publications – anything to catch people’s attention and open their eyes to this nifty new way of giving (if they are the right age, of course!)

 

IRA Rollovers Anytime Soon?

 

Tax extenders 2015

I have a Google alert that anytime “tax extenders” is in the news, I get an email.  As for IRA giving in 2015, there has really been nothing to report, except for today’s piece which gives me hope.

Here is the article headline from National Law Review today:

Lawmakers to Finish Highway Funding, Turn to Extenders; IRS Advisory Council to Discuss Operational Funding

posted on: Monday, November 16, 2015
– See more at: http://www.natlawreview.com/article/lawmakers-to-finish-highway-funding-turn-to-extenders-irs-advisory-council-to#sthash.cTWfbDxc.dpuf Here are the most relevant quotes:

“House and Senate lawmakers this week will be tasked with conferencing their versions of highway funding legislation…With regard to extenders, tax-writers will now be tasked with determining how to proceed, as Democrats and Republicans differ on their approach. While Republican tax-writers would prefer to make several of the business tax extenders permanent, Democrats have made clear that they will not support such an approach unless extensions of the business provisions are met with extensions of provisions benefiting the working class, including provisions such as the Earned Income Tax Credit. With only a month and a half before the end of the year, lawmakers face a December 31, 2015, deadline by which to reach agreement before being forced to reach back into 2015 next year, which is what occurred in January of this year.”

 

In others words, tax extenders are finally next in line for consideration.  Will something be done? Most certainly yes (too many lobbyists working on the 50+ extenders from too many interests not to get something done).  Will it get done with time for fundraisers to alert donors?  Probably not.

Remember last year’s debacle for fundraisers – we were given one week – that’s right – to alert donors.  No provision for using the law retroactively in January 2015 for 2014.  No switcheroos (swapping already taken late year RMD for IRA gift).

What’s the best approach?  Back to my last two posts.  It’s time to encourage donors – especially those only considering modest gifts from their IRAs – to have the check written directly to the charity and see what happens. Yes, confer with  your accountant (always good advice) but go ahead and make that IRA gift!

Nonprofits that have been pushing this advice have benefited greatly.  And, plenty have been doing it. And may the force be with you!