Generosity is an important component of life. It can take many forms: sharing time, skills, possessions, business interests and property, as well as securities (stocks, bonds, mutual funds) and cash. You can give food to a food pantry, teach a class at a church, buy something at a charity auction, or write a check. These are simple. But other assets—items such as vehicles, jewelry, art, collectibles, shares of a business, or real estate, including farmland—can also be donated for their fair market value (FMV).
A vehicle that’s no longer needed can be donated for its FMV to a charity. The charity picks up your vehicle and you sign over the title. They provide a receipt documenting your gift for tax purposes. It’s usually your responsibility to assign a value to the donation when you take the deduction on your tax return.
Jewelry, art and other collectibles can be donated in much the same way. You may need to involve an intermediary if the charity doesn’t have the expertise to convert your valuables into cash. Your community foundation may be a great place to start.
Business interests and real estate, such as farmland, can also be donated. You can receive a deduction for up to 30% of Adjusted Gross Income (AGI) in the case of assets with long-term capital gains. For a retiring business owner or shareholder, there are potentially multiple benefits: lowered estate value, reduction or elimination of tax liability and enhancement of succession planning. Whatever you donate must first be appraised in order to establish FMV. These types of gifts require a carefully-thought-out plan and will likely need to be coordinated by professionals with the necessary expertise. Again, your community foundation may be a good place to start.
Giving of your time or expertise is always appreciated. Consider exploring charities that involve causes of interest to you. Schedule a time to visit, or sign up to volunteer when an opportunity arises. Consider a group activity involving your family, your work or interest group. When you find a charity that’s a good fit, ask how you can help.
If you are concerned about whether a charity is using funds wisely, Charity Navigator is a good information source. You can look into the details of many charities and keep a watch list of those to which you contribute or are considering for a gift. Other good tools are Guide Star and the Better Business Bureau’s Wise Giving Alliance. If you are interested in helping a smaller charity that is not on the radar of these larger reporting organizations, give them a call, indicate your interest and request the information that you need.
Regardless of what you give, don’t let the process itself deter you from the gift you wish to make. Establish your objective for giving and then explore your options in order to accomplish those objectives.
PLEASE NOTE LIMITATIONS: Please see Important Educational Disclosure Information and the limitations of any ranking/recognitions, at www.fostergrp.com\disclosures. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov.