Planned Giving is one way to focus your long term charitable giving on the causes that mean the most to you.
The Aiken Land Conservancy is grateful to all our supporters who so generously make annual donations in support of our mission. Annual giving, however, only partially funds our operations. Without the income from an endowment established in 2019 through the generous bequest of a donor, we could not sustain our level of activity. It is only through such planned giving that we can ensure our long-term ability to protect the natural and historic treasures that abound in Aiken.
When ALC was informed that we were the beneficiaries of a substantial unrestricted gift from the Herbruck estates, we moved to establish an Endowment Fund. The principal of the fund will remain largely untouched while the investment earnings will supplement annual gifts we receive. This ongoing cash flow has allowed us to set up an office and hire personnel. Another generous bequest from beloved board member Holly Houghton enabled us to establish a fund (together with some prior smaller bequests) that has given the ALC financial resources to pay for certain upfront costs for conservation easements that might otherwise be foregone because of the donor's own finances.
In both of these situations, individuals who believed in our mission chose to support ALC through long-term financial planning; in both cases, charitable gifts from their estates were designated for the ALC. Planned giving is something that can become part of your own personal financial planning. Your gift may be unrestricted or it may be designated for a particular purpose that is important to you, such as the Trees Project, maintenance of Winthrop Field, or funding land acquisition.
Annual gifts, if made with appreciated assets such as stock, are tax advantaged. Low-basis stock may be donated to ALC and the current value of the low-basis stock will be recognized as a charitable gift, BUT the capital appreciation of the stock will not be subject to capital gains tax to the donor or the ALC.
In addition to your annual gifts, there are several other financial techniques that can both ensure that your own charitable priorities are recognized and that may also provide certain tax advantages to you over the long term.
One form of planned giving is through a bequest in your will or trust that is set up during your lifetime as part of your estate planning. You may also name the ALC as a beneficiary of assets such as life insurance or bank and investment accounts which may pass independently of a will. Such gifts may be unrestricted or you may designate specifically how you would like your gift to be used. And you can modify your gift at any time. Currently there is no limit on the estate tax deduction for charitable bequests.
Your IRA, 401(k) or other retirement plan is another excellent vehicle for making Tax Advantaged planned gifts. As of 2022, after age 72, you are required to take an annual Required Minimum Distribution (RMD) from your IRA. A Qualified Charitable Donation (QCD) from your IRA can satisfy your RMD.
- Generally, distributions from your IRA are treated as taxable income. A QCD is not included in your adjusted gross income.
- A QCD is not eligible for a federal income-tax charitable deduction, and therefore is not subject to the percentage limitations on charitable deductions.
- If you do not itemize deductions on your federal income-tax return, donating to ALC via the QCD provides a tax benefit similar to claiming a charitable contribution deduction.
- The QCD is not reported as income, therefore will not impact Social Security benefits or Medicare Part B premiums.
Yet another vehicle for planned giving is the Charitable Remainder Unitrust (CRUT). A CRUT can be structured to provide an income stream until termination of the CRUT, at which time the remainder passes to the ALC. A CRUT funded with appreciated assets avoids immediate capital gains tax and provides an immediate income tax deduction for a portion of your contribution.
PLEASE TALK WITH YOUR FINANCIAL AND/OR TAX ADVISOR BEFORE MAKING A GIFT TO AIKEN LAND CONSERVANCY.