It’s the end of the year and that means Thanksgiving, Christmas and year-end giving. Most annual donations occur in December –one-third to be exact – and 12 percent in the last three days. Unfortunately, it’s also estimated that two-thirds of donors do no research before giving.
To make the most out of your giving this season, we asked The Catholic Foundation and Catholic Charities for some tips on how to donate smarter.
Giving through The Catholic Foundation
The Catholic Foundation of Northern Colorado was established in 1998 to help the faithful give to the Church in the best possible way, not only by cash, but also through other personal assets.
“The Catholic Foundation is the preferred ministry to receive planned gifts for the benefit of our parishes, schools and Catholic organizations,” said Jean Finegan, director of planned giving and development for The Catholic Foundation.
Most assets that Americans hold are investments, real estate, insurance policies and retirement plans. The Catholic Foundation safeguards all these types of gifts for the charitable purpose you desire.
As Finegan affirmed, planned giving allows us to leave a legacy of faith for the generations to come. It’s a final testament “of who we are, what we value and whom we love.”
Here are some ways you can donate smarter with the Foundation.
Donor Advised Fund Account
Starting your donor advised account with the Catholic Foundation will allow you to receive tax advantages and an immediate charitable tax deduction for each contribution. You can then recommend grants to your favorite charities.
“This is a beautiful way to involve family members in the benefits of faith-based philanthropy,” Finegan said.
With a donor advised account from the Foundation, you can benefit from a complimentary set-up, while eliminating capital gain taxes on gifts such as stocks, real estate and other assets.
Appreciated Stock
Giving through appreciated stock is one of the smartest ways to donate to Catholic parishes and ministries.
With the market at an all-time high, you can gift your stock directly to the Foundation, avoid the capital gain tax and receive a charitable tax deduction, Finegan explained.
This means that it’s better to donate your stock directly to charity than to sell it first and donate the proceeds. Doing so could increase your contribution and tax deduction substantially.
The Catholic Foundation will accept your appreciated stock and sell it for the benefit of the Catholic parish or organization you wish to support.
IRA Charitable Rollover
You can make your donation to the Church or charitable organization go further if you give directly from your Individual Retirement Account.
If you are 70 1/2 years old and have money in an IRA, it is mandated that you withdraw a required minimum distribution from your account each year, Finegan noted.
The charitable rollover allows you to give up to $100,000 from your IRA to the Foundation.
The distribution satisfies the required minimum distribution and is not added to your adjustable gross income. This may help in avoiding additional income tax on the distribution, Finegan said.
The Catholic Foundation will also assist you with an IRA charitable rollover donation.
Giving through Catholic Charities
Some Catholic Charities shelters and childcare centers qualify for tax credits, which will help make the most out of your donation.
“It’s a win-win because the donation goes further to help those in need and the donor has an after tax lower cost of donation even though they gave more,” said Wayne Wolberg, chief financial officer for Catholic Charities of Denver. “We have many donors contributing through [these opportunities].”
Enterprise Zone
Enterprise Zones exist to encourage a private involvement in economically distressed areas. The state of Colorado allows a 25 percent tax credit on state income taxes when a donation is made to qualifying homeless shelters, explained Wolberg.
Catholic eligible shelters include the Samaritan House in Denver, the Samaritan House Women’s Shelter in Denver, The Mission in Fort Collins and the Guadalupe Community Center in Greeley.
Consult your tax advisor for information on this tax credit option.
Childcare Tax Credit
The Childcare tax credit seeks to increase the quality and availability of child care in metro Denver. The state of Colorado allows a 50 percent tax credit on state income taxes when a donation is made to these ministries, Wolberg said.
The Catholic ministries that qualify for this credit are the Marisol Homes in Lakewood and Catholic Charities’ Early Childhood Education programs. See your tax advisor for more information.
Finegan encouraged all the faithful to contribute for the well-being of the Church and their own family: “Regardless of your age, circumstances or economic status, we encourage you to begin thinking about the legacy you wish to leave behind and the message you hope to share with your loved ones and your Catholic community.”