Creative Generosity Now
When you desire to increase your generosity, consider “the other 90%” – your non-cash assets.
Your Other 90%
Scientists tell us that only about 10% of an iceberg is visible above the water’s surface. The great mass – some 90% of the iceberg is below the surface and hidden from view. Similarly, the Christian steward’s assets (or estate) are often approximately 10% in cash (liquid assets) and the remaining 90% in non-cash, non-liquid assets.
For generous stewards, this can be highly frustrating. “I’d really like to give more – but I just don’t have any more cash money…” Regardless of income, nearly everyone reaches the point of – “I can’t give away any more cash.”
Are there options for the giver who has reached their personal “cash limit?” Yes! For many, “the other 90%” of their financial assets holds the key to giving to their heart’s desire.
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As a general rule – if an asset has an ascertainable value and is commonly bought and sold, it may be possible to use it to fulfill your generosity desires. However, some assets have complicated tax and ownership rules that make their use as a charitable gift less desirable or even prohibited.
Here is a partial list of non-cash assets that are commonly used to make generous charitable gifts.
Individual Retirement Accounts
Commonly referred to as an IRA
How to Give IRA's
Generally, if you are at least 70.5 years of age, IRAs can be excellent assets for making current gifts so long as you understand and follow the withdrawal and taxation rules carefully.
The qualified charitable distributionprovision in the Tax Code allows you to have your IRA custodian send a distribution directly to your chosen ministry rather than to you. Since you don’t receive the distribution, you will not have to claim it as income. Further, the distribution can count toward your RMD for the year of the distribution.
Example: Ralph and Marge are in their late 70s and want to give a generous gift to their favorite ministry for the current campaign. They are doing well living on their fixed income payments and find that they really do not need the income from the required minimum distributions (RMD) they must take from their IRAs this year. After learning of the qualified charitable distribution provision in the Tax Code – Ralph and Marge each instructed their IRA custodian to send a distribution equal to this year’s RMD directly to ministry to help with the campaign. While they will not receive a charitable tax deduction for the gift, they won’t have to claim the distribution as income – providing essentially the same tax benefit. Ralph and Marge are planning to use the qualified charitable distribution in coming years to increase their generosity. If they find they need the RMD (or more), they will simply not request the distribution to charity retaining the income for themselves.
Resources
We have prepared a helpful eBook, download your FREE copy today!
You can also watch this video Using Retirement Funds for Ministry, to learn more.