It’s Not Too Late to Make a Difference with a Year-End Charitable Gift

Joe Tackett, Assistant Vice President, Trust Officer

During this time of year, Christians from all over the world join together to participate in the observance of Advent. Recognized as the beginning of the liturgical year, Advent is a time of expectancy and preparation as individuals and congregations alike take time to pause and reflect as the Christian year begins.

Within the church setting, this commemoration is often marked by the lighting of candles. In this tradition, during the four Sundays of Advent, a candle is lit each week to acknowledge the ideals of hope, peace, joy and love. These thematic candles illuminate the heart and mind as we prepare for the birth of our savior, Jesus Christ:

“For God so loved the world that he gave his only Son, that whoever believes in him should not perish but have eternal life.” – John 3:16

The birth of Jesus Christ often inspires generosity within us all as we remember the greatest gift the world has ever received. Thus, in addition to the aforementioned tenets, Advent is often a season of generous expression. These expressions can occur in multiple forms as Christians seek ways to be a blessing to others.

Gifts of Cash

For many years, the Presbyterian Foundation and New Covenant Trust Company have helped generous individuals complete various types of year-end gifts to their favorite local church or charity, or one of the many national and international ministries of the PCUSA.

The most common and easiest gift to give is cash or a check. For 2021, cash gifts can be useful for both those who use standard deductions on their income tax return or those who choose to itemize. Standard deduction users are once again allowed an “off the top” universal deduction up to $300 for cash gifts given directly to public charities.

This year, however, Married Filing Jointly taxpayers may now each claim this benefit for a total of up to $600. (In 2020, they were limited to a total of $300.) For taxpayers who itemize, it is important to note that cash gifts continue the Increased Individual limit of up to 100% of Adjusted Gross Income (AGI) that was introduced as a temporary measure last year with the CARES Act.

Stock, Mutual Funds and IRAs

With the S&P 500 up nearly 24% year to date, donating appreciated securities directly to a charity may be an excellent choice for year-end gifts. One of the primary benefits of donating appreciated stock or mutual funds that have been in your portfolio for more than one year is you can avoid capital gains tax.

Another benefit of donating appreciated stock is that it can allow you to correct imbalances in your investment portfolio, such as asset allocation or concentration issues. Unlike gifts of cash, charitable deductions for gifts of appreciated securities are subject to a lower limit of 30% of AGI in any given year.

This year has also seen the return of Required Minimum Distributions (RMDs) from IRA accounts after their brief hiatus last year in response to the pandemic. For IRA account owners subject to RMDs, requesting a Qualified Charitable Distribution (QCD) can be an excellent way to both satisfy the RMD and make a year-end gift.

The IRS defines a QCD as an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. In other words, a QCD occurs when IRA owners who are at least 70 ½ direct their IRA provider to send a check drawn from the IRA directly to a charity of their choosing. This remains an excellent and relatively easy way to support your church or favorite charity.

Start Now to Initiate Your Gift

It isn’t too late to make a year-end gift, but donors should put the pieces in motion as soon as possible. Unlike writing a check, the transfer of securities and QCDs can take time to process. Therefore, we recommend donors start the gifting process by December 17.

New Covenant Trust Company and the Presbyterian Foundation are here to assist our clients and donors in achieving their year-end goals. For more information, NCTC clients may call Joe Tackett at 502-569-5957. To reach Stephen Keizer, Vice President for Ministry Relations at the Foundation, you may call 800-858-6127, option 2.

From everyone at the New Covenant Trust Company and Presbyterian Foundation, we wish you all a wonderous and joyful Christmas season as we celebrate the birth of our Lord and Savior, Jesus Christ. We sincerely thank you all for allowing us to be a partner in your mission and ministries over the past year and look forward to continuing to be of service to you for many years to come.

Foundation Ministry Relations Officer, Olanda Carr, contributed to this article. The Presbyterian Foundation and New Covenant Trust Company do not render legal, tax or accounting advice. The general information presented herein may not be current, and is subject to change without notice and is prepared for information purposes only. As with any decision regarding legal, tax and financial matters, we recommend you consult with your own independent professional advisor.