When your client is getting ready to make a contribution to a fund at the NoCo Foundation or to another charitable organization, remind them not to automatically reach for the checkbook! There are many other (and typically more tax-savvy) options to consider.

Marketable Securities

Gifts of long-term appreciated stock to a donor advised or other type of fund at the NoCo Foundation is always one of the most tax-savvy ways to support favorite charitable causes because capital gains tax can be avoided. Gifts of publicly traded stock, for example, are easy to transfer to a fund. The Foundation team can provide you and your clients with transfer instructions to make the process simple.

As with a cash gift, the NoCo Foundation will provide a receipt for tax purposes, and the gift of stock will be valued at the shares’ fair market value on the date of transfer. When the Foundation sells the shares, the proceeds flow into the client’s fund without any reduction for capital gains taxes. This is because the NoCo Foundation is a 501(c)(3) charitable organization and therefore does not pay income tax. That would not have been the case, however, if the client had sold the stock first and then transferred the proceeds to a fund at the Foundation; the client would owe capital gains tax on the sale. Especially in cases where the client has held the stock a long time and it’s significantly increased in value, the capital gains hit can be major.

Closely-Held Business Interests

The NoCo Foundation team is happy to work with you and your client to explore how the client might give shares of a closely-held business to a fund at the NoCo Foundation to benefit any eligible nonprofit of their choice. Not only will transfers be eligible for a charitable deduction during the year of transfer (and at fair market value if the shares are held for more than one year), but also these gifts could potentially reduce income tax burdens triggered upon a future sale of the business. Be sure to talk with our team well before any potential sale is in the works; otherwise, your clients might lose out on tax benefits. Gifts of closely-held business interests are powerful but can be tricky to administer.

QCDs from IRAs

As always, keep in mind the Qualified Charitable Distribution (“QCD”) is a financially smart way to support charitable causes. If your client is over the age of 70 ½, the client can direct up to $105,000 (in 2024) from an IRA to certain charities, including a field-of-interest, designated, unrestricted, or scholarship fund at the NoCo Foundation. If your client is subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs. That means your client avoids income tax on the funds distributed to charity. Our team can work with you and your client to go over the rules for QCDs and evaluate whether the QCD is a good fit.

Real Estate

Your client’s fund at the NoCo Foundation can receive a tax-deductible gift of real estate, such as farmland or commercial property, in a variety of ways. An outright gift is an option; lifetime gifts of real estate held by the client for more than one year are deductible for income tax purposes at 100% of the fair market value of the property on the date of the gift, which also avoids capital gains tax and reduces the value of your client’s taxable estate. Other ways to give real estate include a bargain sale or a transfer to a charitable remainder trust, providing lifetime income for the client and the client’s family.

Life Insurance

Don’t overlook life insurance as an effective charitable giving tool, whether by naming a client’s fund at the Foundation as a beneficiary or, in the case of whole life policies, naming the fund as beneficiary and transferring the policy itself. If your client transfers a policy, the client may be able to make annual, tax-deductible contributions to the Foundation to cover the premiums.

Other “Alternative” Assets

The NoCo Foundation is happy to work with you and your clients to explore options for giving other non-cash assets to funds at the Foundation, including:

  • Oil and gas interests
  • Cryptocurrency
  • Artwork
  • Collectibles

We look forward to working with you to explore your options!