Tax planning has become an integral part of most everyone’s giving strategies, and today more than ever, options are being weighed to address many of the challenges presented in the Tax Cuts and Jobs Act passed at the end of 2017.

Impact of the Tax Cuts and Jobs Act

There have been expected and unexpected trends that have emerged as a result of the Act. One of the most perplexing for the nonprofit community revolves around the increase in the standard deduction.The increase has served to discourage some donors from itemizing their philanthropic contributions, which in effect has negated some previous attractive tax deductions.

The year-end opportunity for a tax deduction that accompanied a last minute contribution has all but disappeared in most cases. So what can nonprofits offer their individual donors to encourage their continued financial support?

There are a few interesting alternatives available

To consistently generate revenue for their nonprofit organizations, many leaders are suggesting that supporters consider these options:

  • Bundling of gifts into one year
  • Establishing a donor advised fund
    • Make a donation of highly appreciated stock into the fund in one year and ensure distribution at your direction
  • Opting for planned giving
    • Establish a charitable gift annuity or charitable remainder trust
  • Naming the organization as one of the beneficiaries on a life insurance policy
  • Directing a Required Minimum Distributions (RDMs) directly to the nonprofit organization from the IRA to avoid having the amount included as taxable income

These are just some of the tax strategies that are available to donors. If you would like to discuss these ideas in more detail, please give Mary Ford a call at 973-994-9494.