Many kinds of personal assets can be converted into powerful contributions. Some examples are described here.
Every donor’s circumstances and goals are unique. Maine Community Foundation staff can work with you if you wish to help prospective donors evaluate their options. The information below is also available as a printable handout for your clients.
Contact Jennifer Southard, Vice President, Donor Services and Gift Planning, at (207) 761-2440 or firstname.lastname@example.org to discuss the most effective ways to accomplish your client’s goals.
The simplest gift is often cash, usually in the form of a check. We also accept gifts made by credit card online or by calling our Ellsworth office at 1-877-700-6800. Gifts of cash enable you to claim a current tax deduction of up to 50 percent of adjusted gross income, and contributions over that limit can be carried forward for up to five subsequent years. No minimum for gifts to existing funds. Gifts to create new funds must meet fund minimums.
Publicly Traded Securities and Mutual Fund Shares
Your client may be able to save on taxes when he or she contributes appreciated securities or mutual fund shares. Your client receive a double benefit of an immediate charitable deduction for the full fair market value of the donated assets and an exemption to any capital gains tax on the appreciation. The fair market value of contributed securities can be deducted up to 30 percent of your client's adjusted gross income. We offer a handout with detailed instructions for transferring securities to MaineCF. No minimum for gifts to existing funds. Gifts to create new funds must meet fund minimums.
Closely Held Stock
As an owner of a closely held or family business, your client may be considering a family foundation, but has discovered that there are restrictions that apply to private foundations and closely held business interests.
A partnership with the foundation is a cost-effective way to maximize your client's philanthropic options while minimizing his or her tax liability. We can help pass ownership of the company to children or key employees while not straining available assets and liquidity, and we can also help sell the company while minimizing estate taxes. On the family side, we can work with your client and other family members to create a family philanthropic program using the assets of your business. Suggested minimum proceeds or distributions of $200,000.
Limited Partnership Interests
We can accept limited partnership interests, such as investment or business partnerships. Individuals holding their families’ limited partnership interests may also consider contributing this type of asset. While donations of these and other more complicated assets require care, consideration, and planning, we do have the flexibility and expertise to accept them in most cases. Suggested minimum proceeds or distributions of $200,000.
Gifts of real estate may include a house, apartment building, farm, vacation home, commercial buildings and income-producing and non-income-producing land. Your client can make an outright gift of real property now or through his or her estate. A gift of real estate that your client has owned for more than a year entitles him or her to a tax deduction for the full fair market value of the property while allowing your client to avoid paying capital gains tax. Gifts of real estate typically require certain procedural steps, including a site visit to the property, a qualified appraisal, a preliminary title report, and an environmental assessment. Suggested minimum proceeds of $200,000 ($100,000 if land only).
Your client can benefit today from the future gift of a home or vacation home. He or she can continue to live in the home for life and enjoy a current income tax deduction. The foundation will ultimately sell the property and use the proceeds to support the charitable purposes your client care about most. Suggested minimum remainder interest of $200,000.
Life Insurance Policies
Many people find that the protection offered by life insurance policies no longer is needed later in life and use it as a tool for charitable giving. The procedure is simple--your client starts by irrevocably assigning his or her insurance policy to the foundation and naming us as the beneficiary of the policy as well. Your client can make annual tax-deductible contributions to cover the policy’s annual premium. If the policy is paid up, he or she will receive an immediate tax deduction in an amount equal to the policy’s cash surrender value. Suggested minimum face value of $10,000.
Retirement Plan Assets
For a growing number of Americans, an Individual Retirement Account (IRA) may be the largest single asset--a nest egg to leave behind for the children’s future. However, your client may not realize the massive tax bite the plan is subject to once it is passed on to his or her heirs. Naming the foundation as the beneficiary of an IRA will waive both estate and income taxes and create a permanent legacy in your client's honor. No minimum for gifts to existing funds. Gifts to create new funds must meet fund minimums.
Your client can use gifts of valuable items such as artwork, jewelry or antiques to create charitable legacies. However, to obtain a full, fair-market-value deduction for your gift of personal property, the items your client give us must relate to our overall charitable purpose and functions. A gift of unrelated property, or a gift that your client instructs us to liquidate immediately for cash, will return a deduction for just his or her cost basis in the assets. We will work with you and your clients on this point as they consider a personal property gift. Suggested minimum proceeds of $100,000.
Assets of a Private Foundation
Family or other private foundations have many transitions during their lifetime, especially when leadership moves from one generation to the next. If the new trustees want to focus on making grants and would prefer to leave the administrative, investment and regulatory functions to another entity, in many cases it is possible to terminate the private foundation and move the assets to the foundation. The trustees could retain their ability to direct grants to their areas of interests and foundation staff would handle the other functions. Minimum of $25,000 for a donor-advised fund or $2,000,000 for a supporting organization.