Year-End Giving Opportunities and How OCF Can Help

As we approach the end of 2020, your clients’ thoughts may turn to year-end giving, especially as they reflect on the many unprecedented challenges Oregonians have faced this year.

They may be planning to contribute to their existing OCF fund, or one of OCF’s pooled funds, or they may be considering establishing their own fund. As you know, it is a very simple process to create an OCF fund to support causes your clients care about, whether it’s a donor advised fund, a fund that designates specific nonprofits for support, or a scholarship fund. They can establish a fund with simple assets, or more complex assets like real estate or business interests.

While funds can be quickly established, certain types of assets take longer to transfer to OCF, particularly at the end of the calendar year. For a transfer to qualify for a charitable tax deduction in 2020 it must be received by OCF by the IRS deadline of December 31. We thought it might be helpful to offer the deadlines below:

While we will make every effort to receive and process a gift by December 31, there are situations where this may not be possible due to factors beyond our control.

Our philanthropic advisors around the state would love to talk more with you and your charitably inclined clients. We offer many different types of funds, depending on what your clients would like to accomplish with their giving. Our investment program, administrative support, personal service and expertise in Oregon will ensure that your clients can experience the joy of impactful giving without worrying about details.

There are a few specific opportunities for giving in 2020. The CARES Act (“Coronavirus Aid, Relief and Economic Security Act) provided a $300 above-the-line charitable deduction, which will allow donors to qualify for a charitable deduction even if they aren’t able to itemize. (Note that the $300 limit is not per person, but per tax-filing unit.)

Also this year, donors can elect to suspend the limitation (based on adjusted gross income) on their charitable income tax deduction for cash gifts to public charities (although not to donor advised funds), which is typically limited to 60% of adjusted gross income. This would likely come into play with donors who have had a major wealth event in 2020, providing the means to make a sizeable donation to offset income. It also presents an IRA QCD opportunity. In 2019, if taxpayer with $200k AGI withdrew $1 million from an IRA and gave it to charity, they would have an AGI of $1.2 million and would be able to deduct $720k, retaining a taxable event for the remaining $280k of their IRA withdrawal. However, in 2020 a donor could deduct the entire $1 million if they elected to suspend the 60% limit.

We are all well familiar with the changes implemented by the Tax Cuts and Jobs Act of 2017. It doubled the standard deduction and reduced and limited itemized deductions. As a result, many taxpayers are not able to itemize, and so cannot take advantage of the tax benefit of making a charitable donation. However, bundling all charitable deductions for certain tax years has enabled many donors to itemize. Creating an OCF fund is a great way to accomplish this. Your clients can establish your own fund for their “bundled” donations and then spread out their giving to nonprofits over time.

Even with the new legislation, making qualified charitable distributions from an IRA account and making gifts of appreciated assets remain a compelling tax-wise way to give.

We are here to help talk with you and your clients about these giving options, and how OCF can support your clients’ charitable goals. When they give with OCF, they are connecting to a powerful network of generous Oregonians who share their vision for a better future. It’s an honor for OCF to partner with our donors to create lasting, measurable change.

Photo by Eric Rothermel on Unsplash