Accelerated Giving
Give during High Earning Years, Reduce Taxes, Enable Greater Giving
REDUCE TAXES DURING HIGH EARNING YEARS.
A high earner who is saving to give large amounts in the future can give more – much, much more – if he maximizes his charitable deduction by giving now. A giver can deduct more and receive more tax back from the government when he gives in a year when he earns more. He can deduct less and receive less tax back when he waits to give until a year when he earns less – such as a retirement year. And he can deduct zero and receive no tax back from the government when he waits to give until end of life.
GIVE MORE DURING AND AT END OF LIFE.
The greater tax savings the giver receives back from the government when he gives now, during high-earning years, plus earnings on those tax savings, are amounts he can give away – to church and Kingdom charities instead of the government.
Reduce Your Taxes
Effectively double the deduction and tax savings for the appreciation in the asset, whether it is your vacation home, your real estate development, your cryptocurrency, or your software company.
Advance God’s Kingdom
Convert an appreciated asset, and the tax you would pay upon liquidation, into Kingdom funding.
How It Works
Giver with the help of his wealth advisors and PCAF projects a large ending estate.
Giver decides how much of that ending estate to leave to his children and other heirs, and how much to church and charity.
Giver — again with assistance from his wealth advisors and PCAF — projects a “glide path” to just the portion of the ending estate he intends to leave to his heirs. The points of the glide path are the estate values at the ends of every year of life expectancy that lead to the desired ending estate.
Armed with these year-end estate values, the giver each year gives to his giving fund beyond his regular giving. He gives the lesser of (i) the amount that would reduce his year-end to, but not below, the glide path, and (ii) the maximum amount that would be deductible. In this way, the giver gives the most that would be deductible and induce a tax rebate from the government without reducing the amount he leaves to heirs.
Amounts the giver gives to his PCAF fund, and tax savings the government effectively puts back in the giver’s personal estate, are invested and grow.
Giver gives each year of his life to church and charity more than he had planned, and makes a much larger charitable bequest at end of life from both his PCAF fund and his estate.
Here’s what is happening: each year of high earnings the giver takes wealth from his right hand — his personal estate — and places it in his left hand — his PCAF giving fund; and the government rewards him for doing so by placing back into his personal estate 30% to 40% of what he puts in his giving fund. These government tax rebates to the personal estate are invested and grow, and the amounts given to the PCAF giving fund also are invested and grow — but tax-free. The increased giving enabled can be remarkable, even 100% or more.
Accelerated giving is a planned giving strategy of particular interest to executives who earn high compensation but may not own privately-held, highly-appreciated property for giving.
The Foundation has developed a rather sophisticated series of calculations that project over life expectancy an ending estate, and year-end estate values along a glide path to the ending estate desired to leave to heirs; and calculate giving each year that would reduce the estate to the glide path, and giving each year that would be deductible.
The Foundation has also recently facilitated:
- Donation of interest in technology S corporation, gift valued at more than $3M
- Donation of interest in online information and research LLC taxed as S corporation, gift valued at close to $1.5M
- Donation of real estate intended for residential development, gift valued at more than $1.5M
- Cryptocurrency gift valued at more than $50M
Our president served formally as general counsel to one of the country’s largest foundations, a leader in complex-asset giving, where he supervised the research, development, and implementation of all complex giving strategies.
If you’re interested in accelerated giving or have further questions, please contact our President, Tim Townsend.
Tim Townsend, President
Email
678-825-1050
additional complex services
We make a variety of donations possible.
Charitable
Remainder Trust
When you give to a PCAF Charitable Remainder Trust, you take a deduction for the gift now, the trust pays you (or beneficiaries you name) an income stream for life or a period of years, and the trust pays the remainder to your PCAF donor-advised fund for ultimate distribution to your favorite charities. Advantages include increased income that is more secure and diversified, deferral of capital gains tax on the sale of any funding asset, and an immediate accelerated charitable deduction for a future gift.
IRA Charitable Rollover
A Qualified Charitable Distribution is a rollover of part of an IRA, up to $100,000 per year (indexed for inflation in years following 2023), of an owner over age 70 1/2. The amount rolled over counts against any required minimum distribution, and is excluded from gross income in the equivalent of a charitable deduction, with the advantage over a deduction of not blocking the IRA owner from also claiming the standard deduction. QCDs may be made to PCAF Single Charity Funds.
Charitable Estate Planning
Our ministry includes helping you think about stewardship of your giving. You decide how much income and wealth to allocate to giving, and we help you plan how, when, and what to give during life and through the estate you leave in order to convert the most tax dollars to giving.