For many Christians, charitable giving is an expression of God’s work in their hearts and a way to sustain ministries that advance God’s kingdom. After age 70 1⁄2, donors may have additional ways to give thoughtfully, particularly when they own appreciated investments, non-cash property, or a traditional IRA.
The right approach depends on the asset, the ministry a donor hopes to support, and the donor’s personal tax circumstances. The PCA Foundation offers vehicles that can help direct more resources toward Kingdom ministry.
Give Appreciated Securities Before a Sale
Donors who own publicly traded stock, bonds, or mutual funds that have increased in value may consider giving those assets before selling them. Instead of selling an investment, recognizing gain, and then giving cash, a donor may be able to transfer the appreciated security to the Foundation. The Foundation can liquidate the asset, provide a charitable receipt, and distribute the proceeds under the donor’s instructions.
When applicable requirements are met, a direct gift of appreciated securities avoids capital-gains tax associated with a sale while also achieving a fair-market-value deduction. Foundation options include an Advise & Consult Fund®, Increase Fund, Single Charity Fund, or an immediate gift to a church or ministry.
Consider Other Non-Cash Assets
Donors may also explore gifts of real estate, privately held business interests, cryptocurrency, and other non-cash property, which the Foundation is able to accept. These assets can require added time, valuation, due diligence, and professional coordination, but the tax savings for greater giving associated with giving these kinds of assets typically are easily worth the extra work. As in a gift of publicly-traded stock, capital gains tax is avoided while a fair-market-value deduction is achieved. Donors should talk with the Foundation and their own legal and tax advisers before selling or transferring a complex asset.
Use a Qualified Charitable Distribution From a Traditional IRA
A qualified charitable distribution (QCD) may be an option for a traditional-IRA owner age 70½ or older. A QCD must be paid directly by the IRA trustee or custodian to an eligible charitable organization or to a single charity fund of a foundation—not first to the donor.
Subject to federal requirements and annual limits, a qualifying distribution counts as a required minimum distribution but is excluded from gross income. That exclusion has the effect of a charitable deduction. However, since it is not actually a charitable deduction, the donor who makes a QCD may take the standard deduction – effectively, a double deduction. Confirm the effect for the particular year with a qualified tax adviser.
The Foundation’s IRA Charitable Rollover program directs QCDs to one or more Single Charity Funds. A Single Charity Fund benefits one identified charitable organization while allowing the donor to recommend grants over time.
Four Questions to Help Guide Your Giving
Do you own appreciated stocks or bonds?
Consider whether a direct gift of the asset, rather than a sale followed by a cash gift, fits your charitable and tax objectives.
Do you have a traditional IRA?
If you are age 70½ or older, ask whether a QCD is appropriate. If so, make sure the IRA custodian pays the amount directly to the eligible charitable recipient, which may be a Single Charity Found at the Foundation.
Do you want to support one ministry or many?
A donor with one long-term charitable focus may find a Single Charity Fund useful. Those seeking broader flexibility will want to discuss other Foundation options.
Should you consider a Single Charity Fund or an Advise & Consult Fund® or Increase Fund?
A Single Charity Fund is tailored to ongoing support of one designated charitable organization and is the Foundation’s identified QCD vehicle. Advise & Consult Funds® and Increase Funds enable donors to choose over time multiple charities for grants, and typically are used for appreciated asset giving.
Begin With the Asset and the Ministry
Start with two questions: What do you wish to give, and what ministry do you hope to strengthen? Considering the asset first can help you explore whether appreciated property, or a QCD, and what Foundation fund will advance that purpose.
Educational notice: This article is for general educational and informational purposes only. It is not legal, tax, financial, or investment advice, and it does not create an attorney-client or other professional relationship. Tax rules, eligibility requirements, annual limits, and individual circumstances can change the result. Before making a gift, consult your attorney, tax adviser, and financial adviser, and coordinate with the PCA Foundation regarding gift acceptance and transfer procedures.