The owner of an IRA must complete a designation form that directs where the remaining assets in the IRA should go at the owner's death. A series of IRS private letter rulings have made clear that if the owner designates some or all of the IRA assets outright to charity, the assets will not be subject to ordinary income tax or federal estate tax.
Possible Funding Assets
Ordinarily, the only way to donate IRA assets during life is by first withdrawing the funds and then donating them. In this case, the donor must declare the withdrawn assets as income and then may take an offsetting charitable deduction for the gift. Depending on the donor's tax situation, the deduction may or may not entirely offset the additional income the donor must report.
Many people invest in gold. Their motivations may vary, but the important reality is that your organization likely has numerous supporters with substantial holdings of gold. In many cases, these supporters could make an excellent charitable gift with some or all of their gold. There are, however, several special considerations to be aware of when discussing a gift of gold with a donor.
Endowments are a long-term proposition. Similarly, planned gifts often have a long-term aspect to them in that the wealth being transferred by donors in all likelihood took many years to amass. Frequently as well, donors want their gifts to have an enduring impact.
All in all, even though planned gifts and endowments are ultimately distinct, planned gifts are generally well-suited for bolstering endowments, and many planned gifts do in fact wind up playing that role. Furthermore, a planned giving program can provide a “home” for endowment activities. It is not uncommon for development officers responsible for planned giving also to be charged with directing, or at least assisting, endowment efforts.
The responsibility for gift administration may be in-house or the charity may rely on a service provider to meet the many and varied requirements in fulfilling commitments to donors and beneficiaries of charitable gift annuities. Either way, the so-called “buck stops here” rests with the charity. Donors look to the charity to provide timely and accurate stewardship of their gifts no matter who performs the actual work.
This is the time when it all comes together, or should! Between December and early April the administration and reporting requirements peak.