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25 Days of Giving: 4 Huge Benefits of Charitable Gifts of Stock

woman holding sparkler for stocks

Thanks for reading the 25 Days of Giving series. I’m “unwrapping” posts on various aspects of charitable giving each day through Christmas.

A less-than-obvious, but an ideal asset for charitable donations is appreciated long-term, publicly-traded stock. Before we list the benefits, let’s break down the terms.

Definitions

Appreciated simply means increased in value.

Long-term means stock held for more than one year; stock held for 366 days. A long-term capital asset is generally taxed at a lower rate.

Publicly traded stock just means a publicly held company whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over the counter markets.

Benefits

The benefits of charitable gifts of appreciated, long-term, publicly-traded stock are numerous.

Under federal tax law, charitable gifts of appreciated, long-term stock have a double benefit: (1) the long-term capital gain is excluded from taxable income, and (2) the charitable contribution deduction is the fair market value of the stock. 

Gifting Publicly Traded Stock to Charity? Here’s how to Assess Value

Iowa law also provides a third benefit for making a charitable gift of stock; donors can receive a state tax credit of 25% of the gift under the Endow Iowa Tax Credit Program. 

As if that wasn’t enough to convince you there’s yet another benefit. The substantiation rules for gifts of donated securities are more relaxed than for gifts of other types of donated property. Gifts of publicly traded securities do not require an appraisal to document value. This is important, as non-cash gifts of more than $5,000 generally require a qualified appraisal by a qualified appraiser. (In case you were wondering, the value of gifts of publicly traded securities are based on a simple calculation: the arithmetic mean of the highest and lowest selling prices on the date of the gift.)

If you’re interested in gifting stock to a qualified charity as a part of your end of year giving, make sure you’re doing so in a way that maximizes all of your financial benefits. Or, if you’re a nonprofit leader wanting to accept gifts of stocks, don’t hesitate to reach out via email or phone (515-371-6077) if you would like to discuss further.

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25 Days of Giving: Teaching Kids About Charity

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Girl hanging ornaments on tree

Happy 25 Days of Giving Series! If you’ve been reading along throughout December so far, thank you. If you’ve happened upon the GoFisch blog just now, welcome. I hope to see you back here often.

Celebrating the holidays with children, be it family or friends’ children, can be a wonderful opportunity to “see” the magic and delight of the season through their experiences. The season of giving is also an opportune time to teach and reinforce the importance of a different kind of giving beyond the wish lists for Santa and filled stockings. Consider these few tips when teaching the future generation of philanthropists about why charitable giving is important, and how to practice charity during December…and all year round.

Think Tradition

holiday themed cupcakes

Just like decorating cookies, trimming the tree, singing carols, or any other one of your family traditions, charitable giving can be made into an annual family affair. Incorporate this in a way that works for you and your family. One idea is instead of the traditional advent calendar in which children would usually get a small toy or candy each day give some loose change or “gift” a charitable activity you can do together. For the money, the child can collect and then at the end of the advent period have then donate their money to a cause they care about.

Talk About It Together

Similarly to how I counsel my estate planning clients on the importance of speaking with family members about decisions for their estate, it’s important to actually talk about charitable giving as a family. Indiana University Lilly Family School of Philanthropy conducted a study and found that children whose parents talk with them about donating are 20% more likely to give to charity than kids who do not have those conversations with their parents.

snowmen figurines

Visit local charitable organizations together. (Or, if that’s not accessible at least go online to the charities’ websites.) Introduce your child to what the charity does and why it’s important. Organizations whose missions align with your child’s interests are a good place to start. For instance, the kid who loves animals may be interested to know that the local animal rescue helps animals when they get lost or hurt.

Practice What You Preach: Volunteer Time

Charitable giving doesn’t just have to be monetary. When possible set up volunteer activities you can do together. However, volunteer opportunities for children can be limited, so don’t be afraid to get creative. If your kiddo loves riding her bike around the park, plan a day where you pick up trash around the park. If your son loves to help you plant flowers, see if he can help out at the community garden. Of course, youth organizations like scouting programs (for example), can be a great opportunity for your child to put charitable work into action. Kids, just like most of us, will better be able to “see” the impact of charitable giving when they experience it firsthand. (Note: volunteer time is not tax-deductible, but out-of-pocket expenses associated with volunteer work are!)

child in front of stocking

Shared Generosity

From your year-end giving charitable dollars, set aside a portion specifically for the kids to decide how to allocate. Have them brainstorm on with you and provide them with any suggestions/charities to match the causes they care about. You could also try out a matching program. Explain to them that every dollar they save throughout the year and want to donate to charity, you’ll match. If you need a colorful visual explain with Monopoly money.

Tips for Setting Charitable Goals

 How do you involve your entire family with charitable giving? I would love to hear your ideas. Remember, this doesn’t have to be your own children. If you’re a teacher or simply an involved aunt/uncle or grandparent you can still instill in children the important philosophy of why giving can be the best gift of all.
Questions about your own year-end charitable giving? Contact me by email or phone (515-371-6077) at any time. 
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25 Days of Giving: Nonprofit Policies Your Organization Needs to Consider

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heart in pages of book

Welcome to the newest post in the 25 Days of Giving series. Have questions or a topic related to charitable giving you want covered as a part of the series? Contact me!

You want your favorite charity to be wildly successful. Whether you’re working for the nonprofit as staff, serving on the board of directors, or assisting as a donor or volunteer, you want your nonprofit to have every chance to reach its goals and objectives. 

The Internal Revenue Service (IRS) strongly encourages nonprofits to adopt specific governance policies to limit potential abuse, protect against vulnerabilities, and prevent activities that would go beyond permitted nonprofit activities. The IRS also audits nonprofits, just as it audits companies and individuals, and having these policies in place can only help you should you be audited. Finally, and perhaps most importantly, having solid policies and procedures in place will provide a foundation for soliciting, accepting, and facilitating charitable donations. 

Each nonprofit is unique, and accordingly policies and procedures needed will vary for each. For instance, a non-operating private foundation will likely need a different set of documents than a public charity. However, most nonprofits will want, at the very least, to consider having the following policies in place. 

Articles of Incorporation

Articles of incorporation are necessary to even form a nonprofit corporation; the document is filed with the state and accompanied by a filing fee. This policy can be known by other monikers as “certificate of incorporation,” “articles of organization,” or “charter document.” Think of this as the constitution of the organization. While it can be fairly short, there are some necessary elements in the articles that are required for federal tax-exempt status. Those elements include a statement of purpose, legal address, emphasis on not-for-profit activities, duration, names and address of director(s), and a dissolution clause, among others. You may want to check out the IRS’ sample charter.

Board Roles and Responsibilities

Nonprofit board members are generally tasked with two major responsibilities of support and governance. A board’s rules and responsibilities document should outline the requirements and responsibilities of board members. Some examples of basic components include fundraising participation, determining the organization’s mission and direction, selecting and regularly evaluating the nonprofit director/CEO, and protection of public interest. A policy regarding board roles and responsibilities should encourage nothing short of ethical and legal integrity within board members.

boardroom chairs

Bylaws

If you’ve ever been part of any board or committee, you’ve definitely heard reference to the bylaws and received a copy upon joining the organization. Nonprofit bylaws serve as the internal operating methods and rules that specify things like the election process of directors, employee roles within the nonprofit, and operational manners of meetings. Specific language in the bylaws is not required by federal tax law, but some states may require nonprofits to have written bylaws to be considered tax-exempt. This document can most often be used to resolve uncertainty between board members and takes the guesswork out of operations.

Code of Ethics

Just as it sounds, a code of ethics document puts in place a set of guiding principles for behavior, decision making, and activities of those involved in the nonprofit, including board members, employees, and volunteers. While principles innate to your organization such as honesty, equity, integrity, and transparency may be understood by all involved, this formal adoption allows those involved to make a formal commitment to ethical actions and decisions. Sometimes this document is known as a “statement of values,” or “code of conduct.” Many organizations post their code on their website to demonstrate accountability and transparency.

Compensation Policy

Competitive compensation is just as important for employees of nonprofits as it is for for-profit employees. Having a set policy in place that objectively establishes salary ranges for positions, updated job descriptions, relevant salary administration, and performance management is used to establish equality and equity in compensation practices. A statement of compensation philosophy and strategy which explains to current and potential employees and board members how compensation supports the organization’s mission can be included in the compensation policy.

Confidentiality

A nonprofit’s board members have a duty of confidentiality due to their fiduciary obligation to the organization. This duty is there regardless of any written policy or not, but it’s certainly a best practice to clarify and explain why and how confidentiality is important to the specific organization. A confidentiality policy can include elements such as the following:

  • definitions of what matters are considered confidential
  • determination to whom the policy applies
  • a statement that board members do not make any public statements to the press without authorization
  • a process by which confidential material may be authorized for disclosure

secret mouth

Conflict of Interest

This is arguably one of the more essential policies a nonprofit board should adopt. A conflict of interest policy should do two important things:

  • require board members with a conflict (or a potential conflict) to disclose it, and
  • exclude individual board members from voting on matters in which there is a conflict.

Note the IRS Form 990 asks whether the nonprofit has such a policy as well as how the organization manages and determines board members who have a conflict of interest. This policy is all too important as conflicts of interest that are not successfully and ethically managed can result in “intermediate sanctions” against both the organization and the individual with the conflicts.

Document Retention

A document retention policy doesn’t mean that EVERY piece of paper and digital report should be kept for a specific duration. But, consider if a document is unknowingly tossed by a nonprofit employee and is later needed in a legal matter. That can cause irrevocable damage. So, ensure all board members, staffers, and volunteers are trained and have a copy of the document retention policy, which should clarify what types of documents should be retained, how they should be filed, and for what duration. This policy should also outline proper deletion/destruction techniques.

Employee Handbook

An employee handbook is another one of the more common nonprofit documents. A quality handbook should clearly communicate employment policies and enforce at-will provisions to all employees. Employment laws are complicated and complex. An employee handbook written/reviewed by a licensed attorney is a good legal step toward avoiding employment disputes. (Yes, just as you need a lawyer to write your estate plan, you’ll need a lawyer to craft/review your employee handbook.) Review your employee handbook regularly, as an out-of-date or poorly written handbook can leave the organization open to employment ambiguity and conflicts.

When is an Employee Handbook not an Employee Handbook?

Financial Policies and Procedures

This document specifically addresses guidelines for making financial decisions, reporting the financial status of the organization, managing funds, and developing financial goals. The financial management policies and procedures should also outline the budgeting process, investment reporting, what accounts may be maintained by the nonprofit, and when scheduled auditing will take place.

Endowment

This resolution concerns funds (and the interest from these funds) that are kept long term. It generally aids the organization’s overall operations. An endowment policy should consider the purpose of the endowment, how the endowment will benefit the mission of the nonprofit, management practices of the endowment, disbursement policies, and investment strategy. (This blog post from GuideStar offers five steps to starting an endowment.)

Gift Acceptance

Gift acceptance is yet another policy the IRS considers to be a best practice for any tax-exempt nonprofit, and the gift acceptance policy can help set acceptance policies for both donors and the board/staffers. There is no federal legal requirement, but this policy does allow you to check “Yes” on Form 990. If well-written and applied across the organization, the policy can help the organization to kindly reject a non-cash gift that can carry extraneous liabilities and obligations the organization is not readily able to manage.

Outstretched hand

Investments

One way a Board of Directors can fulfill their fiduciary responsibility to the organization is through investing assets to further the nonprofit’s goals. But, before investment vehicles are invested in, the organization should have an investment policy in place to define who is accountable for the investment decisions. The policy should also offer guidance on activities of growing/protecting the investments, earning interest, and maintaining access to cash if necessary. Many organizations hire a professional financial advisor or investment manager to implement investments and offer advice. This person’s role can be accounted for in the investment policy.

Legal & Financial Responsibilities of Nonprofit Board Members

Whistleblower

Nonprofits, along with all corporations, are prohibited from retaliating against employees who call out, draw attention to, or “blow the whistle” against employer practices. A whistleblower policy should set a process for complaints to be addressed and include protection for whistleblowers. Ultimately this policy can help insulate your organization from the risk of state and federal law violation and encourage sound, swift responses of investigation and solutions to complaints. Don’t just take it from me, the IRS also considers this an incredibly helpful policy:

“A whistleblower policy encourages staff and volunteers to come forward with credible information on illegal practices or violations of adopted policies of the organization, specifies that the organization will protect the individual from retaliation, and identifies those staff or board members or outside parties to whom such information can be reported. (Instructions to Form 990)”

Policies = Powerful

While these documents may sound like a lot of work, the time and energy you place into ensuring your nonprofit is set up for success will pay off in the long run by saving you legal and IRS fees, internal conflict, violations, and compliance issues. Plus, you can enlist a qualified nonprofit attorney to do the leg work for you! 

You may say, “My organization already has a great set of policies in place!” Which is great. But, you should continuously update them as needed/wanted. A policy from 2002 may have been perfect at the time but could be in dire need of updates.

I’d advise making policies the main subject of a board meeting to review what policies have been adopted, which policies need revisions, and which policies you’re missing altogether. If you’re not sure where to start, or how policies should be drafted, read, or enacted, I would be happy to offer you a free one-hour consultation. You can also take me up on my 10 for 990 policy special.

Nonprofit Policy Special: 10 for Form 990

I’m here to assist in drafting or revising your set of nonprofit policies, so don’t hesitate to contact me via email or phone (515-371-6077). We’ll schedule your free one-hour consultation and make a plan to set your organization up for success!

(Note this article is provided for general information only and not intended as legal advice for your specific nonprofit organization. Again, please contact me to discuss your organization’s unique needs.)

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#GivingTuesday: Facts & Figures

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#GivingTuesday world

The mission of Gordon Fischer Law Firm is to maximize charitable giving in Iowa. To that end I work with nonprofits on legal compliance and training for accepting gifts (especially complex ones) as well as the donors who want to give to their favorite organizations and causes. Small Business Saturday is great for the community and Cyber Monday is fun, but the post-Thanksgiving “day” I look forward to the most is #GivingTuesday.

Created by the Belfer Center for Innovation & Social Impact at the 92nd Street Y in New York, along with the United Nations Foundation, in 2012, #GivingTuesday is a celebration for support of philanthropy and giving. Social media has helped grow the event into a global occasion, connecting countries, organizations, and donors around the world.

Giving Like a Rock Star: Legal Tips for Donors on Giving Tuesday

Giving Tuesday takes place mid holiday season and is a great opportunity to spread awareness of nonprofits midst holiday cheer. Whether you’re prepping your nonprofit’s activities, messaging, and events for #GivingTuesday or are a donor preparing to give (and encourage others to do the same) let’s take a look at some stats from last year (2018) that show the enormous impact #GivingTuesday has.

  •  Faith-based charities received the largest sector percentage of #GivingTuesday donations made online.
  • At $125 million Facebook was the largest payment processing platform.
  • $3.6 million of Giving Tuesday donations were made online and 17% of all views of online donation forms were made on a mobile device
  • $380 million was given total (which was a 45% increase over 2017)
  • More than 150 countries participated
  • Since 2012, Giving Tuesday has raised more than $1 billion in the U.S.

All year, not just on #GivingTuesday, GFLF is thrilled to work with nonprofit organizations on elements of operations including, but certainly not limited to;

If your nonprofit is interested in any such services, I offer a free consultation!

#GivingTuesday is a reminder that, against the backdrop of the “busy” of the holiday season, the spirit of giving is thriving. Want to chat about charitable giving? Reach out anytime by email or phone (515-371-6077)

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25 Days of Giving: What the Heck is a Bargain Sale?

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wreath on the door

Thanks for reading the 25 Days of Giving series. We’re “unwrapping” posts on various aspects (some well known, and some more obscure) of charitable giving each day through Christmas.

I know what you’re thinking…a bargain sale means discounts on stuff at the store. But, I’m talking about a different kind of sale—a useful charitable giving tool/technique.

Bargain sales defined

Bargain sales can be a useful charitable giving tool/technique. A bargain sale is a transaction in which a donor receives less than the full market value of property transferred to the charity. The transaction is treated as part sale, part gift, with the donor’s basis allocated proportionally between the gift amount and the sale amount.

Simple example of a bargain sale

Let’s take a simple example. Assume Jill Donor owns farmland worth $1 million, for which she paid $200,000 years ago. Jill sells the land to her local community foundation for $500,000 and starts her own donor-advised fund. Jill then makes a gift of the difference ($500,000) between the sale price and the fair market value of the farmland. Jill must pay tax on the gain element but may receive a charitable deduction on the gift element.

farmland bargain sale

The total basis of $200,000 is allocated between the gift and sale portions. Since Jill sold the land for half price of fair market value, the basis is allocated 50/50. Therefore, the allocated basis is $100,000. The gain, then, is $400,000; assuming the top capital gain tax rate of 20%, this would mean $80,000 of capital gains tax due. But Jill also avoided another $80,000 of capital gains tax by the bargain sale of the property.

The net result in this simple example is positive for Jill. Again, Jill received $500,000 in cash. But, she also may receive a charitable deduction for having gifted $500,000. The charitable deduction at, say, the top rate of income taxation, 37%, would be $185,000. One way to look at this entire transaction is that Jill received $500,000, paid $80,000 in capital gains taxes, but received a $185,000 deduction, meaning a net of positive cash flow of $605,000 to Jill.

Remember, all Iowans are unique and have individual legal and tax issues. Consult your own professional advisor for personal advice. Questions? Contact me at any time via email (gordon@gordonfischerlawfirm.com) or by phone (515-371-6077).

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25 Days of Giving Starts December 1

25 days of giving - decemer 2018

It’s not a cheese, wine, or bath products advent calendar…but beginning December 1 through Christmas Day the GoFisch blog will feature a new piece related to giving. ‘Tis the season for giving and the “25 Days” posts will feature information important for both nonprofit executives and donors.

What I want to know is: what questions about charitable giving do you have? From specific to general, email them to me at Gordon@gordonfischerlawfirm.com.

Remember, no matter what winter holiday you celebrate, all have the power to make a positive impact through charitable giving!

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Happy Thanksgiving!

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thanksgiving thankful

I would like to wish you a very happy Thanksgiving. I hope that you have the opportunity to spend quality time with your loved ones. I’ve taken a much needed moment this holiday to take a step back and think about all GFLF has to be thankful for. I owe so much to my clients, friends, and family who have helped make this year a successful one.

grateful quote

Here are just a few of the things GFLF has to be exceedingly grateful for:

But, really, this is a short list—the tip of the turkey, if you will—of what GFLF is perpetually thankful for.

Wishing you full bellies and hearts today,

Gordon Fischer

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Giving Tuesday: Nonprofit Online Donation Compliance

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Giving Tuesday How Will You Get

Giving Tuesday is held the Tuesday after Thanksgiving (December 3 this year) and is an important day for nonprofits to reach out to current and potential donors. Scroll through your social media feeds with the hashtag #givingtuesday and it seems like every organization, from big to small, is running digital marketing campaigns related to the day. Unlike Black Friday’s lines outside of stores in the middle of the night, #GivingTuesday’s activity is largely social media based. For nonprofits, all of this online activity is typically directed to online giving portals.

These online giving pages facilitate easy charitable giving, but before you send inspired donors to your giving portal, it’s wise to ensure your organization is compliant with associated legal issues. Whether you have created your own donation platform or are using a third-party platform embedded on your site, make sure to follow these legal tips:

Donation Receipt

It’s important to offer a donation receipt to your donors, so they make take the charitable contribution deduction on 2018 taxes if they choose so. A proper receipt—whether in a generated pdf, email, mailed letter, or other printed/printable form—should state the donor’s name, date of the contribution, and amount given.

November Charitable Giving: National Philanthropy Day & #GivingTuesday

If the donation is greater than $250 a written statement should be obtained stating that the organization did not give any services or goods. If the charity does, in fact, give goods or services to the donor in return for a donation, the acknowledgment should describe what was given and provide an estimate of value of the goods or services.

If those goods and services provided are valued greater than $75, the written statement must also specify the amount of the donation that is tax-deductible. (This figure is the amount of money that exceeded the value of the goods or services exchanged by the charity.)

You want to make certain your communications (such as written acknowledgments and receipts) with donors meet all legal requirements, as just discussed. But that doesn’t mean you can’t also have some fun with these communications, or use them as an opportunity to stick out above the noise with creativity. Here are a couple of solid articles, from The Balance and CauseVox featuring ideas for upgrading your thank you’s to donors.

Online Charitable Solicitations

Fundraising activities fall under state law, and many states require charities (as well as individuals hired to assist the nonprofit with fundraising) to register with that state BEFORE any donations are solicited from residents of said state.

A charitable solicitation can be considered anything from a YouTube video with a call to action to donate, an e-newsletter sent to a subscriber list, to a simple Facebook post (and everything in between). Obviously, online giving has made figuring out which states your organization needs to register with complicated. Case in point, your organization may operate and be registered in Iowa, but if you have a “donate” button on your website, donations could come from residents of any state (or any country for that matter). Even the presence of a donation button could subject an organization to a registration requirement in some states, but won’t in other states. (Charitable solicitation registration is not currently required in Iowa.)

The main policy guidance for state regulators on this matter was published in 2001 by the National Association of State Charity Officials (NASCO), called the Charleston Principles. But, these provisions aren’t law, merely suggestive, so how should your charity deal with online donations? It’s far better for the organization to be safe rather than found noncompliant which can involve costly penalties.

Harbor Compliance Charitable Registration

Harbor Compliance | Charitable Registration

Nonprofits accepting online donations have two main approaches, according to the white paper, “Guidance for Compliance with State Charitable Solicitation Registration Requirements,” published by Harbor Compliance and the National Council for Nonprofits.

  1. Your charity could register (or file for an exemption) in all 41 states that require such registration, but that can be costly. The total fees to register your charity in all those states can range up to $5,000, (and that doesn’t even include professional fees you may need to incur, like paying lawyers or CPAs).
  2. A second option is to register only with states that require registration and from which you would reasonably expect donations. For instance, if your nonprofit operates in Iowa, depending on your fundraising activities, it could be reasonable to expect donations from residents of neighboring states such as Minnesota. Or, if a significant percentage of subscribers to your e-newsletter is from Illinois, it’s smart to register there. With this option, it’s important to note that if you do receive a contribution from residents of another state that requires registration that triggers the need to register with that state.

Either way, it’s a good idea to look into the Unified Registration Statement (URS), a consolidated multi-state registration form. It’s also important to remember not only the initial registration but also registration renewals (complete with deadlines and late fees).

Crowdfunding Considerations

Crowdfunding is anticipated to be a $90-96 billion dollar industry by 2025, and there are more and more nonprofits utilizing it as a tool within the fundraising mix. If your charity is using a crowdfunding site (Kickstarter and Indiegogo are both popular platforms) the charitable solicitation registration requirements covered above apply. But, this is also a good subject to broach the topic of fraud and misrepresentation because crowdfunding has opened the door to more people being involved. Charitable organizations are prohibited from engaging in fraud, using deceptive practices that are likely to create confusion, and misrepresenting the nature, purpose, or beneficiary of the charitable solicitation. This one’s a biggie because committing fraud or misrepresentation could mean a lengthy and expensive litigation process.

To avoid this risk it’s wise to have a vetted gift acceptance policy with clear guidelines regarding crowdfunding. Organizations should keep an eagle eye on fraudulent crowdfunding campaigns that may use the nonprofit as a beneficiary, but fail to ever actually donate funds. Yet, if dedicated volunteers and donors do want to crowdfund for you, that’s fantastic. The organization just needs to keep a close watch on the campaign’s operation and offer crystal clear guidance on what campaigning on behalf of the charity is acceptable and what is not.

A day when the world comes together

#GivingTuesday is coming up quick (where did the year go?!), so now’s the time to double check any potential issues for noncompliance that could occur. If you have any questions with regard to your online donation compliance I would love to offer a free one-hour consultation. Contact me via email or on my cell phone (515-371-6077). Best of luck with your #GivingTuesday campaigns!

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November Charitable Giving: National Philanthropy Day & #GivingTuesday

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woman tossing leaves in air

With its feast of turkey, stuffing, and mashed potatoes, Thanksgiving is the obvious holiday to look forward to in November. But the overall focus of Thanksgiving—the concepts of giving, sharing, practicing gratitude—is something you can cultivate for the entire month of November, especially on the lesser-known “holidays” of National Philanthropy Day and Giving Tuesday(technically in December this year).

National Philanthropy Day

National Philanthropy Day

On November 15 plan to celebrate National Philanthropy Day (NPD) with a donation of time or funding to a cause that’s near and dear to your heart. No matter how much you’re able to give, the point of this day to recognize that charitable donors and volunteers make a significant difference and impact. As the Association of Fundraising Professionals puts it:

“NPD is a celebration of philanthropy—giving, volunteering and charitable engagement—that highlights the accomplishments, large and small, that philanthropy—and all those involved in the philanthropic process—makes to our society and our world.”

A man by the name of Douglas Freeman conceptualized and organized the initial (unofficial) National Philanthropy Day in the early 1980s. Then in 1986, President Ronald Reagan designated NPD as an official day. NPD is also a key event a part of a grassroots movement that intends to raise awareness and interest for the importance of effective philanthropy.

Giving Tuesday

Giving Tuesday

Popular on and spurred forward through social media, Giving Tuesday is often found with an accompanying hashtag (#GivingTuesday). Billed as a “global giving movement” Giving Tuesday is the Tuesday after Thanksgiving and after the shopping sprees of Black Friday and Cyber Monday. Held on December 3 this year, it’s seen as the sort of kickoff to end-of-year giving and it’s encouraged you donate your time, monetary donation, or even just your voice and ideas to a charity/cause that you care for.

Giving Like a Rock Star: Legal Tips for Donors on Giving Tuesday

With giving top of mind in November, maybe you have an idea for how you would like to support the important charities you care about but are unsure of how to go about making certain donations. For instance, did you know you can give to charity through your estate plan? How about the immense benefits of the retained life estate? How does giving fit in with your retirement benefit plan? I’m happy to help. Email me at gordon@gordonfischerlawfirm.com or drop me a line at 515-371-6077.

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Giving Like a Rock Star: Legal Tips for Donors on Giving Tuesday

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giving tuesday 2019

After the onslaught of Black Friday advertising and Cyber Monday announcements filling up your inbox, Giving Tuesday (December 3 this year) feels like a breath of fresh (wintery) air from the shopping rush. The “holiday,” often known by its social media tag of #GivingTuesday, is all about celebrating generosity and philanthropy. Giving charitably to your favorite organizations feels great and allows you to make a difference in your community, state, and the world. But, you also want to make sure your gift is legally compliant and beneficial, particularly for those who are “bunching” their donations to claim the charitable deduction on federal income taxes. 

Before you donate on #GivingTuesday (or any other day) consider these legal tips:

Make Sure the Charity is Qualified

A charitable deduction can result in significant tax savings, but for that to occur, the donation must be made to a qualified 501(c)(3). While that may sound basic, some initiatives may look like nonprofits but actually operate as a business, not a tax-exempt organization. A little bit of research can go a long way here. First, read up about the organization in question online and don’t hesitate to call to speak to a representative. You can also use the IRS’ Exempt Organizations Select Check; limit the search to organizations eligible for tax-deductible charitable contributions.

(If your favorite organization is in need of assistance for obtaining tax-deductible status, don’t hesitate to reach out.)

#GivingTuesday What Will You Give?

Sufficient Documentation

Proper documentation is required in order to take the charitable contribution deduction for contributions of $250 or more. This means you need written acknowledgment that expresses the required info of the donee (charity), date of donation, and monetary amount. It’s your legal obligation as the donor to ask for the written acknowledgment, not the charity’s obligation to offer it.

Here’s a simple breakdown of what’s needed for specific types of giving-

  • Gifts of less than $250 per donee — you need a canceled check or receipt
  • $250 or more per donee — you need a timely written acknowledgment from the donee
  • Total deductions for all property exceeds $500 — you need to file IRS Form 8283
  • Deductions exceeding $5,000 per item — you need a qualified appraisal completed by a qualified appraiser

Need more info? I go into detail about appraisers in this blog post.

Is your Favorite Nonprofit Up-to-Date for the Federal Income Tax Charitable Deduction?

Restrict in Writing

If you feel strongly about a specific program, region of operation, or use within the nonprofit, you’ll want to restrict the charitable donation. The restriction must be made in writing, at the same time as the donation is made.

Going Global

#GivingTuesday has expanded greatly since its founding in NYC to become a global event. You may hold a foreign-based charitable organization near and dear to your heart and, of course, you may give to that organization, however, your donation won’t qualify for a charitable tax deduction. 

Donations to Foreign Charities not Deductible for Income Tax

Background Research

I work with my estate planning clients on defining their goals for their future and assets. The same baseline advice applies to charitable giving—what are your goals? Do the organizations you are donating to support your giving goals? Look at materials published by  One way to gauge this is by reviewing the nonprofit’s annual information on its Form 990, “Return of Organization Exempt From Income Tax.” This form is intended for the public and includes important financial info. The IRS publishes Form 990 and it’s easy to check out the details on Guidestar, a nonprofit database.

If you have any questions on how to give charitably and do so wisely, don’t hesitate to reach out. Maximizing charitable giving in Iowa is the mission of Gordon Fischer Law Firm and we want to help as many Iowans give confidently as we can!

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