While we know generous giving is a vital to our own spiritual lives and to the health of Christ’s church, I have discovered that many are unfamiliar with some of the most tax-wise ways to give. Below, I have listed and described some strategic ways to support your church in pursuing Christ’s mission in the world. If you have any questions about these strategies (my personal favorite is #5 – a great plan for some senior adults), contact me at firstname.lastname@example.org or 540.563.5110.
Strategy #1: Appreciated Stock, Mutual Funds, or Real Estate
People often purchase stock (or mutual funds) as a way of building wealth over the long term -- for retirement, for kids and grandkids, and for blessing others. While the annual dividends may be minimal, appreciation in value over the long term may be very substantial. If someone purchased $1,000 of Apple stock on December 12, 1980 and never sold it, it would be worth over $315,000 today. Although gains in a stock’s value are not considered normal income, they are a part of God's blessing that we should consider as we give generously for the sake of Christ and the progress of the gospel.
With the American stock markets at record-highs, making a gift by transferring stock that has appreciated in value to the church can be a very wise way to give. Here’s why: a gift of appreciated stock minimizes federal taxes in two ways. First, when someone donates a stock, the appreciation in the value of the stock is not subjected to capital-gains taxes (if the stock has been owned for at least one year and one day). Second, the full, fair-market value of the stock on the date it is transferred to a church may be itemized on the donor’s federal income tax return.
How about an example? Let's say someone wants to donate $10,000. If they write a check and itemize their donations, they will save $3,960 on their federal income taxes (using the top tax bracket rate for our example). However, if they own $10,000 in stock that originally cost them $1,000 and transferred the stock, they would save $1,800 in capital gains taxes (again using the top rate for this example) and $3,960 in itemized deductions. So, the gift of stock would have a net cost of $4,240, and the gift of cash would have a net cost of $6,040. Using appreciated stock in this example, the gift cost the donor nearly 30 percent less. Or, s/he could give 30 percent more than usual without costing any more money. Tax-wise giving can make a huge impact!
Individuals who own other types of appreciated assets (real estate, a vacation home, an inherited land/property, etc.) may also transfer the deed to their real estate to the church. The gift and deductions work in a similar way as appreciated stock.
For information on transferring appreciated stock or a home, land, private business, or other real property to North Roanoke, call the church office at 540.563.5113. If you are planning to transfer stock or other property to the church, please notify the church before making your gift to ensure proper processing and accounting for your gift.
Strategy #2: Cash/Check/Online Giving
While gifts of appreciated assets make great gifts, most people give by using cash, checks, or online giving. These remain great ways to give.
Indeed, one of the best gifts you can give to your church is consistency in giving. This helps with cash flow throughout the year and especially in the summer months when many programs occur. If you want to support your church regularly and generously, pick whatever method is best for you, and stick with it.
Online giving is safe and secure and provides a reliable way to be consistent throughout the year. If you want to be a consistently generous giver in 2018, consider establishing a recurring (weekly or monthly) gift using the online giving page available from nrbc.org, and consider getting started this week.
Strategy #3: Kroger Rewards/Amazon Smile Foundation
While being generous begins with wise spending decisions, living does require eating, and birthdays and Christmas often require a purchase from Amazon. When you buy groceries at Kroger and gifts and other essentials at Amazon (smile.amazon.com), you can register North Roanoke as your non-profit of choice, and a portion of your purchase will help pay down the debt on the Community Center.
Strategy #4: Required Retirement Distributions
At 70 and 1/2 years of age, seniors are required to take distributions from traditional IRAs even if they do not need to take them. Last year, Congress recently made permanent (as permanent as anything can be with Congress) a rule allowing payments made to churches and charities to count as a part of the minimum required IRA distribution. If you are taking a retirement distribution that you do not need and, as a result, unnecessarily increasing your income taxes, consider directing an IRA distribution directly to North Roanoke Baptist Church to reduce your overall income and associated taxes.
Strategy #5: Gifts that Pay an Income for Life
Yes, you read that heading correctly. You can make a gift that pays you an income for life!
The vast majority of our nation’s wealth is held by men and women who are 70 and older. However, that wealth is often held in assets that provide very little income for living today.
Stocks typically offer a minimal dividend, and savings accounts currently offer almost no interest at all. However, with a charitable gift annuity or charitable trust, senior adults can contribute a portion of their accumulated wealth to their church and dramatically increase the income they receive. Income can often be increased by four or five times and sometimes even more. Also, when the gift is made, the donor receives an opportunity to deduct the fair-market value of their future gift from their income taxes which can offer savings on income taxes for up to 6 years depending upon the size of the gift. This means it is possible that a gift could both increase your income and reduce your overall income taxes.
Gifts that pay an income can be complicated and should not be considered without consulting with your CPA or legal adviser. If you would like some additional information or a personal gift illustration to share with your tax adviser or need a referral to a Christian adviser, please contact the church office.
Deadline for 2018 Giving
Gifts must be received or postmarked by December 31 to qualify as a tax-deductible gift for 2018. Online giving is available from nrbc.org. Online gifts must be time-stamped by 11:59PM EST. To be safe, please consider submitting any last-minute, online gifts by 10:00PM.
Checks may be mailed to: North Roanoke Baptist Church, 6402 Peters Creek Rd, Roanoke, VA 24019.
1These strategies and illustrations are intended as helpful examples but not professional advice for any reader’s particular situation. Before making a special gift, check with your adviser on your particular circumstances.
Last updated: 12/22/18