|
How to make gifts count with the IRS
By June Bradham
Nonprofit Development
Q. I am on the campaign cabinet of a charity and am expected to make at least a six-figure gift to the campaign because of my relationship with the organization and my position of leadership. I simply don’t feel I have the liquid cash to do this, so I was thinking of a non-cash gift. What are the rules?
A. Your first and best source of information will be your financial advisor or attorney. But you may also want to go online with the IRS and look for clarification on IRS Form 8283, which gives you a good explanation of non-cash charitable contributions. Very briefly, it outlines the following:
For the donation of a motor vehicle, boat or airplane, you must attach to your tax return Form 1098-C from the receiving organization. If the organization sells the vehicle, your deduction may be limited to the gross proceeds from the sale.
For a gift of $500,000 or more, you must attach a qualified appraisal of the property to your return.
If you donate inventory or intellectual property, such as a patent, an appraisal is not required.
Q. My organization is launching a campaign to raise more that $5 million over the next five years. We have received some non-cash gifts in the past. I read somewhere that almost $40 billion in one recent year was donated this way. What are the best ways to seek gifts of this type?
A. The easy answers are:
Look for gifts of corporate stock. According to the IRS’ Statistics of Income Bulletin, 37.2% of non-cash gifts, a total of $13.7 billion, came from corporate stock.
Look for gifts of real estate. Gifts of real estate accounted for almost $6 billion last year, 16% of the non-cash gift total. The average value per donation was just over $200,000. Easements, which include facade and conservation easements, were the largest category when measured in terms of average donation per return and average amount per donation. Easement donations averaged almost $700,000 per texture.
Look for gifts from people who have the assets and are at the right stage of life. Individuals with adjusted gross incomes of $10 million or more in 2003 made average gifts of $2.8 million. Those over age 65 made more than 40% of non-cash contributions.
Q. I am passionate about an organization that has a budget under $50,000. How do we attract significant gifts?
A. Of the almost $40 billion given in non-cash gifts, almost $8.3 billion were made to foundations. These gifts followed with a little more than $3 billion to religious institutions. Smaller organizations must find at least three supporters who will fund about 75% of their programs as well as work to grow the organization through their contacts and influence with others.
Q. We are an institution that has been serving the citizens of the Lowcountry for more than 50 years. We have not asked for major or capital gifts. Now we need to infuse at least $10 million to accomplish the projects we’ve undertaken. Where should we start?
A. I am going to make the assumption that you have many volunteers working on your behalf. People who volunteer are three times more likely to make a gift as those who do not. Volunteers over 65 with incomes of $100,000 or more are the most generous givers.
First, take a close look at your volunteers and look at which of them, you believe, meet the criteria above. Once you have identified them, make a private appointment with each one, tell them about the vision of the organization and ask them if they would be interested in helping you achieve your goals. If you can attract 10 or more who are passionate about the future and will help you get there, you could ask them to form a campaign steering committee to examine the best way to organize and assess the potential for success.
Q. What is going on with volunteering in the South?
A. According to a recent study titled “Volunteering in America: State Trends and Rankings,” based on 2005 data:
Almost two out of every five (39%) volunteers in the South served primarily through religious organizations; religious organizations also attracted the most charitable gifts.
The combined percentage of volunteers donating time to educational or youth service organizations (23.8%) and to social or community service organizations (13.1%) fell below that of religious organizations. Immediately following was volunteering with hospitals and other health organizations.
Volunteers in the South spent a median of 52 hours on volunteer activities, more than the national median of 50 hours.
June Bradham, CFRE, is the president of Corporate DevelopMint, a full-service fundraising consulting firm based in Charleston. E-mail questions to jbradham@corporatedevelopmint.com.
|
E-Mail This Article
Printer-Friendly Version