For advisors: A charitable planning tip sheet

The New Hampshire Charitable Foundation seeks to be a resource to attorneys, CPAs, and financial advisors for any client situation where charitable giving is an option. To make it easy to determine which type of charitable planning tool is best for a particular client, here is a “tip sheet” of common client scenarios:

Streamline and tax-optimize charitable giving

If: Your client supports many different charities every year…

Then: A donor-advised fund can be an excellent tool to help organize their giving. Donors can establish a fund with a tax-deductible donation and then take advantage of the Foundation’s expertise to connect with and recommend grants to nonprofit organizations doing great work in our communities. Clients appreciate how easy it is to support multiple charities while our online donor portal keeps track of everything. Plus, clients can give stock and other appreciated assets to their donor-advised fund, which can maximize resources available for giving and simplify tax receipts.

Support a specific charity while maximizing continuity and impact

If: Your client has supported a particular nonprofit organization for many years, intends for that support to continue, and wants to be sure that their charitable intent is carried out over time…

Then: Through a designated fund at the Charitable Foundation, a client can make tax-deductible gifts – during their life and through their estate – that are used exclusively to support a particular organization. We make distributions from the fund according to the client’s wishes. If the designated nonprofit ceased to operate or changes it mission significantly, the fund remains intact and the Foundation identifies another organization to support with the fund that follows the donor’s original intent. People who are 70 ½ or older can make Qualified Charitable Distributions up to $108,000 per year from IRAs to a designated fund.

Leave a charitable bequest

If: Your client intends to provide for charities in an estate plan and owns an IRA or other qualified retirement plan…

Then: By naming a fund at the Charitable Foundation as the beneficiary of a qualified retirement plan, your client achieves extremely tax-efficient results. Retirement fund assets donated to a philanthropic fund are not subject to income or estate tax, which means the full value of those dollars can be designated for grantmaking to nonprofits.

Evaluate QCDs sooner rather than later

If: Your client missed the 2024 deadline for a Qualified Charitable Distribution (QCD)…

Then: Start planning now for 2025 QCDs, paying close attention to the required process. QCDs are an excellent tool for your clients who have reached the age of 70 ½ to give to a scholarship, designated, field-of-interest, or flexible fund (donor-advised funds are not eligible). Transactions are required to be completed by December 31, so it is best to start early and plan enough time for the transaction to be completed. 

Watch for charitable giving opportunities in business succession planning

If: Your client is beginning to consider exit strategies for a closely held business…

Then: Reach out to us as soon as possible. Gifts of closely held stock to a charitable fund can be an important component of a business succession plan. A client can gift shares of the business, reducing the tax burden when the business eventually sells.

Consider gifts of appreciated stock early in the year

If: Your client’s stock portfolio made big gains last year…

Then: Evaluate whether it might be wise to make gifts of appreciated stock to a fund at the Foundation early in the year, rather than waiting until the end of the year. If certain stock positions are high right now, it’s worth considering whether a gift in the very near future could be a good move to maximize charitable dollars. As a reminder, gifts of stock to a public charity are eligible for a charitable deduction equal to the stock’s fair market value at the time of the gift. And, when the stock is sold by the Foundation, no capital gains tax will apply.

The bottom line here is

If: you encounter any situation with a client where charitable giving could be involved…

Then: please reach out! Most of the time, the Charitable Foundation can work with you on a solution that meets your client’s charitable giving goals and their estate and tax-planning goals.

This report was compiled by New Hampshire Charitable Foundation staff with material provided by Embolden. This article is informational and educational in nature. It is not offering professional tax, legal, or accounting advice. 

For more information about how the New Hampshire Charitable Foundation can help advisors help their clients with charitable giving, please contact Michael DeCristofaro, Foundation director of advisor relations at Zvpunry.QrPevfgbsneb@aups.bet or 603-225-6641 ext. 251.