Lexington, KY - There has never been a better time to invest in the causes you care about. Thanks to the Endow Kentucky Tax Credit, businesses and individuals may be eligible to receive substantial state tax credits for gifts to endowed charitable funds at qualified Kentucky community foundations. Blue Grass Community Foundation is one of four institutions in Kentucky approved to receive these gifts.
For a limited time, donors may receive a state tax credit of up to 20 percent of their charitable gift to permanent endowments that support Kentucky causes - up to $10,000 in tax credit per donor. This is in addition to their federal charitable tax deduction.
Unlike tax deductions, tax credits are taken off a donor's tax bill dollar for dollar. A gift of $5,000 can eliminate a $1,000 state tax liability. A gift of $50,000 or more can eliminate a $10,000 state tax liability. And this tax credit can be carried forward for up to five years. To date, donors to endowments held at Blue Grass Community Foundation have received thousands of dollars in Endow Kentucky tax credits.
However, only $500,000 in tax credit is available and will be awarded on a first-come, first-served basis through June 30, 2012. As of July 22, 2011, $29,000 in tax credit had been allocated, leaving $471,000 available to Kentucky taxpayers.
The Endow Kentucky Tax Credit specifically supports permanent charitable endowments at community foundations, including donor-advised charitable funds. Income from endowments provides annual support for charities and charitable causes in perpetuity.
"At Blue Grass Community Foundation, you may establish and name your own endowment fund, or you may contribute to an existing one to be eligible for the tax credit," said President/CEO Lisa Adkins. "Or, through the Community Foundation, you may choose to support a cause you're passionate about - the arts, homelessness, college scholarships, early childhood education, the environment, the humane treatment of animals, social justice, and the list goes on."
Adkins added that gifts are carefully and prudently managed by the Community Foundation's expert financial advisors. Donors also have the option of using their own professional investment advisors.
"There is no better way to make a long-term difference in the quality of life in our community," she said.
Marsha Dawson also believes that endowments are the best way to make a real, long-term difference. Dawson has established two endowments at Blue Grass Community Foundation: a donor-advised fund dedicated to the memory of her husband, Fenton Dawson, and the Flight 5191 Memorial Preservation Fund to maintain and preserve the memorial to the 49 people who lost their lives in the Comair Flight 5191 disaster. The 17-foot-tall memorial sculpture depicts 49 birds in flight. It will be dedicated at the UK Arboretum on Aug. 27, the fifth anniversary of the disaster.
"I wanted to help preserve the memorial so that others would always have a peaceful, joyful place to remember their loved ones," said Dawson. "I wanted to memorialize my husband who perished in the flight. But I also wanted to make a gift to the community - to neighbors, churches, family and friends - whose outpourings of love and support were so much a part of the healing process for me. I would have chosen to establish an endowment to maintain and preserve the memorial in any case. The tax credit allowed me to give more than I would have been able to otherwise."
Dawson's application for the tax credit has been approved by the Kentucky Department of Revenue. Other donors who wish to contribute to the Flight 5191 Memorial Preservation Fund will also be eligible to apply for the credit.
"Working with Blue Grass Community Foundation has been a wonderful, rewarding experience," said Dawson. "The Community Foundation understands and responds to needs in our community. I wasn't sure about the best way to give. Community Foundation staff asked thought-provoking questions that helped me think more deeply about what I most wanted to achieve. And when I had questions, the Community Foundation answered them frankly, openly and honestly."
The Endow Kentucky Tax Credit is a limited-time offer. But gifts to an endowment fund at Blue Grass Community Foundation will ensure that the charities you believe in will continue to fulfill their missions forever. To apply for the tax credit, donors must file an application for preliminary authorization with the Kentucky Department of Revenue. Instructions and an application for preliminary approval are available online at http://revenue.ky.gov/endowedkytaxcredit.htm.
Contact the Community Foundation to discuss establishing your own endowment fund. Opening a charitable fund is a simple, quick process. There is no set-up fee. A staff of professionals will walk you through every step when you're ready to get started. They will also be available to walk you through the Endow Kentucky Tax Credit application process.
To learn more about Blue Grass Community Foundation and the Endow Kentucky Tax Credit, contact Allison Lankford, vice president/general counsel, at (859)225-3343 or alankford@bgcf.org. Together, we can make a difference.
Have a cause you're passionate about? Not sure which nonprofits best fulfill their mission to support that cause? Check out GoodGiving.net, an initiative of Blue Grass Community Foundation. You'll find portraits of more than 135 Kentucky nonprofits committed to transparency and best practices.
Barbara A. Fischer is director of nonprofit services for the Blue Grass Community Foundation.