Lexington, KY - This holiday season of thankfulness and gift-giving to family and friends can also be a good time to stop and think about making a gift to a worthy cause.
There are many nonprofit institutions and organizations that are contributing to the quality of life in the Bluegrass and the commonwealth. And there are several reasons for considering a gift to one or more of them at this time.
Reduce your tax liability.
A gift to a qualified charitable organi-zation made by Dec. 31 can potentially reduce your income tax liability for 2011. One income tax deduction that remains available is the charitable giving deduction. Gifts to approved nonprofits can qualify for income tax deductibility on 2011 tax returns if the gifts are completed by the end of the year.
Take care of nonprofits in tough economic times.
The extended economic downturn has had an effect on the philanthropic income of most nonprofits. This includes everything from museums, to institutions of higher education to social agencies. A calendar year-end gift will be welcomed and helpful to any organization in meeting its budget and providing services in 2012.
Give back to show your appreciation.
A gift at this time of year to a charitable organization is a tangible, helpful way to "give back." Most everyone has benefitted in some way from nonprofit agencies, including civic organizations, cultural and educational institutions, service agencies, religious institutions, humanitarian agencies - and the list can go on. Take a moment and think of the nonprofit institutions and organizations that have contributed to your life and the lives of your family members, and make a gift in appreciation during this season of giving.
Consider it an investment.
A gift to a nonprofit agency is a good investment in your community - at this time of year or any time of year. From Pikeville to Paducah, every community in our state is enhanced by the work and influence of nonprofit organizations. These entities can be strengthened through philanthropy, and their impact multiplied by private support. Consider making such an investment in your community before another year goes by.
Honor a loved one.
A gift at this time of year is an excellent way to honor or memorialize someone important in your life. The impact of a beloved family member, an esteemed teacher, a mentor, a friend or other person can be recognized at this special time of year with a gift made in that person's honor or memory. And most organizations will be happy to provide a notification to the person honored, or to the family of the person being memorialized. This can also be a good way to remember someone on your gift-giving list who simply doesn't need another necktie or scarf.
Perhaps you have already made cash gifts to charitable causes this year up to the federal limit. (Your charitable deductions for cash gifts are limited to 50 percent of your adjusted gross income for a given year.) Maybe you are a generous donor and desire to give even more this year. With an IRA rollover gift, you can transfer excess funds from your IRA to a charitable organization and still make your regular cash gifts up to the federal level. You can give more without paying more in tax.
If you are 70 and a half or older, the federal government will permit you to rollover up to $100,000 from your IRA to a qualified charitable organization without increasing your taxable income or paying any additional tax. These tax-free rollover gifts can be $1,000, $10,000 or any amount up to $100,000 this year. And you can use your gift to meet your minimum distribution requirements.
This option was available in 2010 and was extended through the end of 2011.
"An IRA rollover gift in 2011 is a wonderful way for someone to make a substantial gift from unneeded funds and avoid paying income tax," said Mike Richey, vice president for development at the University of Kentucky. "Retirement fund assets are often overlooked in gift planning, and for many individuals, retirement assets may comprise a large part of their total net worth."
Your gift can be made simply by notifying your IRA plan custodian of your intent to make a current transfer to the nonprofit of your choice.
"Year-end giving is very important to most institutions which depend upon philanthropic gifts to enhance their programs throughout the year," said Richey. "Certainly this is true for UK. We deeply appreciate the financial support of our alumni and friends. And private philanthropy is increasingly necessary for us to provide quality educational and other services to the commonwealth."