LEXINGTON, Ky. (Nov. 30, 2011) — 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 which 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:
· A gift to a qualified charitable organization made by Dec. 31 can potentially reduce 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.
· 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.
· A gift at this time of year to a charitable organization is a tangible, helpful way to “give back.” Many have benefitted in some way from nonprofit agencies including civic organizations, cultural and educational institutions, service agencies, religious institutions, humanitarian agencies, etc.
· A gift to a nonprofit agency is a good investment in the community — at this time of year or any time of year. From Pikeville to Paducah, every community in Kentucky is enhanced by the work and influence of nonprofit organizations. These entities can be strengthened through philanthropy, and their impact multiplied by private support.
· A gift at this time of year is an excellent way to honor or memorialize someone important in a donor's life. The impact of a 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.
For people who have already made cash gifts to charitable causes this year up to the federal limit for deduction, giving is still an option. (charitable deductions for cash gifts are limited to 50 percent of adjusted gross income for a given year.) With an IRA rollover gift, donors can transfer excess funds from an IRA to a charitable organization and still make regular cash gifts up to the federal level.
In regard to donors 70 and a half or older, the federal government will permit themn to rollover up to $100,000 from your IRA to a qualified charitable organization without increasing their 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 gifts can be used to meet 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.”
Gifts can be made simply by notifying your IRA plan custodian of your intent to make a current transfer to UK, or 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.”