February 22, 2024

Give Now, or Give Later? 

Planning your giving for maximum impact

blocks spelling "do it" followed by a block tilted between the words "now" and "later"

“Should I give now, or make a gift through my estate?”

People often ask this when trying to decide how to maximize their impact. Fortunately, the answer is, “You don’t have to choose.” Making a blended gift, one that combines creating a fund during your lifetime with leaving a legacy gift, allows you to experience the joy of giving today with the satisfaction of knowing you’re leaving a lasting charitable legacy.

Blended gifts can be structured in many ways, so you can build a plan that fits your needs and goals. Here is an example of how a blended gift plan might work.

1. Establish a Donor Advised Fund

You can establish a donor advised endowment fund at MCF for as little as $15,000. You will receive the maximum allowable charitable deduction in the year you make your gift, and can typically carry forward any unused deduction amounts for up to five years. Once your fund has been established, you can continue to contribute to it during your lifetime.

In addition to gifts of cash, MCF also can accept gifts of:

  • Appreciated publicly traded stock or mutual fund shares, which qualify for a tax deduction based on their fair market value at the time you make your gift. Gifts of appreciated stock also are not subject to capital gains tax.
  • Complex assets, such as real estate or closely held stock, which also are deductible based on the fair market value at the time of the gift and are not subject to capital gains tax. (A qualified appraisal typically is required to establish the fair market value of these gifts at the time they are made. For that reason, they generally require more time to process.)

2. Make Distributions and Involve Your Family

Donor advised funds offer a great deal of flexibility to meet your giving goals. They also can lay the foundation for multi-generational giving, providing a vehicle for your heirs to continue the family’s charitable legacy into the future.

You can recommend distributions from your fund every year to nonprofit organizations locally or across the country. Your distributions can support the same organizations each year, or you can vary who you’re supporting.

Some people choose to make selecting which organizations to support a family endeavor, sharing their values and their philanthropic vision with their children and grandchildren. You also can name a successor advisor (or advisors) to your fund, allowing future generations to carry on your family’s giving.

3. Give Through Your IRA

Anyone age 701/2 or older may receive qualified charitable distribution treatment for certain transfers of up to $105,000 from their IRA directly to a qualified charity (or to a qualifying fund at that charity). Transfers qualifying as QCDs are not included in your taxable income and reduce the balance of your retirement account (on which you and your heirs will ultimately pay tax).

While contributions to a donor advised fund typically do not qualify for QCD treatment, contributions to other types of funds at MCF (for example, nonprofit endowment funds, field of interest funds, donor designated funds, MCF’s Community Impact or Priority funds) may qualify.

NOTE: Before making a transfer from your IRA to a qualified charity, be sure to confirm with your advisor that the transfer meets the requirements to be treated as a QCD. Certain transfers, such as those from an ongoing SEP or SIMPLE IRA, typically do not qualify as QCDs.

4. Maximize Impact With a Legacy Gift

Pairing an estate gift with your lifetime giving can maximize your charitable impact. Your advisor can help you structure the best plan for your circumstances.

Some strategies to consider include:

  • Using a beneficiary designation in your retirement plan. Funding your giving with retirement plan assets and using other assets for bequests can benefit your children or other heirs. How? Because retirement plan proceeds are subject to taxes if left to your heirs, but pass tax-free to a nonprofit like MCF.
  • Using a beneficiary designation in your life insurance policy. Using life insurance to fund your giving can be as simple as naming MCF as the policy's beneficiary.
  • Making a bequest in your will. You can support your giving by making a bequest of an outright dollar amount, a percentage of your estate, or the residue of your estate (the amount remaining after bequests to your heirs have been fulfilled).

MCF’s philanthropic advisors are available to help you explore a wide range of options for achieving your giving goals during your lifetime and through your estate. Blending both techniques can allow you to enjoy the benefits of giving now while also ensuring a legacy of support for the causes you value.

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