Eight Popular Ways to Give to Charity

According to National Philanthropic Trust, 69% of all charitable gifts in 2020 were from individuals. In 2020 six out of ten (or 60%) of American households participated in some sort of charitable giving, according to The Philanthropy Roundtable.  We are a generous country.

Giving to charity can be very satisfying when it compliments your goals.  Fortunately, there are many
options to choose from when making a charitable gift. Here are eight of the most popular methods:

  • Cash

    The most familiar type of gift is cash. Española Humane is pleased to accept checks or cash in any amount. Outright gifts of cash are fully deductible for federal income-tax purposes..

  • Securities

    We also accept gifts of publicly traded stocks, bonds, and mutual funds at fair-market value as determined by the IRS. A gift of appreciated stock held for more than a year offers you a three- fold tax savings. First, you avoid paying long-term capital gains tax on the increase in value of the stock. Second, you receive an income tax deduction for the fair-market value of the stock on the date of the gift. Finally, the stock will not be included in your estate and not subject to estate tax.

  • Real Estate

    Whether it’s the family home, undeveloped land, or rental property, real estate held for more than a year may be the most appreciated asset you own. This means you could face significant capital gains taxes if you sell. When gifting real estate, you can take a charitable deduction of the fair- market value of the property. You also give up to 20% more because you avoid capital gains tax on the profit that would have been taxed if the property was sold and proceeds donated to charity.

  • CGAs

    Charitable gift annuities are a good option if you want to make a significant gift while still benefitting from income. You would give an irrevocable gift of cash or securities to Española Humane in exchange for a fixed income payment for a set term or for life. Some donors choose to defer annuity payments until retirement, resulting in higher payments. Regardless, you can take an immediate tax deduction while Española Humane invests and grows the funds, keeping whatever is leftover when the annuity term is up.

  • Retirement Plan Assets

    Using IRAs and other retirement plan assets provides you with significant financial and tax advantages. Unlike many assets, retirement plans may be subject to both income and estate taxes. Naming Española Humane as the beneficiary of a retirement plan (including IRAs, 401(k)s and profit-sharing plans) can eliminate estate and income taxes, if the gift is structured properly.

  • Charitable Trusts

    Charitable trusts are best if you want to make a gift while still enjoying an income from your assets. Or if you are subject to paying capital gains taxes on appreciated assets. When you contribute to a charitable trust, you receive income based on a fixed percentage of either the annual fair market value of the trust or the amount of the initial assets used to fund the trust. At the end of the trust’s term, the remaining balance goes to Española Humane.

  • Bequests by Will or Trust

    Bequests are a simple, impactful, and popular way to make a planned gift. To make a charitable bequest, you allocate a portion of your estate to Española Humane in your will. Assets can be allocated by specifying an amount of cash, a percentage of your total estate, or by a residual bequest. A residual bequest directs the remainder of your estate to Española Humane, after all other provisions in the will or trust are satisfied and all estate administrative costs are paid.

  • Beneficiary Designation

    If donating income-earning assets is a concern, consider making a charitable gift via a beneficiary designation. You can designate Española Humane as the beneficiary of all or a portion of various assets (i.e., retirement accounts, life insurance, annuities, etc.). Such beneficiary designations are revocable and may be changed at any time during your lifetime.

    Donating from a tax-deferred retirement account is an advantage because Española Humane does not pay income tax. This means the full amount of your donation will avoid income tax and directly benefit homeless animals.

By Frank Stepp

Executive Vice President
Thompson & Associates