Charitable Trends, Local Partners
Recently, the Topeka Community Foundation hosted Bryan Clontz, PhD, CFP, CLU, ChFC, to provide training for local professional advisors on charitable trends in financial and estate planning. His presentation covered topics from nonprofit competition and generational giving patterns to IRA contributions and life insurance policies. How can local financial advisors, estate attorneys, and other professionals turn these national trends into unique, thoughtful plans for their clients?
The Topeka Community Foundation partners with advisors and their clients to build charitable giving into their financial goals.
Below are some examples of what that looks like in practice.
Retirement Planning
Qualified Charitable Distributions (QCDs) are a popular vehicle for individuals over 70 1/2 years to manage the Required Minimum Distributions (RMD) from an IRA - and avoid the negative tax consequences if they don’t want or need the funds as income in a given year.
How does it work? Individuals can fulfill their required minimum distribution with a direct rollover to a charity, or a charitable fund. Up to $111,000 can be transferred without increasing taxable income.
Is there a catch? QCDs cannot contribute to a Donor Advised Fund. Fortunately, the Topeka Community Foundation has a variety of fund types that are allowed, such as scholarship funds and field of interest funds.
For Example
Consider a retired couple, age 70, with IRAs. At age 73, they will be required to take an RMD. Starting at age 70 1/2, they can choose to transfer money from their IRA into a scholarship fund at the Topeka Community Foundation. With a minimum of $10,000 needed to establish the fund, one or two annual QCDs can help fund scholarships for several local students. Donors have the ability for their scholarship to be awarded based on specific criteria, such as schools, areas of study and sports or extracurriculars.
Advisor Managed Funds
The Topeka Community Foundation manages more than 400 charitable funds. But did you know that we also work with donors who have their charitable fund managed by their trusted financial advisor?
How does it work? External, or advisor-managed funds are a true partnership: the advisor retains management of the portfolio and provides trusted investment guidance. The Foundation provides expertise on community needs and tax advantages while handling the administration, due diligence and grantmaking process. The donor submits grant requests to the Foundation to make contributions to the causes and organizations that matter to them.
Is there a catch? Advisor-managed funds must meet a minimum balance. Interested in learning more? Contact us today!
For Example
A couple has accumulated appreciated stock over many years. They would like to reduce taxes from an upcoming sale of assets, support causes they care about, and involve their children in family philanthropy.
Working with their financial advisor, they establish a $100,000 donor advised fund at the Foundation using appreciated securities. The contribution may provide valuable tax benefits, while the advisor continues managing the assets within the fund according to the client’s goals and the Foundation’s investment policies. Over time, the couple recommends grants from the fund to organizations they support. As their children become involved, they have meaningful conversations about their values and the legacy they hope to build.
Estate Planning
When people think about their legacy, they think about their family’s future. But many people also want to make a lasting difference in the community that helped shape their lives. Enter: Legacy Planning
How does it work? Most people leave an estate when they die. An estate is any property, money or personal belongings owned at the time of death. Anyone can arrange to leave a charitable gift from their estate by adding a simple provision in their will.
Why partner with the Topeka Community Foundation? The Foundation offers philanthropic expertise to ensure donors’ wishes are carried out and maximize the tax benefits of each unique legacy giving plan.
For Example
One question we recommend that financial and estate planning professionals ask clients is, “Do you donate to any organizations or causes?” Consider a client who makes an annual donation to a children’s organization. They can designate a gift or portion of their estate to the Topeka Community Foundation, and a fund can be established that continues contributing to that organization long after the donor’s death.
Foundation staff work with advisors and their clients to define their charitable goals, determine the best giving method based on assets and tax benefits available and provide exceptional financial stewardship of funds. Contact us today to start the conversation.