Situations Where We Can Help Professional Advisors
The Cleveland Foundation will work closely with you to tailor solutions for your clients that meet their charitable giving needs, offer the maximum charitable tax deductions, and provide many ways to incorporate charitable giving into their estate plans. Here are examples of how we can work with you for the best possible outcome.
Closely Held Business Owners
Scenario: Your client’s personal net worth is tied up in a closely held company, but he wants to find a way to support programs and activities in his community.
Solution: Donate a portion of his company’s stock to the Cleveland Foundation to establish a fund. The company, or current stockholders, may buy back the stock over time, which will add to the fund.
Benefit to Client: He earns an income tax deduction for the fair market value of the appreciated stock, while control of the company stays with known parties.
Liquidity Events
Scenario: Your client earns a large year-end bonus or commission, sells a business, receives an inheritance, etc. She likes the idea of making a long-term donation to organizations or institutions in her community, but wants to take her time in deciding which charities to benefit rather than rushing to make decisions before the end of the tax year.
Solution: Create a fund with the Cleveland Foundation.
Benefit to Client: She earns an immediate tax deduction, gains access to the Cleveland Foundation’s professional grantmaking staff for suggestions, and provides ongoing support for causes she cares about – on her own timetable.
Family Dynamics
Scenario: Your client has more than enough assets to provide amply for her children, who are financially successful in their own right. She doesn’t want to “spoil” her children or grandchildren.
Solution: Establish a fund at the Cleveland Foundation in the name of the family for a purpose that is meaningful to the family. If the adult children are local, a donor-advised fund may bring them together to recommend grants.
Benefit to the Client: They know their gift will sustain the family name and has the potential to pass on philanthropic values to successive generations.
Philanthropy in the Estate Planning Process
Scenario: Your client has gotten “stuck” in estate planning, and you suspect that it’s because thinking about the end of life is simply hard for her, as it is for many people.
Solution: Give the client something positive to think about, like sustaining a valued institution or helping others.
Benefit to Client: Focusing on something future-oriented – like a legacy to the community – creates a sense of personal satisfaction that may be enough to create a sense of closure in the estate planning process.
Preserve Resources
Scenario: Your client has always been generous in her charitable giving, but, as she’s aged, she has grown more anxious about ensuring that her resources last long enough to provide for her needs.
Solution: A charitable gift annuity or charitable remainder trust will generates lifetime income.
Benefit to Client: She earns an immediate tax deduction and the assurance of a predictable income stream.
No Children to Inherit
Scenario: Your client does not have children and has more than enough in his estate to appropriately remember special loved ones.
Solution: A fund at the Cleveland Foundation will preserve your client’s legacy and allow for a charitable deduction, reducing estate taxes.
Benefit to the Client: Your client can create a lasting legacy in his or her community, saving taxes at the same time
How Do I Help My Clients Decide?
Your clients have a number of options when it comes to their charitable giving. Our staff will work closely with you to identify a charitable giving solution that meets their needs.
Charitable Giving Scenarios
| Client Goals | Actions | Benefits |
|---|---|---|
| Make a quick and easy gift | Contribute a gift in cash or by check | An income tax deduction and immediate benefit for the community |
| Make a gift with other existing sources | Example: Donate a life insurance policy that is no longer needed | Current and possible future income tax deductions |
| Defer a gift until after their lifetime | Bequeath cash, property, or a portion of their estate | An estate tax deduction |
| Make a gift while minimizing the impact on taxes and capital gains | Contribute long-term appreciated stock or other securities | A charitable deduction that may reduce capital gains tax |
| Minimize the two-fold taxation on IRA or other employee benefit plans | Designate a fund at the foundation as one of their beneficiaries | May reduce tax liability on assets left to heirs |
| Direct a charitable gift from an IRA during lifetime to reduce taxable income and achieve other tax advantages. | Make a Qualified Charitable Distribution (QCD) to a qualified charity (e.g., to a named fund) from a traditional IRA. Available to donors age 70½ and older. | A QCD may be excluded from the donor’s taxable income (up to $100,000 annually) and count toward the donor’s Required Minimum Distribution (RMD), when applicable. Benefits even people who don’t itemize for tax purposes. |
| Secure a fixed payment stream and make a gift to benefit charity | Create a charitable gift annuity | Tax benefits and fixed payments for life |
| Receive income today while creating a permanent philanthropic legacy for the future | Create a charitable remainder trust that pays income to the client during his or her lifetime for a designated time period | At maturity, assets benefit a fund to meet important community needs chosen by the client |