A monthly newsletter for our region's trusted financial and legal advisors, by the Community Foundation of Grand Forks, East Grand Forks & Region.

Spring greetings from the Community Foundation!

Every day, our team appreciates the opportunity to work with attorneys, accountants, financial advisors, and other professionals who are helping clients achieve their charitable goals. We know your relationships with your clients are in many cases very personal, and you take your responsibilities seriously. We respect that, and our team strives to do everything we can to help you structure charitable giving plans to meet your clients’ needs.

To help keep the Community Foundation’s resources at your fingertips, we’re covering 3 trending topics:

• Last November, the Treasury released proposed regulations related to donor-advised funds. Although these proposed regulations are just that – proposed and not final – nevertheless, in recent weeks the media coverage has gained momentum, especially now that Ways and Means members have weighed in. The Community Foundation is on top of the issues, and our team is always ready to share the latest insights.
  
• Following every tax season, many advisors share with our team at the Community Foundation that they wish they’d been aware of the many asset types that make great gifts to a fund at the Community Foundation. We’re happy to provide a list of the wide range of property that your clients can deploy to meet both their tax goals and their charitable goals.
  
• Election-year dynamics are on your clients’ minds, and we’re sharing a few items of recommended reading to provide perspective on political contributions’ impact on charitable giving, as well as articles that you and your clients might find useful related to “check out charity” trends and legal issues that may confront clients who serve on charities’ boards of directors. 
  

Thank you for the opportunity to work together!

Becca Baumbach
​Executive Director

Stay up-to-date on benefits, opportunities, and changes that may impact your clients.

Endowments are a sustainable forever gift that generally qualify for a deduction on both your federal and state income tax return. Many donors choose to establish or add to existing endowment funds to provide a vital base source of funding that may allow a benefitting organization to carry on, even in lean years.

ND State Tax Credit for Endowment Gifts

If your clients are North Dakota taxpayers, they may be eligible to claim a credit of 40% on a minimum donation of $5,000 to a qualified endowment at the Community Foundation through the North Dakota Charitable Income Tax Credit. This is on top of the savings they receive on their federal tax return by itemizing their qualifying charitable donations. By taking advantage of both the state tax credit and the federal tax deduction, your clients can significantly lower the net cost of their contribution and triple its impact.

All of the Community Foundation's endowment funds qualify for this tax credit!

Individuals may receive a state tax credit for a contribution for $5,000 or more (lump sum or aggregate in one year) to a qualified North Dakota endowment. The tax credit is 40% of the charitable deduction allowed by the IRS up to a maximum credit of $10,000 per year per taxpayer or $20,000 per year per couple filing jointly. Effective for taxable years starting in 2011.

Example: Mr. Jones, a North Dakota resident, donates $20,000 in cash to an endowment fund at the Community Foundation. He receives an $8,000 tax credit (40%) on his North Dakota return. If he is in the 28% federal tax bracket, his federal tax savings is $3,360 (28% of $12,000). The "cost" of his $20,000 gift is offset by $11,360 in tax savings.

Businesses (C corporations, S corporations, estates, limited liability companies, trusts, and financial institutions) that pay ND income tax may take a 40% credit up to a total of $10,000 for gifts to the qualified endowment fund of a qualified North Dakota charity. Effective for taxable years starting in 2011.

In all of the above, the credit may be carried forward for 3 additional tax years if it cannot all be used in one year.

COMMUNITY FOUNDATION HOURS
Our office is open Monday through Thursday from 10am to 4pm. Meetings are by appointment. We keep remote hours on Fridays from 10am to 4pm and are available by phone and email.

This newsletter as well as any referenced materials are provided for informational purposes only. They are not intended as legal, accounting, or financial planning advice.