Professional Advisors

Start the Conversation

Your clients rely on you to guide them through the dizzying maze of tax management and estate planning. Ask them a simple question about charitable giving, and Incourage can help you deliver good answers. We have flexible options to meet their charitable goals. Below are tips that focus on key situations in which a conversation about charitable giving would be beneficial.

And here are some of the ways that Incourage can help you and your client:

  • Presentations for your clients
  • Illustrations of charitable giving options, fund advantages, tax benefits
  • How to define charitable interests and giving strategies
  • Overview of local community needs and issues
  • Private Foundation/Community Foundation comparison
  • Transferring a private foundation to Incourage
  • Donor stories and examples of Incourage’s impact
  • Lending library of charitable giving resources
  • Sample bequest language
  • Continuing education for advisors

A client without children or descendants

If you have a client who do not have children or descendants, or does not want to provide in their estates for children or descendants, charitable giving is an important issue to address. If they do not know exactly which charity they want to support, or if they want to create a lasting legacy that will benefit the community in perpetuity, Incourage is a great choice for them.

Loss of a loved one

Your client has lost a loved one and wants to do something in their memory, but is not sure what to do. Incourage can help you and your client set up a fund in memory of or in honor of their loved one. We work with your client to determine what type of fund (donor advised, designated, field of interest, etc.) would most closely fit to honor their loved one.

Client wants to start a charity

Your client comes to you to create a charity or private foundation. They are passionate about helping the less fortunate or finding a cure for an affliction. They also have a full time job and/or a family. Incourage can help your client establish a donor advised fund or field of interest fund that will support the cause or charities they would like to support without the hassles of running their own organization.

Sale of a business/other major assets

Your client comes to you ready to sell their business. The sale will create a large tax and they would like your advice on ways to offset the tax liability. Incourage can help your client avoid some of their tax liability by accepting a gift of a partial interest in their business. Your clients may be eligible for a tax deduction and when Incourage sells the interest in the business, there is no income tax or capital gain tax on the proceeds. Your client then can establish a fund with the proceeds from the sale.

Closely held family business interest

Your clients have a closely held family business. They do not have a large amount of liquid assets but are charitably inclined and would like to leverage the value in their business to make charitable contributions. Incourage can work with you and your client to accept the closely held business interest and set up a liquidation schedule for the interest. As the interest in the business held by Incourage is liquidated, the donor has liquid assets in their fund, which can be used to meet their charitable goals.

Desire to teach family members about philanthropy

Your client comes to you with the desire to make sure that their children and grandchildren understand philanthropy. We can help educate your client through our various publications and expert resources on family philanthropy and by working directly with you and your client to set up the best vehicle for their family.

Start with a simple question

Call on our Donor Services staff to learn more. The best way to get a conversation going with your clients is to ask, “What are your charitable giving goals?” or “What gift would you like to leave for your community?”

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Private Foundation/Community Foundation comparison:
ten reasons to set up a fund

  1. A fund is easy and inexpensive to establish. A private foundation requires a donor to create a new organization, apply for tax-exempt status, pay filing fees and incur legal and accounting expenses.
  2. A gift of cash to a charitable fund allows a deduction of up to 50% of a donor’s Adjusted Gross Income (AGI). A gift of cash to a private foundation allows a donor to deduct up to 30% of AGI.
  3. By creating a charitable fund, a donor may deduct gifts of closely held long-term appreciated stock at its fair market value, up to 30% of AGI. If the same gift is given to a private foundation, deductibility may be limited to its cost basis up to 20% of AGI.
  4. No tax is imposed on the investment income of a charitable fund because it is a component of a public charity. A private foundation pays up to 2% federal excise tax on its investment income and net realized capital gain.
  5. A community foundation donor may remain anonymous. A private foundation must make available to the public the name and address of any substantial contributor.
  6. There are no minimum distribution requirements for a charitable fund at a community foundation. A private foundation must annually distribute at least 5% of its net investment assets, regardless of whether the amount is actually earned.
  7. There are fewer restrictions on a charitable fund. For private foundations, however, there are strict regulations regarding self-dealing between the foundation and those who manage, control, or contribute to it and persons or corporations closely related to them. For example, a private foundation, along with its donor and other “disqualified persons” (including members of the board and staff), may not hold more than 20% of a related corporation’s voting stock.
  8. There are fewer investment restrictions on a community foundation’s funds. A private foundation may not make certain types of investments. For example, a community foundation may hold more than a 20% ownership in a particular corporation, but private foundations may not.
  9. There are fewer IRS reporting requirements on community foundation grants and funds, and requirements that do exist are handled by the foundation’s staff at no extra charge to individual donors.
  10. Charitable gifts to a community foundation fund are almost always considered “public support,” thus helping the recipient charity retain its public charity status. A private foundation grant is usually not considered “public support” in its entirety and, thus, may not be as helpful to the recipient charity in retaining its public charity status.

Downloads to Help You Start the Conversation

We’re available to help you with all aspects of your giving experience. If you have questions about becoming a donor or establishing a new fund, please contact us at: [email protected] | 715.423.3863

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