Madison Public Library Foundation often receives calls or emails, asking about the best ways to give in support of the library. The end of the year is when the foundation receives the most donations, so we asked some of our donors to share their stories about how they give. In some cases, there are tax or financial benefits to the donor.
Giving from IRA Required Minimum Distribution
Eve Galanter discovered four years ago that she could make contributions to Madison Public Library Foundation through her required minimum distribution (RMD) from her individual retirement account (IRA).
IRS rules mandate that individuals age 70-1/2 and older take RMDs from their IRA each year, regardless of whether the income is needed. These annual withdrawals are subject to ordinary income taxes. By making a charitable contribution from an IRA, the individual can satisfy the RMD amount without reporting additional income.
Galanter inquired about the process for making the transfer of funds and found out that it was incredibly easy, she said. She chose a specific amount, then the funds went directly from her IRA to the foundation. “I never received them so they were not taxable income to me,” she said. “And at the end of the year, it was just a very simple process benefiting both the charitable organizations of my choice, as well as me, because this was not taxable income.”
Donation of Appreciated Stock
Like many others, we make cash donations to various community groups throughout the year. But there are a few organizations, such as Madison Public Library Foundation, that receive more substantial gifts. The easiest, and most thrifty, way to do this is by donating appreciated stock. Most important, a stock transfer maximizes the amount of our donation to the library foundation.
When we choose a stock or fund that has appreciated, the full value goes to the foundation. That full value is a charitable tax deduction for us. The original cost of appreciated stock — our basis — is a fraction of the current value, so our original investment cost is substantially less than today’s appreciated value.
The foundation makes the stock donation process especially simple. Stock donations are transferred to a foundation “pass-through” fund at Madison Community Foundation. The full value of the stock gift is immediately directed to Madison Public Library Foundation. Everyone receives prompt notification of the final value of the transaction. It couldn’t be easier.
— Al Friedman & Susan Tikalsky
— Al Friedman & Susan Tikalsky
Charitable Gift Annuity
When one of the foundation’s donors made her estate plan, she decided to set up a charitable gift annuity to provide herself with an income stream while also supporting one of her favorite causes. When the donor — who requested to be anonymous — recently passed away, her charitable gift annuity resulted in $33,000 toward the foundation’s endowment fund.
A charitable gift annuity allows the donor to receive fixed, supplemental income payments each year until his or her death, at which time the income transitions to a charitable endowment — in this case, the foundation. A charitable gift annuity also provides a tax deduction for the total gift amount in the year the gift is made, and each year thereafter.
Year-End Gifts Qualify for Match
Younger donors and those who do not own stock can always make a one-time year-end gift to the foundation in the amount of their choice. The foundation recently received an anonymous matching gift of $50,000, which means that every gift made from now until Dec. 31 will double!
To learn more about ways to give, contact the foundation at 608.266.6318, email Dayna Long at firstname.lastname@example.org, or visit our Ways to Give page.