How to Leverage Your Gift

Savvy donors often look for ways to use their giving as a means to unlock more gifts from others. It's a way to leverage their gifts in order to make an even greater impact on your Owen County Community Foundation and our communities. Here are three leveraging "secrets" you may want to consider as you plan your giving – and a bonus one.

 

Create a Matching Fund –

A typical strategy is to make an outright gift of a certain amount to go toward a specific project or campaign goal. The donor offers an additional amount to match funds toward the same goal, up to a given level. 

 

For example, Mrs. X gives $10,000 to renovate a building and pledges an additional $10,000 as matching funds to be given if and when additional funds are raised. This appeals to other

donors because it allows them to effectively "double" the value of their own gifts.

 

We currently have a donor that is using her own match offer within a donor group to encourage more giving from the group. This approach works. Give us a call if you would like to know more.

 

Establish an Endowment Fund –

OCCF endowments are protected funds set aside to provide a perpetual flow of income for local charitable projects. Once created, they remain in perpetuity. Only the net earnings, or a portion thereof, are used to meet the purposes of the fund, whether operations, special projects, program enhancements, or whatever.

 

By establishing such a fund, the donor creates a special place where donors with similar interests can deposit their gifts.

 

For example, Mr. and Mrs. Y have a special interest in research and they establish an endowment to provide resources for various research projects. As word travels about this new fund, others who are also interested in research are inclined to support the endowment.

 

The appeal of the endowment can be further enhanced by naming it after a person of wide influence, perhaps someone related to OCCF. Uninvolved family members will now have a reason to contribute to OCCF through this endowment. In short, a well-constructed endowment can significantly leverage one's initial gift.

 

Make a Tax-wise Gift –

The easiest way to leverage your gift to your OCCF is to maximize the tax benefits. This will allow you to give more than you would be able to give otherwise. Consider, for example, Mr. Z. Instead of selling shares of appreciated stock, paying capital gains tax on the appreciation, and making a gift of the remainder, he gives the shares directly to your OCCF.

 

Since OCCF is a qualified charitable organization, it can sell the shares and keep the full amount -- no tax due. Mr. Z receives credit for the full amount of the gift and can apply it as an income tax charitable deduction on his annual itemized tax return.

 

With recent changes to the tax code, many donors are finding that after they’ve reached the age of 70 and ½ years old, making gifts directly from their individual retirement account (IRA) as a charitable rollover allows a tax advantage. The charitable IRA rollover allows a donor to have the caretaker of their investment account to transfer funds directly to a qualified charity like the OCCF. This rollover counts towards the IRA holder’s annual required minimum distribution and yet does not result in any income tax to the donor.

 

In the case of an IRA rollover, the donor does not receive a charitable deduction but avoids the tax on the amount that goes directly to the charity. IRA charitable rollovers have become much more popular in the last couple of years because of the leverage it allows donors.

 

Bonus Leverage Tip –

We currently have a match offer from Lilly Endowment Inc to provide a $2 match for each $1 of giving to a unrestricted fund here at your OCCF. Unrestricted funds are those that are created for the general good of our communities and not designated for any special purpose. This leveraging match offer is good up until December 31, 2020 or as long as the matching gift lasts.

 

There are other ways to leverage your giving to your Owen County Community Foundation, so if you would like to learn more, give me a call at 812-829-1725, email me at mark@owencountycf.org, visit us online at www.owencountycf.org, or stop by and visit us in person at our office on the south side of the Courthouse Square in Spencer at 60 E. Market Street.

 

Your Owen County Community Foundation is committed to helping our communities become better places to live, grow, and work. We value community involvement and a charitable spirit.