There's no way around it. Ministries today are dealing with the downturn in the economy, just like everyone else. Built on the support of profitable businesses in an era that helped tax liability, the 501 (c) 3 class of non-profits is feeling the pinch. Profits are down which means giving is down, and rightfully so.
I was talking with some friends of mine the other day about different ways people can still get tax relief here at the end of the year by supporting their favorite ministries. Check this out!
Say you were given Apple Stock by your grandfather. When he bought it, it was 3.00 a share. Now it has split four times, and is trading at 300.00 a share. You might think, "I'm RICH! All I have to do is sell the stock and buy a home in Tahiti." Hold on.
According to the IRS, you'll have to pay the capital gains tax on those shares equal to the appreciation of the stock. In other words, you will have just added 297.00 (plus the sum of four splits) to your taxable income. Depending on how many shares you sell, and what tax bracket you're in, that could be a tax bill of almost $100.00 a share. There's a lot of money going out the door, and some people can't afford to pay the tax bill on their large appreciated asset.
But, What if you donated that same amount to your favorite non-profit?
If you donate the 300.00 shares you can claim the ENTIRE amount as charitable giving. So, instead of adding 297.00 to your taxable income, you can deduct the total 300.00 as charitable deductions. The non-profit can sell the stock without paying the taxes on the asset, and you can reduce your taxable income by the same amount.
In an era that has seen the stock market go from 6000 to almost 11,300, I know there are people out there that have valuable assetts sitting around without the ability to sell them, because they would have to pay an incredible amount of taxes just to sell it.
It's a "WIN/WIN." If you gift the stock, the donor gets the total value of the stock against their taxes, and the non-profit gets the asset to fuel their mission. It's a great way to move both parties down the road to achieve their financial goals.
Of course we would love to continue to support KIVU, but there are a variety of ministries out there that you can help. I know there are churches, NGO's, childcare, and health care non-profits really hurting today. If you fit into this category, spend some time thinking about where you might be called to lock arms and help out.
We all know it's tough to function in this economy, but there are ways to work inside the American system to provide for companies reliant on a good economy.
I just saw an article in USA today talking about this very program. Click Here for the article.
(Feel free to pass this on to your friends that might be in a position to gift stock.)