Using Real Estate as an Engine for Charitable Giving
Do you love supporting charities but want to be strategic about your cash giving? Giving an asset, like real estate, may be a tax-effective way for you to fund your giving dreams without depleting your cash.
Many real estate investors have the heart to give charitably but feel hindered by a limited cash flow and daunted by the growing taxation of their investments. If you are among them, you might be able to turn your valuable property into food for the hungry, research to fight a disease, shelter for the homeless, funding for your church, or for any other cause you’re passionate about.
Considering a Sale?
The demand for real estate in Michigan has driven your property value higher than ever before, and it keeps rising. As a property owner, you’ve probably thought about selling to capitalize on the market.
You want to be smart about a potential sale, but you’re concerned about sacrificing a huge portion of your investments to potential capital gains taxes. If you are used to giving cash to charity, now may be the time to consider funding your giving with real estate.
Whether you’re an industrial, commercial, or residential income property owner, one giving strategy you could utilize is donating interests in appreciated real estate (raw land, residential, or commercial real estate) to a charity prior to reaching an agreement to sell.
This strategy potentially avoids capital gains taxes on the gifted portion, likely getting you an income tax deduction for the fair market value of the gift and freeing up additional cash flow for more giving.
Using a Donor-Advised Fund
Many givers utilize a donor-advised fund to execute this giving strategy. A donor-advised fund is a low-cost, flexible account for charitable giving that is a popular alternative to creating a private foundation. It’s the fastest-growing charitable vehicle in America today.
Below is an example of how property owners have been able to donate real estate investments to fund their giving through a donor-advised fund (“Giving Fund”) provided by the National Christian Foundation (“NCF”), a non-profit that helps givers mobilize resources.
Download this quick guide to giving real estate provided by the National Christian Foundation.
Many property managers have the heart to give charitably, but they’re not interested in selling right now and don’t look forward to the large tax bill when they eventually do.
You may be able to gift real estate (commercial real estate, rental income property, etc.) into a donor-advised fund while continuing to manage the property, now with the goal of maximizing charitable granting. This strategy reduces income taxes and creates charitable cash flow, allowing you to give more.
Your income-producing real estate can become a charity dollars-producing investment by giving through a donor-advised fund.
Learn more at the Lunch and Learn
Mark your calendar to learn more about how you can use real estate as an engine for your charitable giving at our upcoming FREE lunch and learn event October 7 from 12 -1pm (lunch provided). Click here to register.
- What: Evaluation of the unique opportunities available when giving assets instead of cash
- Why: Why is real estate such a compelling and strategic gift choice?
- How: The considerations and process of giving real estate assets
- Examples: Stories about two property owners who were able to give more than they ever imagined possible to the causes they love
- Q&A: What can real estate giving do for your unique situation?
What Are You Waiting For?
Your smart investments could start making a difference for the causes you’re passionate about today. Don’t wait and miss opportunities to give because you’re concerned about growing taxes or limited cash flow.
If you think real estate investment giving might be right for you, join our lunch and learn event Oct 7th or learn more now at www.ncfgiving.com/westmichigan.
National Christian Foundation West Michigan is a charitable giving ministry that provides innovative, tax-smart giving solutions for Christian families and their advisors. Together with our affiliates across the country, we’ve sent more than $13 billion in giver-recommended grants to 71,000 charities at work in disaster relief, adoption, homelessness, education, and countless other causes. firstname.lastname@example.org | (616) 957-4372