BUSINESS PLANNING & PHILANTHROPY WITH THE CATHOLIC FOUNDATION
The Catholic Foundation manages over 900 funds and over $150 million in assets. The Foundation is well equipped to accept gifts in any form, including cash, buildings, real estate and personal property. The Catholic Foundation also accepts gifts of stock, including gifts of stock from a closely held business. In fact, The Catholic Foundation has a trust form, which places it in a strategic advantage to accept S-Corporation stock.
THE CATHOLIC FOUNDATION CAN ASSIST YOU AND YOUR BUSINESS:
- Serving as the business’s philanthropic administrator, which would allow the business to rely on The Foundation’s expertise and resources.
- Administering a business’s philanthropic supporting organization or managing a donor advised fund for a business to allow it to engage in a comprehensive philanthropic initiative. This initiative would allow business owners and employees to participate in the philanthropy. And, with a donor advised fund, the business can donate anonymously.
- Helping a business achieve its philanthropic goals as it undergoes a liquidation event.
- Sponsoring business philanthropy seminars, which (1) provide educational opportunities such as incorporating charitable giving as part of a business’s tax and succession planning, and (2) provide information on charitable planning tools such as donor advised funds, endowment funds, trusts, and charitable gift annuities.
- Allowing businesses to take advantage of The Catholic Foundation’s partnership with Conway Center for Family Business, which provides additional philanthropic resources.
WE ASK YOU TO CONSIDER THESE QUESTIONS:
Have you spoken with your loved ones about what is important to you? No matter your age or stage of life, the time is always right to voice your plans, intentions, wishes, hopes, and dreams. Share your prayers with them.
Do you have an inventory of your non-cash assets? Understand your net worth including appreciated stock; real estate; business interests; personal property like artwork, royalties, copyrights, patents; valuable collectibles; and, other alternative assets like life insurance policies, retirement benefits and accounts, negotiable instruments, oil and gas interests, and private equity.
Have you made your estate plan? We have not met anyone who doesn’t have an estate. Make sure you have documented your end-of-life wishes; to whom, how and when you want your assets to transfer to loved ones, beneficiaries, your parish, and favorite charities. Understand how varied assets transfer differently to heirs, beneficiaries, and charities like your parish. For example, insurance proceeds can pass tax free to your beneficiaries, while retirement accounts can pass with a heavy tax burden.
Have you considered charitable planning tools that fit your needs? The Catholic Foundation executes Endowment & Scholarship Funds; Donor Advised Funds; Charitable Gift Annuities; Charitable Remainder Trusts; and Charitable Lead Trusts. Additionally, insurance policies are a wonderful way to amplify your charitable giving.
BUSINESSES CAN TAKE ADVANTAGE OF TAX SAVINGS:
A Partnership is a flow through entity in which net income earned is passed to each partner in direct relationship to the partners’ ownership interest percentage. As a flow through entity, the partnership does not pay taxes and thus has no tax savings from charitable contributions made. Charitable contributions made from a partnership are viewed as a reduction in each partner’s basis in the firm and are allocated to each partner’s equity account in relation to their ownership percentage. Each partner’s charitable contributions are reported to them annually on form K-1. These contributions are added to the amount of charitable contributions that the partner has made individually and are subject to the applicable limitations.
Partnerships may want to consider making charitable contributions in years of financial success in order to mitigate the impact of their results on each partner’s personal tax return.
S-Corporations pass profits and losses through to its owners in direct proportion to their ownership interest. Like a partnership, they also report profits, losses and charitable contributions to owners using form K-1. One restriction on S-Corporations is that total contributions are limited to 50% of the S-Corporation’s AGI. Donations of real property, however, are limited to 30% of the S-Corporation’s AGI.
Charitable contributions made by C-Corporations have the effect of reducing corporate taxable income, but are limited to 10% of taxable income per year. Unused charitable contributions are eligible to be carried forward for five years.
THERE ARE MULTIPLE BENEFITS TO PHILANTHROPIC ENGAGEMENT:
- Philanthropy creates a common bond for the business owners, employees, stakeholders, and retirees.
- Business philanthropy can be used to engage and motivate successor owners and leaders.
- Business philanthropy can be useful for recruiting and retaining employees.
- Business philanthropy strengthens the relationship between the business and the community.
- Business philanthropy is considered a sign of success and a demonstration of character.
You have visited the land and watered it. Greatly have you enriched it.
For more information, visit www.catholicfoundationgiving.org