News & Event
Thoughts of year-end tax planning are a seasonal tradition as pervasive as the leaves turning color. As you consider your charitable priorities, your accountant may have already discussed the advantages of making a charitable gift of publicly-traded stock that has appreciated in value over time. For business owners, shareholders of privately held companies and real estate owners it is equally important to keep in mind that your noncash assets — such as real estate and privately held/closely held business interests— can be optimal donation candidates for savings taxes on capital gains.
Bryan K. Clontz, founder and president of Charitable Solutions, LLC, offers a seasoned perspective on the advantages of unlocking the tax savings of gifting privately held stock and/or real estate to a donor advised fund at Greater Cincinnati Foundation (GCF). Your GCF philanthropic advisor is happy to help you explore making gifts of non-cash assets. As always, we recommend that you explore the specifics of your personal giving strategy with your tax professional.
Assets other than cash are prime candidates for donations. The average donor has more wealth in illiquid, noncash assets than in cash and publicly-traded stocks. This can include property such as real estate and business interests, along with items like cryptocurrency, collectibles, mineral rights, artwork or intellectual property. Partnering with an experienced community foundation such as Greater Cincinnati Foundation (GCF) to unlock the value in these types of assets can be extremely favorable for both you as a donor and for the charities you wish to support.
Take the following examples of the opportunity for donating noncash assets:
This suggests that, for many charitable individuals, the best assets for donations are those other than cash and marketable securities.
These assets are often prime candidates for donation because they are highly appreciated, meaning that if the asset was sold, there would be significant capital gain. This presents an appealing proposition for donors and charities alike: donors can avoid paying capital gains taxes on the donated asset and charities receive property which has increased in value. Better still, donors can receive a significant tax deduction.
This strategy is particularly appealing under the 2017 tax law. With the new, higher standard deduction, “bunching” donations has become a more popular tactic, which means donating one or more high value assets. That allows donors to deduct the value of the property and potentially to still manage charitable giving through use of a donor advised fund.
This bunching strategy can work especially well with an appreciated non-cash asset. This tactic also means the donor is still holding the cash that they might otherwise have donated to meet their charitable goals. That added liquidity means flexibility that would be lost (relatively speaking) with a cash donation.
Below is a simple example of a donation of real estate:
Donor has a vacation home worth $1 million, which she bought many decades ago and has an adjusted basis of $0. If she were to sell the home, she would pay as much as $200,000 in federal capital gains taxes alone (plus possible state taxes). Instead, Donor could donate the real estate and allow the charity to sell the home. In that case, there is no federal capital gains tax. Assuming $75,000 of closing costs and brokerage fees in both cases, the amount going to charity if Donor sells is $725,000. If Donor instead gives the property to charity and the charity sells, the amount staying with the charity is $925,000. From a tax perspective, a cash donation of $725,000 means a deduction of $725,000. A donation of the home means a fair market value donation of $1,000,000.
Another example is a business interest donation:
A business owner (C-corp, S-corp, Limited Partnership, LLC, etc.) may be able to receive a fair market value deduction for a charitable donation. Often, this occurs prior to a merger/acquisition, new funding/investor round, IPO, ESOP sale or other partial or full exit. The tax benefits are similar to the real estate example above.
There are a few special considerations for donations of noncash assets (including any kind of illiquid asset, not just real estate and business interests):
The main takeaway for those who are charitably inclined should be that assets other than cash offer both opportunity and flexibility. As such, donors should always consider their illiquid assets in their tax and charitable planning. Working with an experienced community foundation such as GCF to make a charitable contribution using non-cash assets allows for potentially significant capital gains tax savings while creating charitable dollars for your donor advised fund. I encourage you to reach out to your tax planning professional as well as your philanthropic advisor at GCF to explore the benefits of making this type of gift to fuel your philanthropy.
CINCINNATI (April 25, 2018) — The Greater Cincinnati Foundation recently awarded $255,000 in grants to 17 local nonprofits to drive greater belonging, independence and authorship with and for people with disabilities. All grants awarded were made in partnership with GCF donors past and present.
GCF is hosting these organizations for a year-long learning journey and challenging them to seek collaborative solutions to maximize impact. In partnership with the nonprofit social innovation firm, Design Impact, organizations are participating in 1,334 hours of training and dialogue to change their approaches and learn from one another.
“The idea of a person with a disability fully belonging to their community, we have big barriers to that,” said Dan Connors, CEO, St. Joseph Home. “We need to think differently about how we’re going to solve this problem.”
The priorities for this funding cycle include strengthening partnerships, building a community of belonging and redefining the way things have always been done. The priorities were created in conjunction with the participating organizations. Each nonprofit received a $15,000 in support to test their innovative concepts as well as a series of trainings throughout the year.
“We’re always asked to show the efficacy of what we’re doing when we need funding,” said Rob Seideman, CTRH’s executive director. “So we rely on those things that we do well. But if we’re going to work with people in new ways, we need to change what we’re doing. And that’s what’s so great about this opportunity.”
More than $25,000 awarded in this grant cycle represent donor co-investments.
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“It is an honor to work side by side with these experts in their field who are so passionate about figuring out new ways to create even more meaningful lives for those they exist to serve,” said Molly Robertshaw, GCF program officer.
“This funding effort represents GCF’s interest in being a nimble and innovative partner for nonprofits,” said Ellen M. Katz, president/CEO. “We want to help our community to build a region where everyone can thrive.”
As the region’s leading community foundation, the Greater Cincinnati Foundation connects people with purpose in an eight-county region in Ohio, Kentucky and Indiana. GCF is leading the charge toward a more vibrant Greater Cincinnati for everyone – now, and for generations to come. As of 2017, GCF is the 35th largest U.S. community foundation with net assets of $636 million.
View full list of nonprofits receiving grants [PDF]
CINCINNATI (October 17, 2017) — NASA Astronaut, American Engineer, physician and STEM advocate Dr. Mae Jemison will be the next speaker for The Women’s Fund of The Greater Cincinnati Foundation’s A Conversation With event on Thursday, April 5, 2018, at the Cintas Center.
General admission tickets are $50 each and will go on sale in late January 2018. Host and hostess tickets are $250 each, include a private reception with Dr. Jemison, and are on sale now at www.cincinnatiwomensfund.org. Corporate sponsorship opportunities are also available.
Following her time in NASA, Dr. Jemison founded both The Jemison Group and BioSentient Corporation. A technology consulting firm, The Jemison Group explores and develops stand-alone science and technology programs, integrating the critical impact of socio-cultural issues with revolutionary technologies. Among The Jemison Group's groundbreaking work is a project to use satellite technology for health care delivery in West Africa and another to use solar dish Stirling engines for electricity generation in developing countries.
In addition to all her work, Dr. Jemison is a highly sought-after speaker on issues of health care, social responsibility, technology and motivation. She has appeared on BBC, The McNeil Lehrer Report, ABC Nightline, NPR and CNN.
The Women's Fund of The Greater Cincinnati Foundation leads our community in ensuring the economic self-sufficiency of women in our region. Through leadership, research, and policy advocacy, The Women’s Fund works to identify and address the barriers affecting working women and their families. Learn more and get involved at www.cincinnatiwomensfund.org.
When the Withrow Dental Center opened, it had a waiting list of 200 Withrow University High School students.
These students had dental pain and decay, as well as related social and self-esteem issues.
“I have a girl who is a senior, all six top and bottom front teeth have big cavities and holes,” said Dr. Emily Hudepohl. “She has prom coming up and graduation. I’m so glad we’re getting to her before she graduates. She’s thrilled.”
While the cosmetic factor is important to the students, the center also focuses on long-term oral health.
“We want to get their mouths healthy and then give them the idea that you see your dentist every six months,” Dr. Hudepohl said. “A lot of kids are in so much pain, they don’t want to see us, or they’ve had bad experiences. But honestly, a lot of the kids just haven’t had anyone show them how to take care of their teeth.”
This Cincinnati Health Department dental center is the ninth to serve populations where there is a void in services. Withrow serves about 30 students a day, including those from other schools. After school hours, Medicaid-eligible and uninsured individuals from the community have appointments. Students that visit the center can make it their dental home after graduation. The bright office, tucked into a corner of the high school, is a happy place. Students pop in and out just to say hello to the staff who have worked hard to be accessible and remove fears.
“I’m not a dentist person but when I first came here they were real nice and understood and made sure I was comfortable,” said senior Jannai Combs. “Now when I have a dentist appointment, I’m more excited to come.”
It’s also easier. For many parents, taking time off work for appointments isn’t an option. Previously, students were bussed to other centers or put on a waiting list. With the center at the school, students do not miss as much instructional time.
Through Generous Together, The Greater Cincinnati Foundation and its donors teamed up to help make the center a reality. Three GCF funds contributed to the Withrow Dental Center through Generous Together: Philip and Sheila Cohen Fund, Alexander Moore Family Fund, and the Spanbauer Family Fund.
Flip and Sheila Cohen learned about Withrow through Generous Together, which allows donors to support an organization GCF has endorsed through grantmaking.
“GCF provides a bridge between the donors and the causes or organizations,” Flip said. “GCF has presented funding needs to us that they believe match our areas of interest, which has also allowed us to expand our giving or be aware of some need that we would not have known about such as the Withrow Dental Center.”
“The students raved about the staff and the service they receive,” Sheila said. “They talked about more than the dental services, but that adults cared about them. They check on their teeth but also just check on how they were doing in general.” This care extends beyond the school day. It’s not unusual for staff to attend pep rallies and the sporting events of their patients.
“My teeth feel better,” said junior Albert Kalala. “I was in a lot of pain. Now I’m feeling better. I’m not even scared.”
That’s something to smile about.
The Greater Cincinnati Foundation invested $25,000 in 2015 in the Cincinnati Health Department for the Withrow Dental Center. Donors invested an additional $10,000 to support this work. The HealthPath Foundation of Ohio, a supporting organization of GCF, granted $222,456 for oral health in 2015.
Published in the 2015 Annual Report to the Community.