Giving Drops with Economy

COLUMBUS: Reflecting the continuing economic struggles, total charitable giving in Ohio fell from $6.54 billion to $5.87 billion in 2009, down 10 percent, according to a report Ohio Grantmakers Forum has released. The historic peak of charitable giving in the Buckeye State reached $7.38 billion in 2007.

Ohioans donated 7 percent less in 2009 than they did in 2008, although the total given reached a hefty $4.36 billion. The decrease follows on the heels of a more significant decrease of 11 percent in 2008, when the recession struck its hardest blow. Individuals in Ohio, as in the rest of the country, make up the vast majority of charitable gifts: 75 cents of every $1 in gifts to charities came from Ohio residents who donated to their favorite causes.

Foundation giving topped out at $1.22 billion in 2009, an 8 percent decrease. This was the first decrease in giving since 2002, during the aftermath of the country’s last recession. In 2008, foundation giving in Ohio had increased by a modest 3 percent.

Ohio Grantmakers Forum is an association of foundations, corporate contributions programs and other grantmaking organizations. Its mission is to provide leadership for organized philanthropy in Ohio and to enhance the ability of its members to fulfill their charitable goals.

Donations to charities decreasing

Reposted from the Oxfofd Press http://www.oxfordpress.com/news/oxford-news/donations-to-charities-decreasing-1281069.htm

By Cornelius Frolik and Rick McCrabb, Staff Writers

In 2009, Ohio taxpayers
who reported earning $200,000 or more accounted for about 1.8 percent of all federal tax returns, according to the IRS. But those tax filers accounted for about 28 percent of the charitable contributions reported to the federal government — about $1.21 billion.

Espy said donors make contributions based on their “pocketbooks,” and the number of high-income taxpayers and their earnings fell considerably during the recession.

As a result of large decreases in their gross adjusted incomes and the overall number of filings, charitable contributions by Ohio taxpayers earning $200,000 or more fell 37 percent from 2007 to 2009, according to tax data. Meanwhile, contributions by taxpayers earning $100,000 or less fell by only 8.5 percent during that time.

Janet Kasler, director
of knowledge management with the Grantmakers
Forum, said one reason why there were larger decreases in the amount of donations by wealthier
individuals was because they rely more on the stock market and their investments to determine how much they give.

The wealthy often contribute appreciated stock or mutual fund shares to charity because they can deduct the contributions on their taxes and do not have to pay capital gains taxes.

A June report by the Giving USA Foundation found that all types of charitable contributions were up about 2.1 percent in 2010 after two years of declines.

Charitable Gifts Through Your IRA

The IRA Charitable Rollover will expire on December 31, 2011. Originally passed in 2006 as part of the Pension Protection Act, the IRA Charitable Rollover allows individuals age 70½ and older to make direct transfers totaling up to $100,000 per year to 501(c)(3) organizations, without having to count the transfers as income for federal income tax purposes.

• Who qualifies? Individuals who are age 70½ or older at the time of the contribution (you have to wait until your actual 70½th birthdate to make the transfer).
• How much can I transfer? $100,000 per year.
• From what accounts can I make transfers? Transfers must come from your IRAs directly to Chillicothe-Ross Community Foundation. If you have retirement assets in a 401(k), 403(b) etc., you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to Chillicothe-Ross Community Foundation.
• To what organizations can I make gifts? Tax exempt organizations that are classified as 501(c)(3) organizations, including Akron Community Foundation, to which deductible contributions can be made.
• Can I use the rollover to fund life-income gifts (charitable gift annuities, charitable remainder trusts, or pooled income funds), donor advised funds or supporting organizations? No, these are not eligible.
• Can I use the rollover to support a particular purpose of the Chillicothe-Ross Community Foundation? As with all other gifts, you can direct your IRA Charitable Rollover gift as you see fit. However, you cannot direct your gift for a purpose from which you receive a personal benefit, goods, or services in return, such as a gala ticket, to purchase items at a silent auction, etc.
• How will the Chillicothe-Ross Community Foundation count the gift? We will give you full credit for the entire gift amount.
• What are the tax implications to me?
  • Federal — You do not recognize the transfer to the Chillicothe-Ross Community Foundation as income, provided it goes directly from the IRA provider to us. However, you are not entitled to an income tax charitable deduction for your gift.
  • State — Each state has different laws, so you will need to consult with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal income or federal tax paid. Still other states have no income tax at all.
• Does this transfer qualify as my minimum required distribution? Once you reach age 70½, you are required to take minimum distributions from your retirement plans each year, according to a federal formula. IRA charitable rollovers count towards your minimum required distributions for the year.
• How do I know if an IRA charitable rollover is right for me?If you are at least age 70½ and
  • You do not need the additional income necessitated by the minimum required distribution, OR
  • Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR
  • You do not itemize deductions.
• What is the procedure to execute an IRA charitable rollover? To complete an IRA charitable rollover, the first step is to contact your IRA provider to learn their procedures. We also offer a sample letter you can send to your IRA provider to initiate a rollover. Make sure that you contact us when you direct the rollover so we can look for the check from your IRA provider.