By Jenny Flynn, President and CEO, Community Foundation for Southern Arizona
The giving season is one of my favorite times of year. Favorite family recipes and traditions combine with a spirit of generosity with our loved ones and our community. The warm glow of giving is not just a turn of phrase. Research suggests health and well-being benefits come from donating to charities or volunteering your time.
Your help and dollars are needed right here in your own community. Whether your interest is in local animal shelters and rescues, literacy programs, vocational education or performing arts — Southern Arizona’s vibrant and impactful nonprofits are terrific options for your giving.
More good news — it’s not too late in the year to support the organizations you care about and that rely on your support to achieve their missions. Here are some of the giving strategies that we are talking about right now with our team of professional advisors.
Give Unrestricted Gifts
Like all local businesses, nonprofits fulfill their missions amid ups and downs in insurance prices, rent and interest rates, labor costs, and rapid evolution in technology and local trends. It is vital that the nonprofits our community relies on for support receive the kind of financial support they need to respond to changing community needs. Flexibility helps each dollar go farther.
When you give a nonprofit an unrestricted gift, you actually give two gifts: the dollars themselves and the flexibility to direct their energy into fulfilling their mission.
Donations of Appreciated
Stock Are Still A Win-Win Many stocks have rebounded in the last year, and donating appreciated stocks is an extremely tax-efficient way to support your favorite nonprofit — just make sure they
are equipped to receive and process a gift of securities. Another option is to use that donation to replenish or establish a donor advised fund. Establishing a donor-advised fund with a contribution of appreciated stock can help you maximize the tax benefits of your donation, streamlines your charitable giving recordkeeping moving forward, and still allows you to support your favorite
local charities.
When you give appreciated stock held for more than one year (a long-term capital asset) to your donor-advised or another type of fund, instead of selling it outright, you avoid capital gains tax. Plus, marketable securities typically are deductible at their fair market value, further helping your overall income tax situation.
Qualified Charitable Distributions Offer Special Benefits for Donors Over 70½
If you are more than 70.5 years old, a Qualified Charitable Distribution (QCD) is a very smart way to support the nonprofits you care about here in Southern Arizona. Through a QCD — also sometimes called an IRA charitable rollover — you can direct up to $105,000 from your IRA to local charities. That means you avoid income tax on the distributed funds.
In addition, your QCD counts toward satisfying your required minimum distribution (RMD) once you reach RMD age. Our team at the Community Foundation for Southern Arizona (CFSA) can work with you and your advisors to go over the rules for QCDs and evaluate whether the QCD is a good fit for you.
Although IRA distributions cannot be contributed to a donor-advised fund, they offer an opportunity to reduce your taxable income while supporting a specific nonprofit or area of interest, including the initiatives and funds at CFSA, such as our Local News Initiative or Housing Fund.
To make a Qualified Charitable Distribution from your IRA to a nonprofit, I recommend starting the process as soon as possible to ensure that your gift is received and processed on or before Dec. 31, 2024.
Don’t Overlook Arizona’s Tax Credit Opportunities
Arizona has a variety of charitable tax credit opportunities that allow you to receive a dollar-for-dollar tax credit for donations to schools, qualified charitable organizations and organizations that support children in foster care, among others.
You can view information about the various tax-credit opportunities and lists of approved organizations at azdor.gov/tax-credits.
We Are Here to Support You
This year, please give the gift of generosity. Together, we can continue to support the vital nonprofit organizations in our community that enrich our lives and make Southern Arizona a special place to live.
Please don’t hesitate to call or email our team if you need help determining how to best support local efforts to create a vibrant and equitable community for all Southern Arizonans. You can reach us at (520) 770-0800 or by email at giving@cfsaz.org. As always, we recommend contacting your legal and financial advisors for specific information regarding your individual situation.