• In general, the IRS sets limits on how much donors can give.For general cash contributions, the limitation is 50 percent of a person’s adjusted gross income.However, for contributions of capital gain property, the limit is 30 percent.
Survey after survey shows that donors rarely cite tax advantages as their most important reason for giving. It means your donors give because they care about your mission.
It is still in the best interests of your donor to maximize the tax benefit of their gifts whenever possible.
The limitation rules are complex and donors in this situation are advised to consult with a tax advisor for details.
The majority of your donors will never hit these limits, but high net-worth individuals often exceed them.
This is important for many reasons, one of which is donations as a multiplier.
Explain to donors that your organization can quickly liquidate stocks for immediate cash. For appreciated assets, the donor’s initial cash investment was well below the security’s current value.• Teach your teams how to identify economic indicators that might suggest good timing for specific asks.For example, when stock markets are high, it is very likely your wealthy donors have appreciated stock to give. Suppose a large company announces expansion with new facilities in your city.When talking with donors, you might be surprised to find that they have been liquidating assets just to have cash on hand to make their gifts and pledge payments.In addition to paying transaction fees they are also likely paying capital gains taxes, so the gift you receive has already been reduced to pay tax liabilities.Non-cash gifts, also called “asset-based giving” simply means making a gift with something of value which the Internal Revenue Service (IRS) does not consider cash.