Tap and pray: Churches using card readers for donations

The costs can sometimes be as large as 3%. So say a donor gives $ 9,000 per year … that’s $ 270 bucks

I send a check … 100% goes to the church

Not into the new fangled thingies. It is usually the only cheque I write each month, though.

Donor Advised Funds

See this link on how the new tax law restricts tax deductions

https://www.cnbc.com/2018/05/11/what-the-new-tax-law-means-for-your-cha…

For starters, try a strategy called “bunching.” Rather than giving every year, “give a greater amount every other year,” said Amy O’Loughlin, a director in CBIZ MHM’s tax and business services division in Phoenix, Arizona.

For example, instead of giving $5,000 to charity annually, accelerate the gift by giving $10,000 every two years. This way, you can get your itemized deductions over the limit one year and take the standard deduction the next.

Similarly, a donor-advised fund lets you make a charitable contribution and receive an immediate tax break for the full donation, and then recommend grants from the fund to your favorite charities over time.

How a donor-advised fund helps:

https://coldfusion-guy.blogspot.com/2017/12/the-best-financial-advice-i…

• You give a large amount (“bunched”) to the fund. I named my fund the “Peet Giving Fund”
• You get a deduction on the year you bunch your donation. On the non-bunch year - we will take the standard deduction
• Then you advise your fund to meter out grants month by month
• The fund sends a check to the charity (in my case, my church). The church has to have an EIN (mine does)

Other benefits:

• Say you have a highly appreciated stock in an account. If you sell it (to cash out) you will pay capital gains tax on it. If you donate it to your fund …. goes in at full value with no taxes
• Other assets like silver coins, art (this doesn’t apply to me!) can likewise be donated

The best one (my view): https://www.fidelitycharitable.org/

I need an interpreter! Don’t get any of what you said! From what I gather, though, I don’t think what you describe is available in Canada.

I just use ePay from my bank to send it directly to the church every month. No fees.

[Jim]

Donor Advised Funds

See this link on how the new tax law restricts tax deductions

https://www.cnbc.com/2018/05/11/what-the-new-tax-law-means-for-your-char…

For starters, try a strategy called “bunching.” Rather than giving every year, “give a greater amount every other year,” said Amy O’Loughlin, a director in CBIZ MHM’s tax and business services division in Phoenix, Arizona.

For example, instead of giving $5,000 to charity annually, accelerate the gift by giving $10,000 every two years. This way, you can get your itemized deductions over the limit one year and take the standard deduction the next.

Similarly, a donor-advised fund lets you make a charitable contribution and receive an immediate tax break for the full donation, and then recommend grants from the fund to your favorite charities over time.

How a donor-advised fund helps:

https://coldfusion-guy.blogspot.com/2017/12/the-best-financial-advice-i-…

• You give a large amount (“bunched”) to the fund. I named my fund the “Peet Giving Fund”
• You get a deduction on the year you bunch your donation. On the non-bunch year - we will take the standard deduction
• Then you advise your fund to meter out grants month by month
• The fund sends a check to the charity (in my case, my church). The church has to have an EIN (mine does)

Other benefits:

• Say you have a highly appreciated stock in an account. If you sell it (to cash out) you will pay capital gains tax on it. If you donate it to your fund …. goes in at full value with no taxes
• Other assets like silver coins, art (this doesn’t apply to me!) can likewise be donated

The best one (my view): https://www.fidelitycharitable.org/

Thanks Jim that’s really interesting!

[Don Johnson] I don’t think what you describe is available in Canada.

Yes it is: http://www.canadagives.ca/donor-advised-funds/

With some banks, particularly the major ones, you can usually set up companies or organizations with auto bill pay and give that way as well. Personally, I am not fond of the practice, but it’s better than forgetting to bring the checkbook to church (as I often do).

Jim, is there a minimum threshold that you needed to put in for the DAF? I know a little about this but only from the nonprofit side of things.

[Jim]

Don Johnson wrote:

I don’t think what you describe is available in Canada.

Yes it is: http://www.canadagives.ca/donor-advised-funds/

Obviously not me.

I can see a benefit if you are wanting to give from something that would otherwise accrue a taxable gain, like stocks, say.

But what would be the benefit to the church? What other benefits would a donor have by doing things this way? What kinds of fees does the fund administrator charge?