Tuesday, October 29, 2013

Church Investments

By: Barry G. Allen- President & CEO 

I continue to be amazed and frustrated by the number of Kentucky Baptist churches unaware of the KBF’s church investment service, and therefore, have limited themselves to certificates of the deposit and money market accounts as the only investment options available to them. The same is true for church cemetery funds.

I am gratified for the many churches that take advantage of our service as a solution to their investment needs. Through September those churches using a blend of 60% Equity and 40% Fixed received a 13.1% return for the one year period; for the prior periods the annualized returns were: three year 8.6%; five year 7.4%; ten year 6.3%; and twenty year 8.0%.

Of course, past performance does not guarantee future results, but I encourage those churches with investment needs not using the KBF currently to please give us the opportunity to make a presentation to your finance committee, trustees or whatever is the appropriate leadership group. A church may select whatever allocation between the Equity Fund and the Fixed Fund that meets its objective. Also, a church may have as many different accounts as it needs.

Just last week I received a call from a church treasurer who had just learned of our service from Don Spencer, who is the church financial benefits consultant with the KBC Mission Board. This happens from time to time as Don is meeting with churches about their employees’ compensation and benefits and discovers they are looking for investment alternatives to low interest paying certificates of deposit and savings accounts. We appreciate Don’s assisting us in assisting churches. In this case, the church treasurer was so appreciative and relieved to learn of the KBF service. I shall be making a presentation to the church’s finance committee about the details of this service and answer any questions they may have.

Among the hallmarks of our service are: above market returns, below market costs and Christian-based social screening consistent with the moral standards as taught and implied in the Scriptures.

For more information, please call me toll free, or go to our website www.kybaptistfoundation.org and click on “Churches/Other Organizations,” then “Investments.”

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, October 24, 2013

Will Your Gift be Deductible?

By: Laurie W. Valentine-COO & Trust Counsel 

Do you know which gifts you make are “charitable contributions” deductible on your income tax return if you itemize your deductions?

First, to be deductible the transfer must be a gift to charity. At a minimum, the IRS requires what you give have a value that exceeds any benefit you receive from the charity in return. If you receive some thing or benefit when you make your gift your deduction is limited to the difference between the value of what you give and the value of what you receive.

If you receive or expect to receive a bargained-for benefit, you are not entitled to a charitable income tax deduction, no matter how the transaction is styled.

The gift must be to charity. A gift to charity earmarked by the giver for a particular individual is not deductible, if the giver’s primary intention was to benefit a particular individual, rather than advance the mission of the charity. The test for deductibility is whether the charity has full control and discretion over the gifted funds and their use.

Gifts must be completed by December 31 to be deductible in that tax year.

Cash gifts are completed if the check is dated December 31 or earlier and delivered to the charity, or placed in the mail with appropriate postage, by December 31. Gifts of securities are completed when properly endorsed stock or bond certificates are delivered to the charity (or placed in the mail with appropriate postage), or when the securities are received into the charity’s brokerage account, or when the security is retitled on the books of the issuing company, whichever occurs first. Real estate gifts are completed when a properly executed deed is delivered to the charity.

There are percentage limitations on the amount of charitable gifts you can deduct in a single year. If the amount of your charitable gifts in one tax year exceeds the percentage limits, you are permitted to carry the unused portion of the deduction forward and use the balance over the next 5 tax years.

Contributions of services to charity and allowing a charity to use your property rent-free are not deductible “gifts”.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, October 22, 2013

12 Things to do in 2013- Need More Retirement Income?

12 Things to do in 2013- Laurie Valentine #10

Have you determined you may need more income when you retire than will be provided by social security, IRA’s and your investments? A deferred payment charitable gift annuity may be the answer.

A charitable gift annuity is a gift arrangement whereby you make an irrevocable gift to a charity of your choice and retain the right for you (or you and one other person) to receive fixed, never-changing payments for the rest of your lives. At your death, whatever is left is paid to the charity. The future gift to charity is a charitable contribution for which an income tax deduction may be available.

A deferred payment gift annuity is set up and funded now, but the lifetime payments to you don’t start until a future date chosen by you.

The size of the payment you will receive is determined by the amount of your gift, your age at the time of the gift and how long your payments are deferred. Generally, the more time between the gift date and the first payment date the higher the payments to you will be.

You cannot outlive your payments, and the payment amount will not change regardless of changes in interest rates or the economy.

You can fund a deferred payment gift annuity with cash, stocks, bonds or other securities.

If you are 60 and plan to retire at age 70, your deferred payout rate is 7.0%. For every $10,000 you give now, you will receive $700 each year beginning at age 70, and the value of your charitable gift for income tax deduction purposes is 45% of the value of what you give.

For comparison, the immediate gift annuity rate for a 60 year old is 4.4%, the annual payment for every $10,000 given would be $440, and only 29% of the value of what you give is a “charitable gift” for deduction purposes.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, October 15, 2013

A Unique Treasure

By: Barry G. Allen- President & CEO

Located near the Cumberland River, Cumberland Falls and the Cumberland Gap, nestled in the Kentucky mountains and located on four hills in the city of Williamsburg is the University of the Cumberlands. The green, manicured campus is spacious and pastoral. The buildings are a blend of Antebellum, Edwardian and historic Williamsburg architecture. It is unsurpassed with steeples sweeping up to the glory of God.

In its 125th year, and under the leadership of James Taylor in his 34th year as president, the university remains true to its founding purpose: “To provide a first class education at rates that are compatible with the means of mountain people.” 

Although historically it has served students primarily from the mountain regions of the nine states described as Appalachia, its impact can be seen in the achievements of its graduates who have assumed leadership roles throughout the region, the nation and the world. Cumberland has produced two governors, five military generals, an admiral, five college and university presidents, a congressman, ministers, missionaries, legislators, judges, teachers, doctors, attorneys and the list goes on and on.

In the belief that freedom is the result of respect for truth and concern for humanity, the university, through its traditional liberal arts program, attempts to foster in its students a heightened awareness to the search for truth and a deepened responsibility toward mankind. It seeks to graduate men and women with Christian values derived from spiritual and intellectual experiences within the university community, as well as from the academic disciplines. It offers 40 different majors, minors and pre-professional programs, as well as a leadership/community service program. The staff/faculty ratio is 16:1, and 70 percent of its experienced faculty have earned the highest degree in their fields. 

Kentucky Baptist Foundation is honored to serve as the fiduciary of endowment and trust funds, which have been given by people who believe in the mission of this unique treasure. The earnings from these funds will provide financial sustenance in perpetuity to ensure the future of its mission.

You also can impact the world for Christ by investing in the future of this university with a legacy gift. Call Laurie Valentine or me about some options worthy of your consideration.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, October 3, 2013

12 Things to Do in 2013- Bargain Sale

12 Things to do in 2013- Barry Allen #10

Ron and Peggy sold their property to a church, which owned adjacent land. This was done through a bargain sale. The property was valued by an appraisal at $625,000. They sold it to the church for $425,000. They received a charitable income tax deduction of $200,000 to offset the capital gain on the remaining portion. Such a transaction is considered part gift and part sale. Contact Laurie Valentine for the details of a bargain sale to determine if such a strategy would work for you.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, October 1, 2013

Master of Multiplication

By: Barry G. Allen- President & CEO

The great truth of Jesus’ miracle recorded in Mark 8:1-9a is: Jesus in the “great satisfier” and the “great multiplier.” Through this feeding of the four thousand we discover the “master of multiplication.”

As the crowd gathered around Jesus had compassion for them and expressed to his disciples a concern for all the people in the crowd. He did not want to send them away hungry. How did the disciples respond? The same way you and I would have responded, and too often do respond today when faced with challenges beyond our human comprehension. They responded with a sense of helplessness and hopelessness. They responded “where in this remote place can anyone get bread enough to feed them?”

But what did Jesus do? He asked the disciples how much food was available. They replied, seven loaves of bread. Then Jesus told the crowd to sit down; he blessed the loaves and fed all the people. There also were a few fish, which he blessed and the disciples distributed among the people. Then Mark’s gospel recorded this: “The people ate and were satisfied.” And, there were seven basketfuls left over. So, the lesson for us is when we focus on Jesus, he satisfies our hunger and multiplies our potential. He takes what we give him and multiplies it to impact people in need and who need what Jesus has to offer. He truly can multiply our little into a lot. He is the master of multiplication.

Like the disciples, we too often focus on what we do not have, what we cannot do and why we cannot help. Remember this: when the disciples put the little they had into the hands of Jesus, he multiplied it to become a lot. As Dr. Paul Powell observed in his stewardship book some years ago, “Jesus takes our insufficiency and makes it sufficient; he takes our inadequacy and multiplies it into an abundance.”

As you prayerfully ponder what Jesus would have you to do in the use of the resources entrusted to you, remember the master of multiplication can take your little and make it to become a lot. And, in the process you will be blessed with contentment and satisfaction.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.