Giving Appreciation

By: Richard Carnes 

Many individuals are reviewing their charitable contributions at the year end and considering how they could provide additional gifts to their church and ministry causes. Perhaps you would like to make gifts above what you give out of income as tithes and offerings to provide on-going support to additional Baptist causes.

One such way to achieve this giving is to use assets that have appreciated in value for making “above and beyond” gifts to support the Christian ministries that are important to you. If you have investment securities you have owned for more than a year that are worth more than the security cost, consider using this asset to make gifts.

Your deduction will actually be based on the full value of the security. In addition, you will not owe capital gains tax that would normally be due on a sale of the security.

Using an appreciated asset to make a gift to your church or other Baptist cause can result in a lower after-tax cost to make your gift than if you use the same amount of cash to make the donation. Savings from the charitable deduction and the bypass of capital gains can be considerable. How much you save depends on your actual income and capital gains tax rates.

If you own investment securities that are now worth less than they cost, consider selling the security and give the cash proceeds. When you are able to deduct the amount of the loss as well as the gift amount, your deductions may well total more than the current value of the investment.

The process of making gifts of appreciated securities need not be complicated. If your financial advisor holds the securities for your account, instruct that the security be electronically transferred to the financial account of the designated charity. This is often the most convenient way of making your gift.

When giving securities, including mutual funds, bonds, notes or mortgages, specific advice and instructions should be obtained from your financial advisor. Additional time should be allowed for completion of such gift transactions.

The Kentucky Baptist Foundation staff is honored to work with individuals seeking how best to make gifts of appreciated assets to their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

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.

12 Creative Giving Ideas for 2015- #12

By: Laurie Valentine- COO & Trust Counsel

A Donor Advised Fund (“DAF”) is a legacy giving plan that provides the giver immediate tax benefits and the input on future distributions.

A DAF is established through gifts to a public charity under an agreement in which the giver retains for himself/herself, and possibly others, the right to make recommendations for future distributions out of their DAF to other charitable organizations. Those recommendations can be for distributions of the DAF’s income and/or principal.

Gifts to a DAF are deductible in the year they are made, whether or not there is any charitable distribution out of the DAF during that year.

A DAF is a good charitable giving plan for people who want flexibility in timing their charitable support. A gift can be made to your DAF at a time when it may be most advantageous for tax-planning purposes without having to immediately decide what charitable causes/projects the gift will ultimate support.

A DAF can also be an excellent tool for teaching philanthropy to children. Including children as “advisors” of the family’s DAF gives them the opportunity to learn first-hand, as the family makes decisions about charitable distribution recommendations together, how their parents approach philanthropy, which organizations they value most and why, and what their parents expect from charitable organizations they support.

Donor advised funds provide flexibility in timing your philanthropic support to charitable causes important to you and a method for “growing” giving children.

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.

Spiritual Shade Trees

By: Richard Carnes

What are your favorite memories of shade trees? I vividly recall the shade tree planted by my grandparents at their home in Rock Springs, Alabama. My memories include making countless freezers of homemade ice cream under this shade tree; family reunion meals spread out beneath the canopy of this tree and lessons taught by two godly grandparents to 15 grandchildren. Looking back, while we grandchildren didn’t plant this tree, we enjoyed all the benefits it provided.

My grandparents’ life example and legacy were built on both spiritual investment and financial investment. As a farmer and an educator, they lived a modest life, but one committed to supporting their church with gifts of time, talent and property. They realized and instilled in their children and grandchildren that they were working to touch lives across the world from their pew in Rock Springs Baptist Church. You might say that my grandparents were planting spiritual shade trees under which they would never sit, but rather for others to enjoy the lasting spiritual blessing they would provide.

You may be asking, what do shade trees and the Kentucky Baptist Foundation have to do with each other? The ministry of the Foundation is focused on encouraging and facilitating legacy actions on the part of Kentucky Baptist church members. Our team fulfills this mission through educating individuals on how to make gifts through their estate plans. These gift decisions will have the effect of planting spiritual shade trees under which the donor may never sit, but under which many others will sit and enjoy the benefit for generations to come.

That is what legacy planning and giving is all about: committing all the talents and resources God has entrusted to you for the benefit of your family, your church family, and all persons that need the hope of Jesus Christ.

Many donors have entrusted the planting of their spiritual shade trees through the Kentucky Baptist Foundation during the past 70 years. The Foundation is pleased that this past year, through the earnings produced on the gifts and investments placed with the Foundation, it was able to distribute $6,102,144 supporting the ministries of Kentucky Baptists across the state and the world.

Let me encourage you to call on the Foundation to assist you in learning how you can plant your own spiritual shade trees. To learn more, contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org.

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.

12 Creative Giving Ideas for 2015- #11

By: Laurie Valentine- COO & Trust Counsel

The current low interest rate environment has increased interest in legacy giving plans that use a factor tied to current interest rates to value the gift to charity. When interest rates are low, the value of the charitable portion of those giving plans is higher. One such plan is a gift of a remainder interest in real estate.

To give a remainder interest in real estate to charity, you simply deed property to a charity while retaining for yourself the right to full use and enjoyment of the property for a term of years or the rest of your life. At the end of your retained interest, the property is immediately owned by the charity.

The charitable gift is completed when you sign the deed giving the remainder interest to charity, not when your interest in the property ceases. That means you can take action now, but continue to have use of the property for whatever period works for your situation.

Real estate remainder interest gifts…a legacy gift plan that provides potential income tax savings to the giver now and a significant gift to charity in the future.

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.

Are You an Oikonomos?

By: Richard Carnes 

Christian Stewardship is a discipline that must be learned and lived. In the New Testament we see the Greek word oikonomia (stewardship) referenced. Oikonomia means the act of managing what belongs to another person. A person is not born with this knowledge of stewardship, it has to be learned from other wise, mature Christians. Also it is important to recognize that the exercise of oikonomia is more about one’s spiritual development than one’s financial development.

As we search further the variations of the word stewardship we come to the Greek word oikonomos (steward). An oikonomos is a person in charge of the affairs of another; one who acts as a manager; one who is entrusted with the management of the material things owned by someone else.

When we explore the role of the steward in the New Testament period we learn that the steward functioned like a member of the family. The steward was expected to exercise intelligence and initiative, unlike a slave or servant. We also come to understand that stewardship involved both relationship and responsibilities for the master as well as accountability and faithfulness to the master.

Churches can have a tremendous influence on its members in creating a stewardship culture that cultivates Kingdom-minded stewards. Church leadership can foster this stewardship culture through regularly presenting biblical truths about the stewardship of our lives, including the possessions God has entrusted to us, along with His expectations, promises, rewards and punishments.

The Kentucky Baptist Foundation can assist Kentucky Baptist churches in fostering a stewardship culture among its members by encouraging individuals to have an up-to-date Christian estate plan; educating church members on how to achieve their Christian estate planning objectives; and providing private, confidential estate stewardship consultation to individuals seeking guidance on how to support the ministries of their church through their estate plan.

The Kentucky Baptist Foundation staff is honored to work with individuals seeking how best to be a faithful oikonomos. To learn more about how we can assist you or your church, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org.

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.

Give an Income Stream

By: Laurie Valentine

Is your church in a capital campaign? Do you make recurring gifts each year to missions organizations, childcare ministries, your Baptist college alma mater or other charitable causes?

Would you be interested in making those gifts in a way that coordinates that giving over the next few years with a tax-saving way to transfer assets to your family?

If so, consider a charitable lead annuity trust (“CLAT”).

A CLAT is a legacy giving plan that pays a fixed income stream to one or more charitable causes for a designated period of years. At the end of the term of years the remainder of the CLAT can either be returned to you (“Grantor CLAT”) or be distributed to your children and/or other family members (“Non-Grantor CLAT”).

While creating a Non-Grantor CLAT does not entitle you to a charitable income tax deduction, it does provide a way to pass assets to your children or others at reduced gift and estate tax cost.

Gift tax savings come from the fact the tax value of the future gift to your family is the present value of the remainder interest in the trust, not the full value of what you place in the trust. With careful coordination of the fixed amount being paid to the charitable beneficiaries and the trust term you can reduce the present value of the remainder gift to family significantly.

Estate tax savings result from the removal of the asset, any subsequent appreciation and the future income it generates from your estate.

Leverage future asset transfers to family while providing recurring current gifts to charitable causes important to you by “giving an income stream” through a CLAT.

Laurie Valentine if Chief Operating Officer and Trust Counsel for the Kentucky Baptist Foundation. For more information, please call (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.

Fiduciary Management of Church Assets

By: Richard Carnes

The Kentucky Baptist Foundation continues to discover that a large number of churches are unaware of the fiduciary services and investment management oversight services that the Foundation makes available to Kentucky Baptist churches and institutions. Of course, we are grateful and pleased to already be assisting the investment needs of many churches using the Foundation’s investment oversight services and we desire to extend this capability to many more churches.

You may have heard the term fiduciary and wondered what it means. A fiduciary is a person or organization who has the legal responsibility for managing someone else’s money, including members of a church’s investment committee, foundations, endowments, and trustees of private trusts.

Fiduciary status is generally defined as a person who:

· Manages property for the benefit of another;

· Exercises discretionary authority or control over assets;

· Acts in a professional capacity of trust and renders comprehensive and continuous investment oversight

A fiduciary demonstrates prudence by the process through which investment decisions are managed, rather than by showing that investment products and techniques are chosen because they were labeled as “prudent.”

The Kentucky Baptist Foundation is honored to serve Kentucky Baptist churches and Kentucky Baptist institutions through its fiduciary service of investment management oversight. We are happy to provide information about the Foundation’s investment service to those churches who may have this need. We encourage church leaders to invite Foundation staff to make an investment presentation to the appropriate leadership group in the church for consideration and comparison.

The hallmarks of the Kentucky Baptist Foundation’s investment management oversight service are: value added performance; Christian-based social screening of investment securities; and below market fee cost. Although past performance is no guarantee of future results, the Kentucky Baptist Foundation can provide your church with references of other churches that have been satisfactorily using the Foundation’s services for a number of years.

To get started with learning more about this valuable fiduciary service of the Kentucky Baptist Foundation, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533. 

Richard Carnes is the president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

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.