Scenarios to Consider at Tax Time, Why Local Giving?, Supporting Wildfire Relief Efforts | Advisor Newsletter (Feb. ’25)

We hope all is well as 2025 gets fully underway. Our team is really happy that so many attorneys, CPAs, and financial advisors have already reached out to ask questions about charitable planning techniques that could be a good fit for your clients. It is our honor to be your first call when the topic of philanthropy arises.

Here’s what’s been trending with advisors recently.

• Tax Time Scenarios: As tax time approaches, you may encounter one or more of three scenarios related to the timing of IRA distributions, business succession planning, and opportunities to give appreciated stock. Check out our tips captured in our popular “if this, then that” mini case study format.
• Hometown Love: Local issues are top of mind for many of your clients. The community foundation is uniquely positioned to help your clients make the biggest difference in the areas of our community’s greatest needs while also helping your clients support the full range of their charitable interests. 
• Tripling Your Client’s Giving Impact: Have you heard about our $2-for-$1 matching grant, which is available through Dec. 31, 2025? Thanks to a gift from the Lilly Endowment, your clients can triple their charitable impact to any gift made to our unrestricted Community Impact Fund.
• Supporting Wildfire Relief Efforts: The aftermath of wildfires in Southern California is heartbreaking, to say the least. Our team is here to help you and your clients navigate the options for effective and trusted ways to provide financial support. 
• Just A Few SIEPC Meetings Remain: You’re invited to join the Southern Indiana Estate Planning Council on Tuesday, Feb. 11 as Goldberg Simpson’s Kelli Brown speaks on “Dogs, Horses, Turtles, and More! (Almost) Everything an Attorney Needs to Know to Assist a Client with Estate Planning That Includes Pets and Animals”. Visitors can attend their first meeting free of charge with an RSVP.

It is our honor and pleasure to work with you and your clients. Thank you for partnering with the community foundation. We wish you all the best in the coming weeks!

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“If this, then that”: Scenarios to consider as tax time approaches

by John Elliott, Chief Financial Officer

As attorneys, CPAs, and financial advisors, you are well aware that you have clients’ attention when tax season rolls around. This makes it a great time to cover tax planning strategies for the current year and beyond. To help incorporate charitable giving topics into your tax season client conversations, we’ve put together tips to address three scenarios where the Community Foundation of Southern Indiana can assist your efforts. 

Evaluate QCDs sooner rather than later. 

If: Your client missed the 2024 deadline for a Qualified Charitable Distribution. 

Then: Make sure the client took an RMD for 2024 (if required to do so). Start planning now for 2025 QCDs, paying very close attention to the required process. QCDs are an excellent tool for your clients who’ve reached the age of 70 ½ to give to a designated, field-of-interest, or unrestricted fund (donor-advised funds are not eligible), but if the client waits until the last minute at year-end, there might not be time for the transaction to be completed by December 31 as required. Plus, QCDs executed early in the year can help avoid negative effects of the “first-dollars-out rule” so that the QCD can count towards your client’s 2025 RMD.

To access our fillable QCD fund form, please click here.

Watch for charitable giving opportunities in business succession planning.

If: Your client is beginning to consider exit strategies for a closely-held business.

Then: Reach out to the community foundation right away. Gifts of closely-held stock to a charitable fund can be a very useful component of a business succession plan. That’s because a client can gift shares of the business, which in turn means that no capital gains tax will apply to the gifted portion when the business eventually sells. The proceeds of the gifted shares flow into the fund to be used for your client’s charitable priorities. Keep in mind that timing is crucial; if a deal is in the works at the time the shares are transferred to the charitable fund, the charitable deduction is in jeopardy. 

Consider gifts of appreciated stock early in the year.

If: Your client’s stock portfolio made big gains last year.

Then: Evaluate whether it might be wise to make gifts of appreciated stock to a fund at the community foundation early in the year, rather than waiting until the end of the year. If certain stock positions are high right now, it’s worth considering whether a gift in the very near future could be a good move to maximize charitable dollars. As a reminder, gifts of stock to a public charity are eligible for a charitable deduction in the amount of the stock’s fair market value at the time of transfer. And, when the stock is sold so that its proceeds can be deployed to further your client’s charitable goals, no capital gains tax will apply.

Our goal is to be your go-to sounding board for any client situation where charitable giving is an option. Please reach out anytime you and a client are discussing philanthropy. In most cases, the community foundation can help. Even if our tools are not a fit, we will point you in the right direction!

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For clients who love local causes, the community foundation is the place

by Linda Speed, President and CEO

Most of your philanthropic clients likely support a wide variety of charities year after year. The causes they support represent a range of motivations, including personal experience, a role as a volunteer or board member, family tradition, or alignment with values and community priorities. 

Many of the charitable organizations your clients support are local. That’s important to note because it means that your clients are especially well-positioned to lean into the community foundation’s unique position as the hub for charitable giving and local knowledge. Here are three reasons that matters:

• LOCAL: Clients can tap into the team’s knowledge about specific organizations, including financial information, data about the impact of a charity’s programs, and observations of an organization’s areas of greatest need.
• LEADERS: Clients can choose from a variety of fund types depending on what they’d like to achieve. A designated fund, for example, allows your client to set aside tax-deductible dollars that are dedicated to supporting a specific organization. Through the community foundation’s services, funds are distributed over time to the charity while the assets remaining in the fund are protected from the charity’s creditors. Another example is an unrestricted fund, which leverages the community foundation’s extensive research about the needs of the community and the nonprofit programs that are addressing those needs.
• FOREVER: Clients can work with CFSI to leave a bequest to an endowment fund to support community needs for generations to come. As a perpetual organization, the community foundation ensures that charitable giving stays strong in our region to address important needs as they evolve over time.

Of course, if your client establishes a donor-advised fund at the community foundation, the fund can support local causes as well as causes across the country. As the hub for your clients’ charitable giving, our tools and our team are dedicated to helping your clients achieve their charitable goals both near and far.

Working with the local community foundation, no matter what a particular client’s charitable priorities may be, is itself a strong show of support for philanthropy right here in our community.

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Triple Your Client’s Charitable Giving Impact

For example, a $1,000 unrestricted gift will be paired with a $2,000 match from Lilly – leaving CFSI with $3,000 in total funding. Meeting the match would add more than $5,000,000 to the Community Impact Fund, generating approximately $200,000 in additional grant funding, EVERY YEAR, for the needs and priorities of our community.

To achieve this match, we will need the help of our entire community to raise this funding by Dec. 31, 2025. This is an ambitious goal, but we believe in the ongoing vision and generosity of our residents to help us meet it, carrying on the purpose and foresight of those who first helped CFSI get its start in 1991.

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Wise giving: Advising clients on supporting fire relief efforts

by Crystal Melcher, Vice President of Community Philanthropy

In the wake of the devastating California wildfires that have ravaged communities around Los Angeles, many of your clients are understandably eager to provide assistance to those affected. This may be particularly true for your clients who are corporate executives and want their companies to participate in a meaningful way. Before your clients rush to donate, encourage them to consult the community foundation. Here’s why:

Local expertise, networked nationally 

Community foundations have unparalleled local knowledge and also frequently collaborate with other community foundations across the country, especially on disaster relief initiatives. This means that our team addresses local disasters when they occur here, and we also coordinate with community foundations in affected areas when disasters occur elsewhere. Our team can guide your clients toward the most effective and impactful ways to contribute to address gaps and avoid duplication of effort. 

Fraud avoidance

Our team can help your clients navigate the complex landscape of disaster relief organizations and initiatives. With numerous GoFundMe campaigns and charitable organizations emerging in response to the wildfires, it can be challenging for your clients to discern which efforts are legitimate and most effective. We can provide vetted information about reputable organizations and initiatives, helping your clients make informed decisions about where to direct their support.

Best practices for tax planning

As always, our team is here to offer suggestions for tax-efficient giving strategies. For instance, we can help you and your clients learn more about qualified disaster relief payments under Internal Revenue Code Section 139, which offers significant tax advantages for both donors and recipients. These payments are not considered gross income for the recipient and are tax-deductible for the donor, making them an attractive option for clients looking to maximize the impact of their contributions.

Long-term strategies

We’ll help your clients think strategically about long-term recovery efforts. While immediate relief is crucial, the recovery process from such devastating wildfires will take years. Our team can advise your clients on how to structure donations to support both immediate needs and long-term rebuilding efforts, ensuring that support continues even after the initial media attention has faded.

As always, our team helps your clients ensure that their contributions are not only generous but also strategic and impactful. We’ll collaborate with our community foundation colleagues in affected communities to support a journey of recovery and resilience.

To view organizations that CFSI has vetted as potential 501c3 partners for your giving, please click here.

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Just A Few SIEPC Meetings Remain…