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First, a cautionary word: This section is not intended to be your ultimate one-stop resource for tax information.
Rather, our intent here is to provide you, as accurately as possible, with key facts and terminology that are in your best interest to be aware of during conversations with prospective donors. So let's start by getting a handle on why having an understanding of the nuts and bolts of the tax advantages available to donors through various gifting channels is so important to your success. Here's the surprising truth:
In multiple notable surveys of donors, tax savings are not in the top 10 reasons why people make charitable gifts.
This is not because donors are always true believers who have a laundry list of altruistic reasons for giving--even if that was the case, it would mean that tax savings wouldn't make the top two or three motivations for giving. But for tax savings to not make the top 10? That can mean only one thing: The vast majority of donors aren't aware that significant tax savings is even possible as an outcome of making a charitable gift.
That's where having an understanding of the tax-saving structures involved in major giving will give you a leg up: Doing so positions you to be the bearer of good news to whichever prospective donor you happen to be in conversation with. Nobody likes paying taxes. This is indisputably true. But if it's also true--or at least quite likely--that the donor in front of you doesn't have a good idea about how making a gift to your organization can save them a significant amount of tax dollars on the back end, then you have the opportunity to be the bearer of significantly good news.
That's why we're convinced that if you have a basic understanding of the way charitable giving impacts taxes, you'll pick up on comments from your prospects that may be relevant to designing a future gift. And, correspondingly, your understanding of tax information will separate you from most other major gift officers, helping you increase your credibility and strengthen your donor relationships.
In this section, you'll find facts and information on federal income tax, capital gains tax, gift tax, and estate tax as they relate to and are impacted by major giving. Everything on these pages reflect the actions of congress at the very end (New Years Eve) of 2012. "American Taxpayer Relief Act of 2012"
IMPORTANT NOTE: These pages do not take state taxes into consideration. You'll need to research the tax laws of your state and/or the state in which your prospect claims permanent residence.
All content provided by Philanthropy Works is provided in the spirit of education. It is not legal or tax advice. This material merely provides an overview of, and does not purport to describe completely, the requirements established by Internal Revenue Code, the Treasury Regulations and related IRS pronouncements. You and your prospective benefactors must consult an attorney for legal advice. You will note there are occasions in the material where PW contributors offer prejudices and opinions. Please accept them as such.