Ways of Giving

New Fairfield Community Foundation offers many ways of giving that support charitable causes that mean the most to donors.

We are happy to discuss any of these ways of giving with donors and their professional advisors to maximize the tax consequences of their gifts. Ways to give are as follows:

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Cash, including credit card and check, is an easy and convenient way for you to start a fund or give to an existing established fund. Gifts of cash allow you to claim a tax deduction of up to 50 percent of your adjusted gross income in any one year when you itemiz deductions. If you cannot deduct the entire gift in the first year, any excess may be carried forward for up to five additional years.

Gifts of appreciated securities offer important tax advantages. When you itemize deductions, the full fair market value of the securities is deductible as charitable contribution up to 30 percent of your adjusted gross income. Deduction amounts that exceed the limit can be carried forward for up to five additional years. You do not have to pay federal or state capital gains taxes on the appreciated portion of the gift. In addition to publicly traded securities, closely-held stock, restricted securities and mutual funds are also options for giving.

After providing for loved ones, you may want to consider leaving a portion of your estate to the NFCF. A bequest, whether of cash, appreciated stock, real estate or other assets, is often the easiest way to fulfill your charitable vision, and permits you to support your community while retaining complete control over your assets during your lifetime. Bequests can take a number of forms: a specific dollar amount; a percentage of your estate; a residual bequest (i.e., what remains after other bequests are satisfied); or a contingent bequest, whereby NFCF receives assets only under certain conditions. You may name a new fund, an existing fund or a specific group or organization to receive your bequest to NFCF. A charitable bequest can dramatically reduce estate and inheritance taxes. Because a bequest to NFCF allows for an unlimited charitable deduction, and because combined federal and state taxes can exceed two-thirds of the estate, bequests typically generate tax savings that can be passed to your heirs. In addition to publicly traded securities, closely-held stock, restricted securities and mutual funds are also options for giving.

Retirement Plans
Retirement plan assets, such as 401(k) plans and IRAs, can make excellent charitable gifts. Because retirement plans are heavily taxed at the death of the plan participant, many people prefer to leave other assets to heirs and to name a fund at NFCF as the beneficiary of the retirement plan, which allows them to donate the full amount of the plan to the fund and avoid most taxes. The simplest way of leaving retirement fund assets to NFCF is to designate the foundation as the beneficiary or contingent beneficiary of the retirement fund. This avoids both the estate tax and income tax, which can total 80 percent or more of the plan’s assets. Another option is to designate a charitable remainder trust as the plan beneficiary, providing lifetime income to your children or grandchildren and a charitable fund at NFCF as the remainder beneficiary.

Life Insurance
If you have a life insurance policy you no longer need, you can use it to make a significant gift to charity, with tax benefits that you can enjoy during your lifetime.

There are many types of life insurance products currently available that provide very individualized planning. In most cases, the donor irrevocably assigns the ownership rights of a life insurance policy to NFCF, which is designated as the beneficiary. The donor then makes yearly contributions to NFCF to cover the annual premium; the yearly contributions are deductible up to 50 percent of adjusted gross income. Paid-up policies can also be contributed.

You can replace the dollar value of an asset transferred to NFCF with a life insurance policy. Or, you can use regular payments from a charitable remainder trust to fund an irrevocable life insurance trust. The trust can purchase insurance on your life to benefit your heirs. This way, you can make a gift to NFCF and replace the value of this gift within your estate with life insurance proceeds.

Real Estate
NFCF welcomes gifts of real estate that are readily marketable and free of environmental or other problems. NFCF can accept gifts of real estate, including a house or condominium, farm, commercial building and income- or non-income-producing land.

A gift of real estate that you have owned for more than a year entitles you to the same federal tax advantages as those available for gifts of securities: the full market value is deductible as a charitable contribution, up to 30 percent of your adjusted gross income, when you itemize deductions. Deduction amounts that exceed the limit can be carried forward for up to five additional years. In addition, you do not have to pay federal or state capital gains taxes on the appreciated portion of the gift and remove the asset from your taxable estate.

Tangible Personal Property
In many cases, NFCF will accept personal property, such as artwork, jewelry or antiques, as a donation. However, donors need to be aware that under the so-called “related use rule,” unless NFCF can use the donated item in connection with carrying out its charitable purpose, the donor may not claim the fair market value of the donated items as a charitable income tax deduction. If this is the case, the deduction is limited to the donor’s cost basis of the donated item, which in many cases is far less than its current value.

There are, however, notable exceptions that might make a donation of tangible property financially attractive. If you inherit valuable tangibles, they acquire a new basis based on their value at the time of your inheritance. If you give them to NFCF the deduction equals the new basis, even if  NFCF immediately sells them. If you make a gift at your death through your will or a revocable trust, your estate is allowed an estate tax charitable deduction equal to the fair market value of the property, whether or not the personal property relates to the charity's tax-exempt purpose.

Private Foundations
Your private foundation may wish to use its 5 percent annual required pay out to create a donor advised fund at NFCF, allowing you more time to deliberate about your grants. You may also meet your pay out requirement by contributing to an existing fund at NFCF, such as your local area fund. All contributions to NFCF count toward the private foundation annual pay out requirement.

You may also choose to transfer the assets of your private foundation into a donor advised or other type of fund at NFCF and terminate the private foundation. This frees you from the responsibility of administering a private foundation and allows you to focus your energies on identifying organizations that you want to support. The fees for having your foundation operate as a fund at NFCF are frequently less costly than the costs of maintaining the private foundation.

Where to give

Whether you want to support a cause, honor a loved one, benefit a community or help students, we can make it simple for you to create or contribute to a fund that matches your vision.

  • Area Specific Funds
  • Donor- advised Funds
  • Field of Interest Funds
  • Designated Funds
  • Scholarship Funds
  • Memorial Funds
  • Supporting Organizations
  • Nonprofit Organizations
  • The Community Fund


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