Different Ways to Give
Most people give from their checking account. If you own investments, a retirement account, or a giving fund, there is more than one way to give.
Three distinct ways to give
These three routes are not variations on one gift. They come from different kinds of accounts, are treated differently at tax time, and only one has an age requirement.
Which situation applies to you?
You only need one of these routes to apply to your situation. They are separate options, not a checklist.
From Your Brokerage
Shares move directly to the church's brokerage account. You do not sell them first, so appreciated stock can be transferred without first recognizing the capital gain.
For example, stock purchased for $2,000 and now worth $10,000 can be transferred directly to the church as $10,000 worth of stock.
From an IRA
If you are age 70½ or older, a qualified charitable distribution (QCD) can send funds directly from a traditional IRA to the church without the distribution first counting as income.
Once required minimum distributions have begun, a QCD may also count toward that year's requirement.
From a Giving Fund
If you already give through a donor-advised fund, you can recommend a grant to Redeemer Bible Church and the fund sends the money on your behalf.
You received the charitable deduction when assets were originally contributed to the fund rather than when the grant is later sent to the church.
Your institution sends the gift directly.
Whichever route you use, the assets or funds need to move from your financial institution directly to Redeemer Bible Church.
You only need one of these to be true.
These are separate giving routes, not a checklist.
How each option works
Select a giving method below for instructions, tax information, and things to know before beginning a transfer.
Giving from a brokerage account
This option applies to stock, ETFs, or mutual funds held in a regular taxable brokerage account rather than a retirement account.
How to make the gift
- Contact Redeemer first. Ask Alyssa for the church's current transfer instructions. Account information can change, so always request a current copy.
- Contact your broker. Ask for an electronic transfer of the shares directly into Redeemer Bible Church's brokerage account.
- Tell Redeemer what you sent. Send your name, the stock, number of shares, the fund or ministry you intend the gift for, and the date the transfer was initiated.
- Keep your paperwork. Retain the church's acknowledgment letter and your broker's confirmation for your tax records.
Do not sell the shares first
Selling appreciated shares and then donating the cash can trigger the capital-gains tax the direct transfer was intended to avoid. The shares should move to the church while you still own them.
Shares held more than one year
Under general federal rules, you may generally deduct the full market value of appreciated shares while the capital gain is not recognized. The deduction is generally limited to 30% of adjusted gross income, with up to five years to carry forward an amount above that limit.
Shares held one year or less
Your deduction is generally limited to what you originally paid rather than what the shares are currently worth.
Shares worth less than you paid
The church's giving guide recommends not donating these shares directly. Generally, selling them may allow you to claim the capital loss on your return and then donate the cash.
If you do not itemize
The charitable deduction itself may not benefit you, but avoiding recognition of the capital gain can still make a direct gift of appreciated shares useful.
Value and timing
- The gift is valued at the average of the high and low trading prices on the day the church receives it.
- For an electronic transfer, the gift date is the day the shares arrive in the church's account.
- Transfers take several business days and December is particularly busy. For a year-end gift, begin the process by mid-December.
Records for your return
- For gifts of $250 or more, keep the written acknowledgment from the church.
- If your noncash gifts total more than $500 for the year, Form 8283 is filed with your return.
- Publicly traded stock is reported in Section A of Form 8283 and does not require an appraisal.
- The church's acknowledgment will describe the shares but will not assign them a dollar value.
Ask before sending these
Please contact the church before transferring mutual fund shares, restricted or Rule 144 stock, stock in a closely held or family business, S corporation stock, partnership or LLC interests, or cryptocurrency. These gifts may require additional review or a different transfer process.
Giving directly from an IRA
A qualified charitable distribution, commonly called a QCD, allows eligible donors to send funds directly from an IRA to Redeemer Bible Church.
Who can use it?
- You must be 70½ or older on the day the distribution is made.
- It works from a traditional IRA.
- A 401(k), 403(b), or similar workplace plan is not eligible. Those funds would first have to be rolled into an IRA.
- There is an annual limit per person that is adjusted each year for inflation. Ask your custodian or adviser for the current figure.
How to make the gift
- Ask the church office for Redeemer's legal name, mailing address, and tax identification number.
- Tell your IRA custodian you want a qualified charitable distribution paid directly to Redeemer Bible Church.
- The payment must go from the custodian to the church. A check made payable to you is treated as an ordinary taxable withdrawal.
- Tell the church the gift is coming and where you intend it to be designated.
What it does at tax time
The amount is excluded from your income rather than deducted as a charitable contribution. Because it never enters your income, the benefit can apply whether or not you itemize.
Keeping the distribution out of income can also affect other income-related figures, including the taxable portion of Social Security and Medicare premium surcharges.
Once required minimum distributions have begun, a QCD can count toward that year's requirement.
Watch for these
- A QCD cannot be made to a donor-advised fund, private foundation, or supporting organization.
- Keep the written acknowledgment from the church confirming that you received nothing in return.
- The distribution must leave your IRA by December 31 to count for that year.
- If you have made deductible IRA contributions after age 70½, part of your QCD may be taxable. Discuss this with your tax preparer.
Giving through a donor-advised fund
This route is for donors who already have a donor-advised fund through a brokerage, community foundation, or other sponsoring organization.
How it works
- Recommend a grant to Redeemer Bible Church through your donor-advised fund.
- Your fund may ask for Redeemer's legal name, mailing address, and tax identification number.
- Tell Redeemer the grant is coming and which fund or ministry you intend it to support.
What it does at tax time
There is no deduction for the grant itself. You already took the applicable deduction in the year you contributed money or stock to the fund.
For that reason, the church's letter is a thank-you rather than the tax receipt for the original contribution. Your contribution records come from the fund.
The advantage of this route is timing. A donor may contribute to the fund in one year and recommend grants from it in later years.
Watch for these
- You cannot receive anything of value in return for a grant, such as banquet seats, auction items, or tuition.
- If you have made a pledge, mention it to your fund before recommending the grant. Funds handle pledges differently.
- Grants can take a few weeks, so begin early when timing matters.
Other ways to give
Some gifts fall outside the three primary methods above. Please contact Redeemer before taking action so the church can review the gift and provide the appropriate information.
Wills and beneficiary designations
Redeemer Bible Church can be named in a will or trust, or directly as a beneficiary of a retirement account or life insurance policy.
Real estate, vehicles, or business interests
These gifts may be possible but require review well in advance because some can involve costs or liabilities that the church needs to consider.
Have these four things ready.
Having this information on hand will make the conversation with the church office quick and easy.
Contact the church before initiating your gift.
Alyssa can provide current transfer instructions and answer questions about getting your gift to Redeemer. There is no commitment and no pressure.
Email AlyssaGeneral information for U.S. taxpayers. This is not tax, legal, or financial advice. Please speak with your own adviser before making a significant gift.