Biblical Stewardship Resource Library

Stewardship Ministries

CARES Act: CREATIVE CHARITABLE GIVING STRATEGIES

An extraordinary tax law was passed last year which introduced several new and potentially powerful charitable giving opportunities that have been extended for the 2021 tax year. The government threw a very small giving “bone” to taxpayers who use the standard deduction, but it has thrown higher capacity families a huge giving “bone.”

Here is a brief, general overview of the giving incentives in this new law:

For standard deduction users:

  • Extended for this year only, standard deduction users are able to take an additional $300 deduction above the standard deduction. Depending on your tax bracket, you may save between $10 and $32 dollars on your taxes because of this provision. You can see why we call this a small, giving “bone.”

For those who itemize deductions:

  • Extended for this year only, taxpayers who itemize deductions are able to deduct up to 100 percent of their adjusted gross income in charitable cash giving. Previously and again in 2022, the maximum you could deduct in your charitable giving in any year was 60 percent. But extended for 2021 only, the maximum deduction is now 100 percent. This means that with creative planning and giving, it is possible to eliminate ALL Federal Income Taxes for 2020.
  • The deduction for gifts of appreciated assets remains limited to 30 percent of your AGI.
  • The 100 percent of AGI charitable deduction is limited to cash gifts going only to public charities or to private foundations. Cash gifts to Donor Advised Funds or to Supporting Organizations are still limited to only 60%.

So, with this new temporary tax law in place, what kinds of giving opportunities does this create? Here are four giving strategies going from the least powerful to the most powerful impact. Strategy #4 is amazing for the right people!

Giving Strategy #1: If you are filing your taxes using a standard deduction, make sure that you take the additional $300 charitable giving deduction. Not much benefit, but better than nothing.

Giving Strategy #2: Instead of giving capital assets (which is usually the best thing), sell the asset and give the cash instead. For this strategy to be effective, two conditions must exist with your noncash assets:Your asset must have a very high basis, or to say it another way, must have very little gain in it. (For example, a $100,000 investment portfolio that has a $90,000 basis.)

  • Your asset must have a very high basis, or to say it another way, must have very little gain in it. (For example, a $100,000 investment portfolio that has a $90,000 basis.)
  • Your deduction for the gift is so large that you will not be able to use all the charitable deductions over the six year tax deductible period that it can be used.

Giving Strategy #3: You might want to consider “pre-giving” this year. If your annual giving is bumping against the normal 60 percent AGI limitation, you might want to consider doing your giving for future tax years this year. Giving this year means you will be able to deduct all the way up to your full AGI. This strategy can allow you to give more and not lose the charitable deductions.

Giving Strategy #4: The most compelling giving opportunity with the new tax law is for those who have IRA accounts.

  • The law prior to the CARES Act allowed for people age 70½ and above to make a direct transfer of up to $100,000 annually from their IRA accounts to a public charity without incurring any tax on the direct transfer.
  • With the new 100 percent of AGI limitation for 2020, people as young as 59½ can make direct transfers of any amount from their IRAs to charity with no taxation.
  • So, if you have accumulated a surplus in your IRA or if you will not need your IRA funds for retirement – and you wish to give them to charity – you no longer have to wait until you are 70½ to start giving it away at $100,000 a year. This year, you can give ALL of it away and impact the ministries that you most care about today. So, this year is a phenomenal opportunity for individuals with excess in their IRAs to substantially accelerate their giving.

Unfortunately, because of the economic challenges we are facing at this time, most advisors are focusing on other stimulus aspects of the new tax law, and paying little attention to these exciting Kingdom-funding opportunities that the law offers families for 2021.

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Investing with Biblical Integrity (PTS 700)

The Biblical Responsible Investment Movement

Does God care how we invest His resources? This is a profound question that few Christian advisors consider. But as stewards of His resources, it is a question that we should be compelled to ask and to answer. In this course, you will see the biblical basis for this approach and how you can incorporate it with no reduction in total investment return.

Presenter: Mark A. Minnella, CFS, CFCA, CKA

Mark Minnella is the founder and President of Integrity Investors, L.L.C., a company established to evaluate and design portfolios for discerning individuals, specializing in portfolio strategies that allow individuals to invest with integrity, aligning their investments with their individual values, principles, and Biblical Beliefs.

As a co-founder of the National Association of Christian Financial Consultants, Inc. Mark designed the first faith-based professional designation program, Christian Financial Consultant and Advisor (CFCA), in the industry. Mark served on the Board of Directors for Timothy Plan Mutual Funds, adding his guidance to the growth of the first Mutual Fund Family to screen for Biblical Values. As a host of the “More than Money” radio show, Mark has been the voice of Biblically Responsible Investing on Christian Radio for over 15 years.

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Case Study #4: The Murphy Family (PCS 400)

Greatness, Growth, Governance, Generosity

The process in this study creates Intentional Transformation for families and businesses by guiding them to discover the greatness, growth, governance and generosity in their story that will impact today, tomorrow and eternity.

The Murphy family had a business they were planning to sell.
They were in their 60s with five adult children.

Original Financial Situation:

  • The Murphy’s were in their mid 60s and had five adult children.
  • They had built a business and were planning to transition out of the business.
  • A few children were involved in the business, but none of their children wanted to run the business long-term.
  • They provided each of their children a small percentage of ownership in the business.
  • They were unsure how to best structure the sale of the business to benefit their family and minimize taxes.
  • They wanted to provide an additional lifetime inheritance for their children and grandchildren but were not sure where to start.

Original Family Impact:

  • Although the Murphy’s felt they had passed on “good values” to their children, they were not clear and there was nothing specific unifying the family toward a common purpose.
  • All of their children had married, and the family wanted to find a way to bring the in-laws into planning conversations but had no framework on where to start.
  • Some of their children were involved in the family’s business and others were not. A potential business sale was straining the family’s dynamic.
  • There was a desire to be more generous but little clarity around how the family could make an impact together.
  • The Murphy’s desired to have more feedback from their children on their plans but had not established an avenue to facilitate these conversations.

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Case Study #4: The Murphy Family (PCS 400)

Case Study #3: The Patterson Family (PCS 300)

Greatness, Growth, Governance, Generosity

The process in this study creates Intentional Transformation for families and businesses by guiding them to discover the greatness, growth, governance and generosity in their story that will impact today, tomorrow and eternity.

The Patterson family owned a rapidly growing business.
They were a couple in their 40s with two children in their early teens.

Original Financial Situation:

  • The couple had basic legal documents that provide their children their entire estate at death.
  • They did not have any plans for a lifetime inheritance.
  • They owned a business that was growing rapidly and were considering exiting the business within the next five to 10 years.
  • They had a two business loans and a mortgage totaling 12 percent of their assets.

Original Family Impact:

  • Although the Patterson’s had good values, they weren‘t sure how to intentionally pass them on to their children.
  • There was nothing specific that could unify the family toward a common purpose.
  • There was a desire to be more generous but little clarity around the impact the family could make and how to do it together.
  • The Patterson’s desired to have more feedback from their children on their plans but were unclear on how to facilitate these conversations.

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Case Study: #3 The Patterson Family (PCS 300)

Psalm 37:25

THE OUTWARD LIFE OF A STEWARD
Dependence

I have been young and now I am old, Yet I have not seen the righteous forsaken Or his descendants begging bread.

David encourages the poor in Psalm 37:25 when he says, I have been young and now I am old, Yet I have not seen the righteous forsaken Or his descendants begging bread (NASB1995). Here’s a question, “Would you trust God more if He provided you with substantial surplus resources, or if He left you not knowing where your next meal is coming from?” You might think the person who has received an abundance would trust God the more, but often these believers have more trouble trusting in God because they have inadvertently placed their trust in their provisions instead of in their Provider. People with an abundance must ask, “Am I going to trust in God or in my stuff?” One without an abundance can only ask, “Am I going to trust in God?” Where is your trust? Think about it.

Proverbs 11:28

THE INWARD LIFE OF A STEWARD
Viewing & Handling Possessions

He who trusts in his riches will fall.

Too often, we look at what we have accumulated and find a certain level of security in it. Our fallen natures earnestly want to trust in what we can get our hands on — so we save, invest, and accumulate! But Solomon understood the pure folly of this thinking and wisely shared in Proverbs 11:28, He who trusts in his riches will fall (NASB1995). Whenever we put our trust in the provisions instead of the Provider, we are heading into dangerous territory. If you do not believe you struggle with misplaced trust, would you be willing to pray this prayer? “Lord, take anything and everything in my life away from me if it is getting in the way of me wholly trusting in You and You alone.” Think about it.

Psalm 49: 16-17

THE INWARD LIFE OF A STEWARD
Viewing & Handling Possessions

Do not be overawed when others grow rich, when the splendor of their houses increases; for they will take nothing with them when they die, their splendor will not descend with them.

Materialism is alive and well in America. Nothing makes a person more impressive to others than an abundance of riches. Psalm 49:16-17, however, offers us a sobering reminder of the folly of being wowed by wealth. It says, Do not be overawed when others grow rich, when the splendor of their houses increases; for they will take nothing with them when they die, their splendor will not descend with them (NIV). We all exit this life the same way we arrived — with nothing. No matter how much someone accumulates on earth, we all end up with the same balance sheet the day after we finish this life. How can you avoid this overly-impressed-with-wealth temptation? Focus your mind on living in eternity and not this present life. Think about it.

Luke 18:24-25

THE INWARD LIFE OF A STEWARD
Viewing and Handling Possessions

How hard it is for those who are wealthy to enter the kingdom of God! For it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.

Jesus tells us in Luke 18:24-25, How hard it is for those who are wealthy to enter the kingdom of God! For it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God (NASB1995). Why is it so hard for those with a surplus to find the Lord? It is not what a man does with his wealth that keeps him from the Lord, it is what his wealth does to him. When you possess abundant surplus, you will put your trust in your provisions and not in the Provider. And you don’t have to be very affluent for this deception to take hold in your life. It’s okay to have possessions, just don’t let your possessions have you. Think about it.

Matthew 19:21

THE INWARD LIFE OF A STEWARD
Viewing and Handling Possessions

If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.

Jesus encountered a rich, young ruler who was seeking eternal life. In Matthew 19:21, Jesus gives him his final directive by saying, If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me (NIV). Notice, Jesus did not ask the young man to give up his possessions forever; He simply told him to send them on ahead, to enjoy later — you will have treasure in heaven. Jesus makes it clear that we need to focus on spiritual matters right now, and the burden of managing your wealth can get in the way of this. Unfortunately, the ruler was unwilling to send his assets on ahead. As a result, he missed an opportunity to walk with Jesus. Has that ever happened to you? Think about it.

Matthew 16:26

THE INWARD LIFE OF A STEWARD
Viewing and Handling Possessions

For what will it profit a man if he gains the whole world and forfeits his soul? Or what will a man give in exchange for his soul?

We all have read Matthew 16:26 which says, For what will it profit a man if he gains the whole world and forfeits his soul? Or what will a man give in exchange for his soul (NASB1995)? We might think how foolish someone would have to be to put material things ahead of a saving relationship with God. But, I have, on occasion, examined my own personal affection for acquiring material things, coupled with my unwillingness to use them to serve and bless others and to advance His Kingdom, and I am not so sure that there isn’t something in me that loves the things of this world more than I love the One who created it. I wonder, in your more honest moments, might this be a bit true of you too? Think about it.