Posts Tagged ‘Tax advantages’
The Powerball Winner: Sharing in Good Fortune
Posted by JBA in JBA News & Notes, Uncategorized on January 30th, 2012
By Jennifer Furla
Executive Vice President
Recently, a convenience store customer in Minnesota won the Powerball – at $229 million. While the lucky winner had not yet revealed himself, accompanying the story was the ubiquitous security cam picture of the transaction that suggests it was a 30-something male. The winner has one year to present him/herself and can take the winnings in installments over a 30-year period, or take a lump sum of $123 million.
As fundraisers, we often dream of finding that lottery winner among our donor prospect pool. With strong values of giving, I suspect that many of us dream of what we would do if we were to purchase that winning ticket? In our house, we’ve talked about it as a family. Give to our favorite causes. In my case, possibly help complete a campaign goal for a lucky client?
For this week’s winner, $123 million after taxes — even invested in simple CDs at 1.55% — will generate some $600,000-plus per year.
I met a lottery winner not long ago. Sitting on the wharf outside our hotel for the Giving Institute and International AFP Conference in Baltimore, I struck up a conversation with a gentleman who sidled up to me with his family, all dressed in matching athletic suits. Turns out they were in town for the man to receive medical treatment for a highly complex medical condition at Johns Hopkins University.
He talked about winning $150 million in the Canadian Lottery. He was from Ottawa, on the western side of the country and was among the First Nations peoples of Canada – the native, aboriginal peoples, akin to the American Indian.
He talked about how it changed his life and his family’s. In Canada, he said, all winnings are immediately paid out, lump sum and tax free to the winner. He purchased a new home for his family. He paid to fix up the homes of near relatives. Of course, took a couple of once-in-a-lifetime, memory-making trips (to Disneyworld in Orlando, if I recall correctly). His good fortune was paying for the trip and treatment at Johns Hopkins.
Then there was charity. He built schools for the children of his Indian Nation and endowed those schools so they could maintain the new buildings and populate them with programs and staff. He established a Trust that will provide scholarships for the youth of the Nation. He made a large gift to the Tribal Council to help families in need.
At the hotel, he became interested in another conference that was taking place there – for families of children of autism. “How could he help, he asked?” He understood what was “enough” for his family and him and wanted to share his good fortune.
I do not know if the connections he made that day resulted in support for the autism group, but can only imagine the number of causes this man and his family have since sought to help – and will in the future. For us in the profession, this lottery winner serves as an example of unselfish philanthropy – love of brother.
As my son would say, “Now, those are real heroes. People like that.”
Rolling Over an IRA: A Terrific Year-end Opportunity
Posted by JBA in Donor Cultivation, Legal, Legislative & Tax, Stewardship on December 17th, 2009
I recently returned from a visit with a client in New Hampshire where I was informed that a donor had recently made a second gift to the capital campaign for $50,000 and did so through an IRA Rollover. You may still have time to share this terrific opportunity with a select group of your prospects and generate a lovely gift for your organization.
As you may have heard, The Emergency Economic Stabilization Act of 2008 included a provision that extended the availability of the IRA Rollover through December 31, 2009. This inclusion, included in the Pension Protection Act of 2006, had previously expired at the end of 2007 but was extended by then President Bush.
Here are the details
The IRA Rollover allows individuals who are at least 70-1/2 to make tax-free distributions of up to $100,000 from an IRA to their favorite charity, subject to the following qualifications:
- The donor must be 70-1/2 or older at the time of distribution.
- Limited to $100,000 per taxpayer, per year. A married couple can donate up to $200,000 provided each spouse owns at least one IRA and can make a qualified charitable distribution of $100,000 from their plans.
- Gifts must be outright. The contributions cannot be used to fund gift annuities or charitable remainder trusts
- Applies only to IRA’s, not other forms of retirement plans such as 401(k), 403(b), etc.
- Gifts cannot be made to donor advised funds and supporting organizations, including most private foundations.
- Gifts must be made directly from the IRA to the charity.