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Fundraising in General Planned Giving Taxes

Extend, Rejigger or Sunset the Bush Tax Cuts–Planning for Your 2010 Transformational Gift

We believe Americans are more worried than ever about the future. Some see the challenge as poor and receding growth, a steady rate of unemployment, record deficits and a sovereign debt that makes us—to some—one of the most fiscally irresponsible countries in the world. In the Social Security Board Report, retirees read that the combined trust funds will be exhausted in 2037. But what the wealthy are really worried about is the level of taxation going forward. Is your organization tracking the following and, if so, have you considered the impact for philanthropy?

  • Estate Tax:  For the incredibly wealthy who die in 2010, for example Tampa’s winter resident and former Yankee owner, George Steinbrener, their estate will pay no estate tax. However, those who die in the next year could pay a 55 percent tax on any amount in excess of $1 million—a dramatic impact on their heirs.
  • Other Taxes:  Taxes on corporate dividends are also in line to soar next year, while those on long-term capital gains will rise, but more slowly.
  • IRS & Offshore:  This week, the IRS announced it will drop its suit of UBS because the Swiss government has stepped in and said the IRS will receive information on the remaining 2,450 of UBS’s clients with assets in numbered Swiss accounts; the IRS had previously received details on 2,000 clients.
  • Fortune 500:  These companies reported more than $200 billion in uncertain tax positions—exceeding the $138 billion paid in corporate taxes last year. At least 40 companies exceeded $1 billion in such reserves:  Microsoft was $5.4 billion, Bank of America $5.2 billion, AIG $4.8 billion and Goldman Sachs $1.9 billion.

We hold no crystal ball on if the Bush tax cuts will be allowed to sunset or be made permanent, but we do know your competition, right now, is making plans and taking steps to ask your major donor for their transformational gift.

Each of the scenarios above and other donor events attract our attention all the time. For directors of development and those in major gifts and planned giving, the question is not “Will our donors consider defensive tax strategies and gift opportunities?” but rather, who among you is positioned to reap what you sow? The upcoming year end is a major opportunity to not only make public opinion catch up with reality of your service, but to insure thoughtful donors see this as an ideal opportunity to be a transformational steward for your future and to position alternatives—regardless of the action or inaction of Congress

YoungAssociates provides phone consultation on strategies and tactics, should you feel a need to talk. Contact us today to set up an appointment.