Types of Charitable Gifts We Accept

At Greater Houston Community Foundation, we understand that meaningful philanthropy comes in many forms. Whether you’re looking to make an immediate impact, plan for future giving, or integrate charitable contributions into your comprehensive financial strategy, we accept a wide variety of gift types to help you achieve your philanthropic goals.

Our team of Philanthropic Advisors works closely with donors and their professional advisors to make sure each gift is structured to maximize both impact and potential tax advantages while supporting the causes that matter most to you.

Have questions about gift types and vehicles? We have answers. Continue reading frequently asked questions about the types of gifts we accept, or get in touch with the Community Foundation today.

What are the different types of donations I can make to Greater Houston Community Foundation?

The Community Foundation accepts many types of charitable contributions to provide maximum flexibility for your giving. We also work with you to structure your giving so that you can contribute in the way that best aligns with your financial situation and philanthropic objectives.

Immediate gifts

These contributions provide instant impact and often immediate tax benefits:

• Cash donations: The simplest and most straightforward form of charitable giving
• Publicly traded securities: Stocks, bonds, mutual funds, and ETFs that can provide even more tax benefits
• Closely held business interests: Shares of privately held companies, family businesses, or partnerships that can be donated prior to a sale, potentially eliminating capital gains tax and maximizing charitable impact
• Real estate: Residential, vacation property, undeveloped land, farmland, ranch, or commercial property with significant tax advantages
• Tangible personal property: Art, jewelry, collectibles, and other valuable items

Planned gifts

These future-oriented contributions allow you to make substantial commitments while maintaining current financial flexibility:

• Bequests through wills: Directing assets to charity upon your passing
• Beneficiary designations: Naming charitable organizations on retirement accounts and life insurance policies
• Charitable trusts: Remainder and lead trusts that provide income streams while supporting charity
• Business interests: Closely held stock, partnership interests, and other business assets

What is a qualified charitable gift and how does it differ from other donations?

A qualified charitable gift must meet specific Internal Revenue Service criteria to be eligible for tax deductions. The distinction between qualified and non-qualified donations is an important one because it significantly impacts your ability to claim charitable contribution deductions.

Some requirements for qualified charitable gifts include:

Non-qualified donations include political contributions, gifts to individuals, donations with the expectation of substantial personal benefits, and contributions to organizations without proper tax-exempt status. These donations, while they could be meaningful, do not qualify for federal tax deductions.

What are the main types of planned gifts I can include in my estate plan?

Planned giving allows you to create a lasting charitable legacy while potentially providing significant benefits to your estate. Legacy giving requires much planning and administration, but offers remarkable impact potential.

Some of the most important planned giving vehicles we utilize include the following:

• Charitable bequests involve designating specific amounts, percentages, or remainder assets to charity through your will or trust. Bequests can provide complete lifetime control over assets while also ensuring charitable impact after your passing.
• Beneficiary designations allow you to name charitable organizations as beneficiaries of retirement accounts, life insurance policies, or other financial accounts. Designating beneficiaries can bypass probate and provide immediate distribution to charities.
• Charitable trusts create structured giving arrangements that can provide income to you or your heirs while ultimately benefiting charitable causes. Trusts are powerful planning tools for complex financial situations.
• Donor advised funds can be incorporated into estate plans as recipients of bequests, providing flexibility for future generations to continue your philanthropic vision according to your wishes.

How do stock gifts and other appreciated securities benefit my charitable giving strategy?

Donating appreciated securities is one of the most tax-efficient charitable giving strategies available. Why? When you donate securities held for more than one year, you typically qualify for a charitable deduction based on their fair market value—while potentially avoiding capital gains taxes on the appreciation as well. This can be essential for utilizing highly appreciated assets that would otherwise trigger significant tax liability if sold.

This dual advantage for you can also mean increased impact for charities of your choosing. The tax benefits of charitable giving through appreciated securities often allow donors to contribute more substantially than they would with cash donations, while maintaining better overall financial positions.

What’s the difference between a planned gift vs bequest, and which is better for my situation?

While these terms are often used interchangeably, they represent different scopes of charitable planning.

• A bequest specifically refers to a gift made through your will or trust that takes effect after your death.
• Planned giving encompasses a broader category that includes bequests but also covers charitable trusts, beneficiary designations, qualified charitable distributions from retirement accounts, and other structured giving arrangements that may provide benefits during your lifetime.

See the following guide on choosing your approach.

As is always true when making large financial decisions, working with your trusted professional advisors can help you determine which approach aligns best with your financial situation, tax position, and philanthropic objectives.

The Community Foundation proudly collaborates with professional advisors to integrate complex giving frameworks seamlessly into your financial plans.

How can I use my retirement plan for charitable giving while minimizing taxes?

Retirement accounts offer unique charitable giving opportunities that can provide significant tax advantages, particularly for donors aged 70½ and older. A few important retirement account giving strategies include:

• Qualified charitable distributions allow donors aged 70½ and older to direct up to $100,000 annually from their IRA directly to qualified charities. QCDs count toward required minimum distributions, but do not count as taxable income. Although the IRS does not permit QCDs to be made to donor advised funds, you can likely make distributions to designated funds and field-of-interest funds available at Greater Houston Community Foundation.
• Direct IRA transfers can also avoid income tax on distributions while satisfying required minimums.
• Beneficiary designations from retirement accounts can eliminate income tax burden on heirs and estate tax reduction for charitable portions.
• Bunching charitable donations using retirement distributions can maximize tax benefits in specific years.

All of these strategies work particularly well as a part of comprehensive estate planning services. When all of your giving works in concert with the rest of your finances, you significantly enhance your ability to support the charitable causes that matter most to you, all while fulfilling important tax and legal obligations.

What are the tax benefits of donating real estate compared to other charitable contributions?

Real estate donations can provide some of the most significant tax advantages available in charitable giving, often exceeding benefits from other gift types—but real estate gifts involve complex and administratively taxing valuation and documentation processes.

Like other appreciated assets, when you donate appreciated real estate held for more than one year, you typically qualify for a charitable deduction equal to the property’s full fair market value while avoiding capital gains taxes on appreciation. For highly appreciated properties, this combination can result in substantial tax savings that exceed those available through cash or even securities donations.

Some of the advantages of donating real estate include:

• The elimination of capital gains tax on real estate appreciation can mean unimaginable savings over long holding periods.
• Gifting highly depreciated real estate can help avoid depreciation recapture for income tax purposes.
• Real estate gifts can help donors diversify their asset portfolios while supporting charitable causes they value.
• Real estate donations provide opportunities to support specific programmatic needs, like providing facilities for charitable organizations or generating ongoing income through rental properties transferred to charity.

A few considerations that should be made before any gift of real estate include:

• There are professional appraisal requirements for any properties valued over $5,000.
• There may be necessary environmental assessments for certain types of property.
• Deed restrictions or liens must be resolved before transfer.
• Carefully consider the timing of your donation, as real estate gifts can impact individual tax landscapes for years.
• Gifting real estate can be a highly complex process. We recommend consulting with your tax advisor for personalized advice when considering this (and all) type of gift transaction.

How do charitable remainder trusts and charitable lead trusts work with different gift types?

Charitable trusts are sophisticated giving vehicles that can accommodate a number of different asset types and provide structured benefits to charities and donors. Before we talk about how different gift types perform in trusts, let’s distinguish between the two.

• Charitable remainder trusts provide income streams to donors or designated beneficiaries for specified periods, with the remainder assets ultimately supporting charitable causes. These trusts work particularly well with appreciated assets that generate limited current income, like growth stocks or undeveloped real estate.
• Charitable lead trusts operate in reverse, providing income to charitable organizations for specified periods while ultimately transferring remaining assets to heirs. This structure proves especially valuable for wealth transfer strategies involving appreciating assets or business interests and producing sufficient income to make the trust payments

So, which assets work better in which trust? While both vehicles can accommodate most assets, there are a few patterns:

• Appreciated securities work exceptionally well in charitable remainder trusts, eliminating capital gains taxes while generating diversified income through reinvestment in balanced portfolios.
• Real estate can be contributed to charitable remainder trusts, providing liquidity through sale and reinvestment while avoiding capital gains taxes and generating steady income streams.
• Business interests may work in either trust type, though charitable lead trusts often prove more suitable for transferring appreciating business assets to heirs while supporting charitable causes.
• Cash and fixed income assets provide straightforward funding for either trust type, though the tax advantages may be less dramatic than with appreciated assets.

Greater Houston Community Foundation does not provide tax advice or services. Please consult your personal advisor with questions regarding your tax planning.

Have more questions? Call the Community Foundation at 713-333-2210 or reach out directly to get them answered. We’re standing by to help you make an impact with whichever assets you have available, on your terms.

More Helpful Articles by Greater Houston Community Foundation:

• Why Donating Appreciated Stock Makes Financial Sense
• How to Donate Shares of Privately Held Companies
• Understanding the Changes in Bifurcated Gifts
• How to Donate Business Interests Strategically
• How the Step-Up in Basis Can Maximize Your Charitable Giving

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