It stands to reason, as an investment professional, that you are mindful of maximizing all of your clients’ investments, even their charitable ones, right?
I recently attended an event to learn more about these investment options and spoke about their importance with Dr. Douglas Jackson, president and CEO of Centennial, Colo.-based Project C.U.R.E., an international volunteer aid organization which collects and distributes medical supplies and equipment to needy people in developing nations.
Dr. Jackson, an attorney who holds both a Juris Doctorate and a Ph.D. in Finance, reported, “A good financial planner will work to maximize the return on their clients’ portfolios, and achieve the investment objectives of these clients. The same should be said for their charitable investments. Financial planners have a critical role in guiding their clients to achieve a maximum return on their charitable investments, and realizing their objectives in a ‘Giving Portfolio.’”
Dr. Jackson says it’s a big business to consider. “There are currently over 1 million nonprofits, and with the growth of the nonprofit sector, the increasing sophistication of nonprofit operational models and the importance of private philanthropy, this is an area of increasing potential for those financial managers who are alert to changing trends and eager to help their clients in new avenues of investment.”
With that said, it brings forth discussion of the new law that allows for tax-free giving from IRAs – the Pension Protection Act of 2006. The new law includes a charitable giving provision that permits new tax-free distributions from IRAs, known as the charitable IRA rollover. It provides an exclusion from gross income for certain distributions of up to $100,000 from an individual retirement account (traditional or Roth), which would otherwise be considered taxable income. To qualify, the charitable gift must be made to a tax-exempt organization.