MSU President's Column for Traill County Tribune
December 22, 2018
‘Tis the season of giving
During this season of giving, there are folks from our local area, the region, and across the country who give generously to help us fulfill our mission. I am inspired by our many alumni and friends who support our efforts to help students at Mayville State University. I wish you could see the looks on the students’ faces when they learn they will be receiving scholarship assistance. We have so many to thank for this.
One way of saying thanks is to help our benefactors to take advantage of some of the great ways to give that are available. At year-end, it’s nice to know that your giving can help your own financial situation too. I encourage you to visit with John Klocke, MSU Foundation executive director, and to glean from his 27 years of experience and special philanthropy training. John knows how to make your giving go further and help your tax situation too. I’m going to share a few of the highlights John has shared with me. I hope they will be helpful to your family as you make giving decisions for your favorite charities. Do know that we’d love to partner with you this year.
First, the North Dakota Endowment Credit is still available to any individual, couple, or business that pays North Dakota income tax. You don’t have to be a North Dakota resident, but you must have income in North Dakota that is subject to North Dakota income tax. Any individual can give a minimum gift of $5,000 and up to $25,000 per year ($50,000 for a married couple filing jointly or a business) to a qualified endowment and receive a 40% tax credit on the value of the gift. If you can’t use the whole credit in one year, you can carry over the balance of the credit for an additional five years. This credit greatly reduces the out-of-pocket cost of your gift. Your tax adviser can tell you if this is a good option for you. Even with the new tax reform, there is great value to using this tool. Someone making a gift of $5,000 to an endowment will get the tax credit and may also get a federal tax deduction. The average person making this gift may pay less than $2,000 out-of-pocket to make the $5,000 gift because of the state and federal tax savings.
Another great giving tool for anyone 70 and a half years old or older is the IRA charitable gift. This is now a permanent law enacted by Congress and allows anyone of this age to make a charitable gift up to $100,000 a year from an IRA. This individual will not pay any income tax on the gift amount. The individual can also count the gift amount toward their annual required minimum distribution. Each person of a married couple can make a gift like this. Mr. Klocke says lots of folks are taking advantage of this charitable rollover. If you want to make a gift in this way, simply contact your IRA fund custodian to fill out the proper form, or contact the MSU Foundation for more information.
Another tool is a combination of taking an IRA gift amount out and then directing that gift into a qualified endowment fund at the MSU Foundation. If the IRA gift is $5,000 or more, it can also generate the endowment credit on your state income taxes, though it will not generate a federal deduction in that case.
If you have stock investments, even in this sometimes volatile market, you may have stock that is highly appreciated. You can gift shares of a highly appreciated stock. You will not only get a federal and state tax deduction, but you will avoid any capital gains tax on the appreciation in the stock. Combine that with the endowment credit and again you have some real benefits in your giving.
For farmers of the community, it is good to remember that gifts of grain in the bin have long been used as a giving option. Making a charitable gift of a grain slip can be used just like any cash and may have some other tax advantages based on the costs to produce the grain. Ownership gifts of cattle also work in the same way. Talk to your accountant or tax person for specifics.
Last, but not least, you may talk with Mr. Klocke about planned gifts. He is well-versed in all of the common planned gift tools. A planned gift is gifting an asset like cash, stock, land, or another appraisable/saleable asset and exchange it with a foundation like ours in trade for increased lifetime retirement income and tax benefits that are very attractive. You and your family get the benefits during your lifetime, and at the end of your life, the balance of the gift passes to charity. Planned gifts can work well for our friends who are 55 years old and older.
One planned gift we received this year is the gift of life insurance. Our good friends at Thrivent Financial helped make this gift possible. If you have a paid-up life insurance policy that is no longer needed for your estate, you can transfer that policy to the MSU Foundation and get a tax deduction for the value of the policy.
I hope some of these types of gifting might be of benefit to you. Certainly call John Klocke at 701-788-4787 if you would like more information.
Those donors who have enjoyed getting a challenge fund match on past endowment and annual scholarship gifts are encouraged to stay tuned as we head into another legislative session. We have exhausted the $200,000 given this biennium, thanks to all who gave to our scholarship needs. Next year, the governor and the legislature seem to be indicating they are open to continuing this program. It would be a huge benefit to Mayville State if they did. We have been able to grow endowment funds dramatically because of the challenge match program. If you have benefited from this program, tell your legislative representative THANK YOU!
We are truly grateful to all alumni and friends in our area and across the country who have been so generous with Mayville State. May you be richly blessed. On behalf of all of the students whose lives have been changed because of your giving, thank you very much!