On Jan 2., President Barack Obama signed the American Taxpayer Relief Act of 2013, passed by Congress to avoid a financial “fiscal cliff.” Charitable organizations, such as Hillsdale College, are taking advantage of one provision that allows for more outright gifts from individual donors.
Because this extension is time-sensitive, the Hillsdale College’s Office of Institutional Advancement, under the direction of John Cervini, spearheaded a new effort to communicate this information with donors. This provision allows anyone over the age of 70 to make tax-free donations up to $100,000 per taxpayer per year from their individual retirement accounts to qualified charities.
Carolyn Fanning, the college’s gift and estate planning counselor, explained that the extension of this provision was essential in answering outstanding tax questions that have had a significant bearing on the majority of supporters of Hillsdale.
The college is currently mailing out 90,000 letters to inform past IRA donors of the provision, Fanning said.
“It is a very quick turnaround,” she said. “We were right on top of informing them of this extension in the event that they wanted to make another gift.”
A large amount of federal income tax codes were set to expire at the end of 2012. The majority of the tax cuts were enacted under President George W. Bush in 2001 and 2003. If no action was taken, many of the tax provisions would revert to pre-2001 law, restricting tax-free IRA donations.
“This extension extended an area of assets that had previously not been used to make charitable gifts,” Fanning said. “It is a wonderful opportunity for the college – the only problem is that it is only good for 2013.”
According to Fanning, a significant amount of donors have responded to the outreach, taking advantage of this new extension. Fanning attributes the continued generosity of Hillsdale’s supporters to the increasing concerns of a growing government that increases its confiscation of individual wealth through taxation.
“The more people learn about Hillsdale, the more they become committed to the college’s mission,” Fanning said.
“The tax benefits are nice,” Fanning continued. “the financial benefits are great, but they are ancillary to that heartfelt dedication to what Hillsdale is all about.”
