Year-End Giving Plans At Church

Many of your givers plan on making that year-end gift on the very last Sunday of the year. What many haven’t thought of this year, however, is that they may not be in one of your worship services that weekend due to holiday travel or other reasons.

year-end church giving

I anticipate there will be several who drive to your church office during that last week of the year to give that last gift in time for the 2011 tax deduction. What should you be doing to prepare for this?

A New Revenue Stream for 2011

Beginning January 1, 2011, working Americans are going to realize a 2% increase in their paychecks. As part of the extended Bush tax cut plan passed by congress in December, payroll taxes (also called FICA taxes) have been reduced from 7.65% to 5.65%.

church revenue stream

Payroll taxes go to fund Social Security (6.2% on income up to $106,800) and Medicare (1.45% with no income limit). For a person earning $106,800 in 2011, their tax savings will equal the maximum $2,136.

For those ministries who have been diligently encouraging their congregations to “step up” their giving, there is now a new source from which giving can occur. If your church is in a capital campaign season, your participants have a new pocket from which they can fulfill their financial commitments.

IRA Charitable Donations Reinstated Through 2011

Another provision under the Bush tax cut legislation involves the reinstatement of a very popular benefit for those aged 70 1/2 and older.

church giving

The provision expired at the beginning of 2010, but has now been reinstated. Here are the details that you need to share with those who are in the qualifying age bracket:

  • The provision allows someone over 70 1/2 years of age to donate up to $100,000 of their IRA assets to a charitable organization.
  • The donor’s contribution can satisfy the required minimum distribution for the year and does not have to be counted as taxable income.
  • Those who qualify to make this gift, need to seek counsel from their tax attorney or licensed financial planner for the details.

The Wall Street Journal did a nice article on this provision.

Here’s a point of URGENCY – through January 31, 2011, the donor can make a gift that still counts for 2010. This means the individual can make an IRA contribution this month that counts for 2010, then make a second contribution later this year for 2011.

Get this news out to your congregation and constituents as soon as possible!