Why give grain instead of cash?
What does it cost to give grain?
Does the IRS allow giving grain in this way?
Will I receive a tax receipt for my gift of grain?
Will giving grain effect my FSA / crop insurance production record?
How do I explain this to my grain buyer?
Why give grain instead of cash?
- Donated grain is not recorded as income; so you may save all or some of the following taxes:
- Self-employment taxes of approximately 15% .
- State and county taxes of approximately 5% (depending tax rates.)
- Federal income taxes (for those who do not itemize deductions.)
The total tax saving can be substantial. (See example #1)
- You can "prepay" your giving. The gifts you make into a Donor Advised Fund may be held in the fund for years. So, you can give today (perhaps to level income for tax purposes) and grant the money later.
- You may avoid costly tax deduction phase-outs. Some tax benefits are taken away at higher levels of adjusted gross income (AGI). These benefits are retained when you give grain rather than cash. The savings could be even more than the gift.
- You may receive additional tax benefits. IRS rules limit deductions to 50% of your AGI. (The percentage is 10% for C-corporations.) Since the donated grain is not reported as income, by giving grain rather than cash, you can, in effect, give more and save more taxes than those limits allow. This is helpful either if you are especially generous or if you wish to “prepay” your donations in a given year. (See example #2)
- The grain you give will not count as income in your government payments limitation caps calculations. If you are a high earning famer, please contact us for more details. You may be able to effectively redirect significant sums of money from the government to causes you would rather support.
What does it cost to give grain?
We charge nothing for processing gifts of grain. Neither do we charge any fees for funds with balances of under $50,000. Our mission is to help people give more effectively to their favorite causes.
Donor Advised Funds with balances over $50,000 are invested, with advice from the donor. Earnings on investments are returning to the donor advised fund for the donor to distribute. On these funds, a 1% annual fee (pro-rated monthly) is applied to offset costs.
At the donor’s discretion, the donor may contribute a portion of the tax savings (a suggested 3 - 5% of the gift amount) to the Foundation for Christian Stewardship, to be used to help others to be more effective in their giving. (top)
A Donor Advised Fund is, in effect, your private foundation. As the name implies, money and assets are placed into the fund until you, the advisor, recommend grants to your favorite charities. The National Christian Foundation (NCF), the trustee of the funds on your behalf, will send money per your recommendation, so long as the mission of the organization is not against biblical principles. (Click here for a graphic illustration of how the Donor Advised Fund works for giving grain)
Making grants to your church or charity is fast and easy. You simply log into your account on our website and recommend a grant. The entire process takes less than 30 seconds. Open a Donor Advised Fund.
NCF is a qualified 501c3 charitable organization; therefore, donations to an NCF Donor Advised Fund (made through the NCF affiliate, the Foundation for Christian Stewardship) are qualified donations for tax purposes. (top)
Why use a Donor Advised Fund? Why not give grain directly to a church or charity?
Control. You recommend grants from your Donor Advised Fund.
Simplicity. One transfer of grain can be distributed many ways and at many and different times. The money remains in the fund until you direct where it is to go: to your church, a ministry or other charitable organization of your choice.
Regularity. Your donor fund can be set to automatically send, for example, a monthly check to your church or charity.
Anonymity. Grants may, if you wish, be made anonymously from your donor advised fund.
Tax Planning. Just as you prepay your input costs, you may wish to prepay your giving. With a donor fund, you can give now and pay out later, even over a period of years.
Flexibiliy How you use your Donor Advised Fund will vary from year to year, depending upon your income and your giving goals. Your Donor Advised Fund will be there to help you give more effectively - year after year, no matter the circumstances. (top)
Does the IRS allow the giving of grain in this way?
Yes. You will find the IRS rules governing these transactions in Treasury Regulation 1.170A-1(c) (4) [example 5], (See here and here for more details.) Click here for confirmation by tax professionals. (top)
No. The IRS ruling (Example 5 mentioned above) was made in 1970; so, the IRS code has allowed this type of transaction for decades. The National Christian Foundation has been handling such transaction since 1982. This is a well-worn path for charitable giving. (top)
Will I receive a tax receipt for my gift?
You will receive an acknowledgement and the money will be placed into your Donor Advised Fund. You will need no tax receipt since you will have recorded no taxable income on the donated grain. You also will have online access to your Donor Advised Fund, including balance information, contributions and grants made to and from the fund. (top)
Will giving grain effect my FSA / crop insurance production records?
No. Your grain buyer will credit your farm’s production as usual. Giving the grain is similar, for example, to allocating production to the various owners of a farm. (top)
It’s this easy:
1) Ask your buyer to create an account in the name of:
Foundation for Christian Stewardship
301 Hollowood Drive
West Lafayette, Indiana 479062) Transfer or deposit grain to that account. ($1,000 min. value)
3) Tell us of your gift at (765) 807-2810 or info@giftsofgrain.org
The Foundation for Christian Stewardship will promptly sell the grain and deposit the funds into your Donor Advised Fund with the National Christian Foundation, the parent organization of FCS. You will be the advisor for that fund. You may set up your Donor Advised Fund either before or after you transfer the grain.
It takes about 10 minutes to open a Donor Advised Fund. From this fund, you will direct money to your preferred charities or church. Set it up once and you can use it for all your giving for years to come. (top)
It really is that easy.
How do I explain this to my grain buyer?
Click here and print the page or email it to your grain buyer.
If you or your tax advisor need more information about this program or about the Foundation for Christian Stewardship, visit our website at www.fcsfunds.org or contact Kevin at (765) 807-2810 or info@giftsofgrain.org. (top)
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