Opinion by Cynthia H. Shabb
Originally Published in the Grand Forks Herald on March 14, 2025

Over the past seven weeks, the president of the United States has signed dozens of executive orders covering a broad range of issues. The president and Congress have also engaged in other actions to cut federal funding. This has created a state of uncertainty for nonprofit organizations. Some federal grants and contracts have been paused or canceled, immediately affecting nonprofit work. There is a lack of information about current and future grants.

Over 300 nonprofit organizations contribute to the social environment in and around Grand Forks by providing countless services to the community. This includes housing, food security, health care, mental health care, social services, domestic violence services, education, immigrant integration, civic and social clubs, sports leagues, fitness centers, arts programs, environmental services, animal welfare, religious organizations, and more.

Nonprofit organizations also drive the economy by being a major employer, engaging high numbers of volunteers, and generating significant revenue for the local economy. Nonprofits pay wages, unrelated business income and other taxes, and are purchasers of goods and services.

It is important to understand the significant impact nonprofits have, not only in our local community, but also in the state. The North Dakota Association of Nonprofit Organizations (NDANO) created a statewide Sector Report in 2022. It reported that there were 3,886 nonprofits in North Dakota who employed 54,953 people, paying $2.6 billion in annual wages. 218,019 North Dakotans volunteered, contributing 15.6 million hours of services equivalent to $377.8 million. Nonprofit organizations have an incredible financial impact on both local and state levels.

The actions of the federal government are forcing nonprofit organizations in Grand Forks and the surrounding region to consider what they will do as their federal funding changes. They have already had to reduce their workforce, reduce and eliminate programs and services, and more reductions may come. Some nonprofits may even have to close their doors. This will put a heavier burden on local communities, states, private grantors, and individual donors to ensure organizations can continue to operate.

Every member of our community benefits from the work of nonprofit organizations in one way or another. It is vital to contact legislators, sharing why local nonprofits are important. Fully executed executive orders and federal funding cuts will have negative impacts on our community. Additionally, each one of us should give what we are able to support nonprofits in our area.
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Cynthia Shabb, of Grand Forks, is the executive director of the Global Friends Coalition. This letter is a collaborative effort of nonprofit organizations in the Grand Forks region who want to promote, protect and strengthen the nonprofit sector.

April 15 is right around the corner! Now is a good time to review a few basic tax principles related to charitable giving so that you’re prepared for donor conversations. Tax planning is on their minds, and you don’t want to miss an opportunity to secure a gift to your endowment fund.
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Your donors give for lots of reasons other than a tax deduction.
With taxes on the minds of so many donors this time of year, it’s important to remember that it’s not all about the tax deduction! Charitable giving is a priority for the vast majority of affluent families. Indeed, among people who own investments of $5 million or more, 91% of those surveyed reported that charitable giving is a component of their estate and financial plans. In another study, most affluent investors cited reasons for giving well beyond the possibility of a tax deduction and would not automatically reduce their giving if the charitable income tax deduction went away. During the fundraising process, be aware of donors’ non-tax motivations for giving, such as family traditions, personal experiences, and compassion for your mission.

Your donors may still default to giving cash, so you have to stay in front of them.
Many donors simply are not aware of the tax benefits of giving highly-appreciated assets to their favorite charities. Even if you feel like you say it a lot, keep saying it! Donors often forget or are in a hurry and end up writing checks and making donations with their credit cards. It’s really important to remind your donors about the benefits of donating non-cash assets such as highly-appreciated publicly-traded stock, or even complex assets (e.g., closely-held business interests and real estate).

The Community Foundation can help you work with donors to give highly-appreciated assets in lieu of cash to your endowment fund. This in turn can help donors reduce - significantly - capital gains tax exposure, and they can calculate the deduction based on the full fair market value of the gifted assets.

Your donors may not remember the basic rules of deductibility.
It’s important to know that the deductibility rules are different for donors’ gifts to a public charity (such as your endowment fund at the Community Foundation) on one hand, and their gifts to a private foundation on the other hand. Donors’ gifts to your organization directly, or to your endowment fund, are deductible up to 60% of AGI for cash gifts and 30% of AGI for gifts of other assets. Gifts to private foundations are deductible up to 30% of AGI for cash gifts and 20% of AGI for gifts of other assets. In addition, gifts to public charities of non-marketable assets such as real estate and closely-held stock typically are deductible at fair market value, while the same assets given to a private foundation are deductible at the donor’s cost basis. This difference can be enormous in terms of dollars, so make sure you let your donors know about this if they are planning a major gift.

Make it a habit to repeat the tax basics in your donor communications. This will help you grow your endowment fund not only during tax time, but also throughout the year. As always, the Community Foundation is here to help! Reach out anytime!

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

As you and your team review lists to identify potential endowment and legacy donors, it’s easy to slip into the habit of zeroing in on donors who are well-established in their careers and businesses, nearing retirement, or already retired. Of course, you’ll want to target these groups because they are likely to have the capacity to make large gifts, and they may be in a position to revise their estate plans or beneficiary designations to include your endowment fund.

But don’t stop there! Expand your endowment and legacy fundraising outreach to include not only Baby Boomers, Gen X, and Millennials, but also Gen Z. Gen Z’s philanthropic engagement defies stereotypes about short-term thinking, with 84% already supporting causes through donations, volunteering, or advocacy—demonstrating a readiness to commit to long-term impact despite their youth. Certainly their financial contributions may be smaller due to early-career stages, but their focus on social justice, climate action, and equity aligns with the legacy-building nature of planned giving.

Here are three strategies to keep in mind:

• As Gen Z donors get into the workforce, they’ll be enrolling in 401(k)s and other retirement programs through their employers. This presents an opportunity for you to educate donors early in their careers about the significant tax benefits of naming a charity as the beneficiary of their retirement plans.
• Regularly include messaging in your fundraising communications about the importance of your endowment to your mission’s sustainability for generations to come. The role your organization plays in the community’s future is an important message for Gen Z to hear repeatedly.
• Use messages that demonstrate trust and transparency because these concepts resonate particularly well with Gen Z’s values. This helps signal that your mission is worth supporting long-term, an important factor in light of Gen Z’s eagerness to plan ahead.

Proactively engaging Gen Z now will help your organization secure future revenue and build on young people’s sincere desire to make a difference. Please reach out to the Community Foundation team to discuss ways you can engage Gen Z to strengthen your endowment and legacy giving strategies.

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

The team at the Community Foundation is always happy to help you evaluate potential gifts to your endowment fund. This is especially the case when a donor proposes giving something other than cash or marketable securities.

When a donor mentions the possibility of giving real estate or closely-held stock, for example, please reach out to our team. One of the benefits of housing your endowment at the Community Foundation is that we can serve as your back office for complex gifts as well as serving as a sounding board for giving strategies in general.

One of the most important factors to remember is that valuing and accepting complex gifts like real estate and closely-held stock is not easy! The Community Foundation will help you make sure that the donor and the donor’s advisors are aware of the IRS’s rigorous requirements for securing a qualified appraisal of a complex gift. Failure to follow these rules could wipe out the otherwise excellent tax benefits to the donor. These assets are called “complex” and “hard-to-value” for a reason!

Even though complex gifts can present inherent challenges, they’re still worth pursuing. Charities that cultivate hard-to-value assets such as real estate and closely-held stock can unlock significant advantages for both their missions and their donors. Remember that unlike gifts of nonmarketable assets to a private foundation, a donor’s gift of a nonmarketable asset to your endowment fund or other public charity can qualify for a full fair market value charitable deduction, up to 30% of AGI, and also avoid capital gains tax.

What’s more, beyond real estate and closely-held stock, the Community Foundation is happy to work with you and a donor to explore gifts of other complex assets, such as cryptocurrency, NFTs, and intellectual property, which expands philanthropic opportunities for donors who are business owners and investors in alternative assets.

Keeping an eye out for opportunities to attract hard-to-value assets will help you build a resilient endowment fund at the Community Foundation while also empowering your donors to optimize their financial and philanthropic legacies. The Community Foundation helps you bridge expertise gaps, handle asset liquidation, invest the proceeds, and meet regulatory requirements so that you and your team can focus on donor relationships and impact. Please reach out to talk with our team.

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

Keeping up with an ever-evolving landscape of tax legislation can be a full-time job! Many attorneys, CPAs, and financial advisors regularly ask the Community Foundation to provide a refresher course on the potential tax changes on the horizon in 2025, especially those that might impact charitable planning techniques.

Here’s a quick rundown of three things you need to know:

• Sunsetting provisions of the Tax Cuts and Jobs Act of 2017. The TCJA’s scheduled expiration at the end of 2025 will revert key tax policies to pre-2017 levels, potentially affecting charitable giving incentives. For example, the top individual tax rate is scheduled for a bump from 37% to 39.6%, potentially increasing the benefits of charitable tax deductions for your high-income clients. At the same time, the limit for cash donations to public charities is slated to drop from 60% of AGI to 50%, reducing the deduction for some of your clients. Finally, the estate tax exemption is scheduled to drop to approximately $7 million per individual. Because the exemption would nearly be cut in half, and therefore more estates would be subject to tax, a larger subset of your clients could benefit from charitable bequests to avoid estate tax. All of this assumes, of course, that intervening legislation won’t prevent the sunset.
• Potential expansion of charitable deduction. Proposals like the Charitable Act aim to introduce a universal deduction for non-itemizers, broadening tax incentives for your clients across income levels. The bill is still popular among industry leaders and appears to have maintained momentum since it was introduced.
• Consequences remain to be seen. Above all, the 2025 “cliff” may trigger the first major tax code rewrite in decades, which in turn surely would have a ripple effect in many areas of your clients’ lives, including within the charities your clients support. Post-TCJA, for example, charitable giving dropped by as much as $20 billion, according to one study, in the wake of reduced tax benefits.

The bottom line here is that we’ve got you! The team at the Community Foundation stays on top of legal developments at the intersection of tax policy and charitable giving. We keep our fingers on the pulse of potential implications for you, your clients, and the charities they support, and we are here to help you navigate the changes.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

Chances are, you’ve already begun to notice that a major transfer of wealth is happening as your Baby Boomer clients establish financial and estate plans to pass their wealth to their Gen X and Millennial children.

The dollars involved are eye-popping. Most attorneys, financial advisors, and CPAs have seen the Cerulli study’s estimate that $124 trillion in wealth in the U.S. will transfer through 2048. The research estimates that most of this wealth - $105 trillion - will pass directly to children, grandchildren, and other heirs. And, notably, the study estimates that $18 trillion will flow to philanthropy.

As the transfer of wealth gains momentum, advisors have a major opportunity to position themselves as trusted experts who can help clients not only structure efficient lifetime and estate gifts to heirs, but also help ensure that clients’ charitable wishes are achieved. It’s crucial for advisors to know that the Community Foundation is here to help incorporate philanthropy into clients’ financial and estate plans. 

Here’s why this is so important:

• There’s a knowledge gap. Clients may not be aware of the options and benefits of charitable planning. Even many of your affluent clients may still be writing checks to their favorite charities, not realizing that gifts of appreciated stock, for example, can be more tax-efficient, and that tools at the Community Foundation, such as donor-advised funds, can be incredibly useful.
• Next-level strategies are key. Your ultra-wealthy clients will likely need to implement sophisticated strategies for transferring assets smoothly and tax-efficiently. Clients want to maximize the results of their charitable gifts while also protecting their families' interests. Leaning on the Community Foundation to help structure gifts of complex assets, such as closely-held business interests, can make a huge difference in reducing a client’s tax bill and achieving meaningful community impact.
• Legacy planning starts now. It’s tempting to put off addressing a client’s wishes to support favorite charities in an estate plan. “We’ll look at that in a few years,” is a common but less-than-ideal approach. That’s because charitable bequests are best addressed as part of a comprehensive estate and financial plan. Naming a fund at the Community Foundation as the beneficiary of a client’s IRA, for example, is an extremely tax-efficient way to accomplish charitable wishes.

Our team is here to augment your expertise in charitable giving strategies. Not only will you be better able to meet clients’ needs, but you’ll also strengthen relationships and improve client retention. Please reach out to learn more about how the Community Foundation can help your clients make a lasting impact with their wealth while achieving their financial goals.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

According to the 2023 Giving USA Report released in June 2024, charitable bequests, totaling nearly $43 billion, are up 4.8% over the previous year, keeping pace with inflation. This extraordinary generosity signals the possibility of tremendous impact in our community and in communities across the country.

We are grateful to so many of you who have chosen to leave an estate gift to the Community Foundation. Whether your will or trust includes a bequest to your fund at the Community Foundation, or whether you’ve named the Community Foundation as the beneficiary of your IRA, your gift will help improve the quality of life for people in our region for years to come.

At the Community Foundation, we’re honored to work with donors who are not only interested in leaving a legacy, but also want to maximize giving during their lifetimes. Indeed, many donors are interested in establishing a donor-advised or other type of fund at the Community Foundation for a variety of reasons:

• They want to experience the joy of seeing the results of their gifts.
• Parallel to providing financial support through their community foundation fund, many donors enjoy the opportunity to get involved, whether as a volunteer, board member, or simply an observer at site visits to charities they support.
• They want to involve their children and grandchildren in supporting favorite charities, especially by working with the Community Foundation through a family donor-advised fund.
• They like the added perk that they may be eligible for an income tax deduction for lifetime charitable gifts and that the gifted assets are no longer subject to potential future estate taxes.

Please reach out to our team. The Community Foundation would be honored to work with you as you incorporate lifetime giving into your charitable giving plan that already includes a generous and much-appreciated estate gift to the Community Foundation. Thank you for being part of the Community Foundation!

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation

Your favorite charities are grateful for your support over the years. Whether you make your gifts outright or support charities using a donor-advised or other type of fund at the Community Foundation, every gift makes a difference in the quality of life in our community.
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You may even care about your favorite charities so much that you strive to send over a donation every month throughout the year. In some cases, this works well for the charity, especially if its budget is particularly lean month-to-month or if monthly recurring donations are a priority for the charity’s public relations goals or other strategic reasons. It’s worth knowing, however, that in some situations, consolidating your gifts into a single annual donation is actually better for everyone, including the charity.

Here’s why:

Although recurring donations offer predictable cash flow for organizations, the processing fees and administrative burdens can disproportionately affect charities when donations are fragmented. By giving one substantial annual contribution to each of your favorite charities—whether personally or through your donor-advised fund at the Community Foundation—you can maximize impact while reducing operational costs for the charities.

Indeed, you might not realize the degree to which processing fees can erode small donations. Every transaction carries fixed costs, of course, regardless of size. A check, for example, can cost charities more than $3.50 to process by the time you add up bank fees, processor charges, and staff time. Even supposedly “streamlined” digital donations via credit cards and digital wallets incur fees that sometimes can add up to more than 4% of the donation amount.

As an example, a single $100 annual gift via check might cost a charity $3.61, but four $25 quarterly donations via check could result in more than $14 in processing fees--consuming more than 14% of the donated amount!

The direct costs associated with each check are just part of the expense. Nonprofits spend valuable resources reconciling accounts and managing donor records for each transaction. A single annual contribution can help reduce these often hidden costs, allowing charities to focus on mission-driven work rather than processing paperwork. This efficiency gain can be particularly crucial for small charities, which often operate with lean teams and tight budgets.

If you’re interested in shifting from monthly to annual giving and you’ve not yet established a donor-advised fund, you might consider doing so. A single contribution to your donor-advised fund each year allows you to claim an immediate tax deduction, and then in turn process an annual grant to each of the charities you’d like to support. This approach can help eliminate processing costs.

For example, if you typically give a total of $1,200 each year to your place of worship and you started providing that support in a single annual transaction, such as through your donor-advised fund, instead of writing twelve $100 checks, you could save your place of worship nearly $50 in processing costs. Plus, you’ll personally benefit from simplified record-keeping with one annual receipt for the gift to your donor-advised fund rather than tracking multiple transactions.

Whether you’re supporting local social service agencies, arts organizations, alma maters, or places of worship, consolidated giving ensures that more dollars flow directly to services rather than getting eaten up by processes and fees. What a terrific example of financial stewardship to honor both your own generosity as well as your favorite charities’ operational realities. Please reach out to the Community Foundation today to learn more about how annual consolidated giving might fit into your philanthropy plan.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

​Tax time is a great reason to review the basics! At the Community Foundation, our goal is to help make the tax aspects of your charitable giving as easy and effective as possible. If you’ve already established a donor-advised or other type of fund at the Community Foundation, or if you’re considering starting a fund in 2025, it may be helpful to scan a quick reference guide of FAQs for a few of the tax rules that apply to charitable giving.
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Where charitable giving is concerned, why does it matter whether or not I itemize my deductions?
Charitable contributions can only be deducted if you itemize your deductions. If you do your own taxes, you’ll report deductions on Schedule A of IRS Form 1040. Itemization is only available if your total deductions exceed the standard deduction. For example, for tax year 2024 (the tax return you’ll file in 2025), the standard deduction is $14,600 for single filers and $29,200 for joint filers. As you look at 2025 and beyond, check with the Community Foundation about how your donor-advised fund can help you cross the itemization threshold while still carrying out your multi-year annual giving plans to support your favorite charities.

If I use my donor-advised fund to make all of my gifts to charity, do I need receipts for all of those gifts?
No! A big advantage of organizing your giving through a donor-advised fund at the Community Foundation is that you can make a single gift of cash–or even better, appreciated stock–to your donor-advised fund, and then support your favorite charities from that fund. This means the only tax receipt you need is the one that documents your gift to the Community Foundation for your donor-advised fund.

What documentation is required for me to take a charitable deduction?
Donations over $250 require written acknowledgment from the charity. The Community Foundation provides this for gifts you make to your donor-advised fund or other type of fund. Use IRS Form 8283 for non-cash contributions valued at $500 or more. Appraisals are required for donations valued over $5,000 (such as private stock and real estate).

How much of my income can I deduct for charitable donations to the Community Foundation and other public charities?
Cash donations to public charities (including your fund at the Community Foundation) are deductible up to 60% of adjusted gross income. Donations of non-cash assets, such as appreciated stock or real estate, are deductible up to 30% of AGI. Remember that donating appreciated assets held for more than one year to a fund at the Community Foundation can avoid capital gains tax; the Community Foundation does not pay tax when it sells the asset, leaving more money in the fund to support your favorite causes than you would have if you had sold the asset and donated the cash.

What are the rules for IRA distributions to a charity?
If you’re age 70 ½ or older, you can make Qualified Charitable Distributions (QCDs), up to $108,000 in 2025, from IRAs to certain types of funds at the Community Foundation (such as designated funds or unrestricted funds, but not donor-advised funds). QCDs can satisfy your required minimum distributions.

As always, the Community Foundation is here to help you achieve your charitable goals during tax season and throughout the year as you implement a philanthropy plan that meets both your financial goals as well as your goals for making a difference in the community.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.