Trends Worth Watching

​The team at the Community Foundation is committed to keeping an eye out for trends and developments that impact charitable giving and your ability to raise funds for your organization’s mission.  
 
Here are three developments you'll want to track: 

• Although you and your donors certainly anticipate that your organization will thrive for years to come, there is no crystal ball. Sometimes, the unexpected happens and the viability of a nonprofit organization is threatened or called into question. It is especially important to consider these issues when planning for large endowment gifts. That’s why so many nonprofit organizations consult the Community Foundation about how to structure donors’ endowment gifts to ensure that the mission is served, regardless of what might happen to a particular entity. Please reach out as you work with your donors on major bequests. We can help ensure that both the donor’s intent and your mission are served across generations. 
• Be prepared to help donors with planning issues to address the anticipated changes to the estate tax exemption at the end of next year. The estate tax exemption is the total amount a taxpayer can leave to family and other individuals during their life and at death before the hefty federal gift and estate tax kicks in–is scheduled to drop, rather precipitously, after December 25, 2025. For 2024, the estate tax exemption is $13.61 million per individual, or $27.22 million per married couple, an increase over 2023 thanks to adjustments for inflation. Later this year, the IRS will issue inflation adjustments for 2025. For 2026, without legislation to prevent it, the exemption is scheduled to fall back to 2017 levels, adjusted for inflation, which would roughly total $7 million per person. That is quite a drop! This means a lot more people – including many of your donors – could be subject to estate tax in the not-too-distant future. The team at the Community Foundation is happy to help develop strategies for maximizing endowment gifts as the sunset draws near. Please reach out! 
• You’ll want to pay attention to the latest fundraising statistics, simply to be aware of what’s going on in the nonprofit sector overall. For example, while the number of new donors is up, donor retention rates continue to suffer. This does not need to be the case, however, for your organization; strong donor stewardship practices can significantly increase donor retention and even increase large gifts to your endowment. Please reach out to the Community Foundation for ideas on how to grow your endowment fund.

 
Thank you, as always, for the opportunity to work together! It is our honor to be your partner in philanthropy and community impact.  

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