STRATEGIC GIVING & INVESTING FOR THE GOD-INSPIRED
HOPES, DREAMS, AND NEEDS OF NORTH POINTE CHURCH
STRATEGIC GIVING & INVESTING FOR THE GOD-INSPIRED
At its core an endowment fund is an organization’s long-term savings strategy. It’s an investment account that can grow over time and make distributions for the needs of the organization. North Pointe’s Endowment Fund is managed by an outside company that specializes in managing investments for churches, charities, and universities. A portion of North Pointe’s Endowment Fund is invested in a conservative portfolio for short-term needs with the balance invested in a moderate portfolio for long-term needs, mirroring how we as individuals should be investing. In addition to being an investment, the Endowment Fund allows complimentary access to attorneys and gift planners who can aid the donor in charitable tax saving strategies.
Endowment funds can be used for anything that is in alignment with the endowment statement created when the endowment is established. Church endowments have been used when there are needs or dreams of the church that cannot be funded by the annual general budget. Historically, a capital campaign is used to raise the funds needed. In lieu of a capital campaign or in addition to a capital campaign, the endowment funds could be used to meet this need or dream. Examples include large building repairs such as a new roof, providing additional funding to a ministry area of North Pointe that is dynamically growing fruit, paying the mortgage of a failing church in an inner city in hopes of revitalizing not only the church but the inner city, or purchasing another orphanage in the Dominican Republic.
The original investment came from the offerings of North Pointe attendees. Like our own personal financial plan, NPC saves a portion of the offering. A portion of the accumulated savings was used to start the Endowment Fund. The Endowment Fund is fully liquid, meaning there are no penalties for taking any or all of the Endowment Fund if needed. However, the goal of the Endowment Fund is to address the long-term hopes, dreams and needs of our church, so with God’s continued provision the desire is to allow it to grow.
Through prayer and obedience of His people. The Endowment Fund can receive cash donations above your normal giving as well as the proceeds from a multitude of charitable tax saving strategies discussed below.
Just like the current offerings have oversight through the Stewardship Committee, there is an Endowment Committee who determines how the dollars in the Endowment Fund are invested and distributed.
Charitable Tax Saving Strategies
Small Business Owner and/or 1099 Income
Lower your taxable income by making a cash donation to North Pointe’s Endowment Fund to receive a charitable tax deduction equal to the cash donation.
Qualified Charitable Distributions
If you are 70 ½ or older and own an IRA or an Inherited IRA, you can do a Qualified Charitable Distribution (QCD). You cannot do a QCD from a 401K/403B/457, but you can transfer those types of accounts to an IRA to take advantage of a QCD. A QCD is when you take a withdrawal from your IRA and send it directly to North Pointe or other charity, making it non-taxable. If you make an IRA withdrawal but send it to your bank account and then to NPC, it is taxable, so the key is having the Custodian of your IRA send it directly to North Pointe. Under current tax law, at age 72 you are required to start taking money out of your 401K, 403B, 457 and/or IRA. This amount is your Required Minimum Distribution (RMD). A QCD counts as your RMD. You can do a QCD every year and up to $100,000 per year. Some other ways we can use a QCD is to purchase life insurance to leverage your IRA dollars for a larger Kingdom impact. Your QCD pays a premium on a life insurance policy where the death benefit goes to North Pointe. An example of this concept: Let’s say you have a $500,000 IRA and you determine “your enough” for this IRA is $250,000. You are going to spend $250,000 and you want to give away the other $250,000. On an annual basis you take a QCD of $12,500. This $12,500 then purchases a life insurance policy with a death benefit of $400,000. When you pass away, NPC receives the $250,000 IRA and the $400,000 Life Insurance for a total gift to North Pointe Church of $650,000! What kind of Kingdom Impact could occur with that type of gift?
Do you own stocks, bonds, mutual funds, and or exchange traded funds that are subject to capital gains and have appreciated over time? If you gift these assets to NPC, you will not pay capital gains tax and may receive a charitable tax deduction equal to 30% of your adjusted gross income. Appreciated property, like your primary residence, a vacation home, office space, etc. can also be gifted to North Pointe Church and you will not pay capital gains tax and may receive a charitable tax deduction equal to 30% of your adjusted gross income. Basically, anything that has appreciated in value can be gifted to NPC and you will not pay taxes on the appreciation.
Gift a portion of your inheritance to NPC and receive a charitable tax deduction that may help in the taxes you incur on your inheritance.
Giving In Perpetuity
A strategic way to continue your annual giving amount to North Pointe Church after your earthly life ends.
Naming North Pointe Church as a beneficiary on your bank accounts, investment accounts, real estate, and/or life insurance, leaving the total value or portion to NPC. This is the easiest strategy to implement because all you need to do is complete beneficiary change forms with the companies who hold your accounts.
For more information, please contact:
Peter Uhl, North Pointe Church
Ben Boline, Sr. Gift Planner at Thrivent Charitable
Steve Miller, Financial Advisor