Ways to give to Redeemer
Redeemer Classical School is a non-profit 501(c)(3) organization; therefore, all contributions to the school are tax-deductible. Still, you have options when giving to Redeemer, and some of them may better suit your unique financial profile and goals than others. Below you’ll find some alternatives for you to consider.
the Virginia Educational Improvement Scholarship Tax Credit Program
The Virginia Educational Improvement Scholarship Tax Credit Program (EISTCP) offers a 65% state tax credit on top of current state and federal tax deductions for donations (either monetary or securities) to nonprofits that, in turn, provide scholarships to private schools. Redeemer currently receives scholarship money for eligible students from EISTCP gifts that are given through The Community Foundation of Harrisonburg and Rockingham County. Through this program a gift of $1,000 would only cost you a net $229 (after tax deduction benefits), and Redeemer would get the full $1,000.
Stocks, Mutual Funds, and other Securities
When you donate stocks, mutual funds, and/or other securities to Redeemer Classical School you receive a tax-deduction for the full fair market value, and you avoid paying capital gains taxes. This allows you to give a greater amount to the school and, therefore, receive a greater tax-deduction.
Crypto-currency
Cryptocurrency donations are unique in terms of US tax classification. When you donate cryptocurrency, the IRS classifies the gift as property, which means it is not subject to capital gains tax. So you can minimize your tax obligations while also supporting Redeemer.
Unneeded Life Insurance
Gifting an unneeded life insurance policy is another great way to give that has some surprising benefits. Certain policies allow you to leverage your investment to yield a greater gift to Redeemer, provide tax-deductions, reduce the estate tax burden on your family while avoiding the taxes associated with simply cancelling such a policy.
Here’s an example: let’s say you paid $80,000 over the years into a whole life insurance policy that has cash value of $100,000 and a death benefit of $250,000. By transferring this policy to Redeemer you are able to turn your $80,000 investment into a $250,000 gift. In doing so you receive a tax-deduction for the $80,000 that you’ve invested. If you continue paying the premiums on the policy by means of gifts to the school, those are tax deductible each year.
Make Redeemer a Beneficiary of Your Retirement Account
When you make Redeemer Classical School the beneficiary, whether in part or in whole, of your retirement account you increase the impact of your gift because the school does not have to pay taxes on your donation. At the same time you decrease the estate tax burden on your family, effectively increasing the amount that they are able to keep.
use your RMD for charitable giving
If you are over the age of 70 ½, the government requires you to take annual distributions from your IRA (this is called a required minimum distribution, RMD). Did you know these distributions are taxable to you, but may be made tax-free as long as they are directed to a 501(c)(3) like Redeemer? (This option is known as the qualified charitable distribution, QCD.)
As you can see, there are many different ways to give to Redeemer Classical School. Please consult with your tax advisor or financial planner if you have any questions, or contact us and we’ll be happy to help you.