AUGUST 2010www.cfneia.org

GivingCreativeCommunity Foundation of Northeast Iowa

For good. For ever. Community Foundation of Northeast Iowa: Creative Giving, AUGUST 2010

You may know that starting in 2010, individuals with income above $100,000 can now convert their traditional IRAs to Roth IRAs.

Your clients who take advantage of this opportunity to create a source of tax-free income for their retirement years may pay significant tax when they make the conversion this year.

Offsetting Roth IRA conversion taxable income by making a major charitable gift may be worth considering for community-minded individuals. Timing a charitable gift to coincide with a Roth conversion may allow them to remain in a lower tax bracket and receive a sizeable deduction—while establishing their philanthropic legacy.

The Community Foundation of Northeast Iowa welcomes your questions and ideas on this opportunity to combine a smart tax strategy with community good.

For example, your client may want to establish a Donor Advised

Fund this year and recommend grants to causes he or she cares about for years to come. You may know other clients who plan to make charitable gifts through their estate… but can now experience the joy of giving during their lifetime.

The Community Foundation of Northeast Iowa can answer any questions you have about our services and helping your clients help the community. Call us at (319) 287-9106.

High earners can convert to Roth IRA in 2010

A professional’s perspective... “My work with the Community Foundation of Northeast Iowa

broadens my connections to the community at large and allows me

to become more involved.”~ Heather Gunderson,

CPA in Black Hawk County

large, non-liquid assets. They may want to avoid certain taxes, or seek to find a way to increase their spendable income. Some clients may be focused on their children, but when they are assured they have enough for retirement and their children’s needs, they consider giving back to the community.

Rewards of giving.Your local community foundation allows people to create a personal philanthropic fund suited to their needs and interests. As donors will attest, establishing a fund within their community foundation is a deeply rewarding experience.

Plus, donors are eligible for a 25% Endow Iowa state tax credit for gifts to endowment funds at community foundations in Iowa that meet national standards, like the Community Foundation of Northeast Iowa. This credit is in addition to the normal federal deductions for charitable gifts!

A concern for quality of life.Many professional advisors find their clients are interested in philanthropy in their community because they care about the quality of life that surrounds them, their family, their peers, their customers, and their friends. People want to be asked what matters to them in society. They want to be encouraged in their vision of what they can achieve as community-minded individuals, and supported in their desire to contribute to what is good in their community.

Options in charitable giving.While many donors choose to endow a fund through a bequest, others choose lifetime planned giving vehicles to achieve their philanthropic goals. Whichever means they choose, their community foundation provides a direct link between personal giving and local grantmaking. Plus, gifts to the foundation can be permanent—part of a perpetual endowment that continues to grow. The income is used to support local charitable programs and projects according to the donor’s wishes.

Reasons for giving.There are many different financial motives for charitable giving. Clients may have a highly appreciated stock portfolio or a few,

Regular Income $200,000 $200,000Roth IRA Conversion 100,000 100,000Normal Deductions (11,400) (11,400)Charitable Deduction (100,000)Exemptions (7,300) (7,300)Taxable Income $281,300 $181,300Federal Taxes* $70,610 $39,008Potential Endow Iowa 25% Tax Credit** $25,000*Does not reflect personal exemption phase out and itemized deduction limitation.**See blue paragraph at bottom of page for Endow Iowa tax credit information.

Roth IRAConversion

PLUSCharitable Gift

The following nonprofit agencies received a Spring 2010 discretionary grant from the Community Foundation:

ARC of Cedar ValleyASPIRE-TRP, Inc.Association of Fundraising Professionals- NE Iowa ChapterBlack Hawk County Sheriff’s OfficeBosnian Cultural Foundation (KUD Kolo)Boys and Girls Club of Black Hawk CountyCedar Valley Chamber Music FestivalCedar Valley Preschool and Child Care CenterChildren’s Cancer ConnectionCommunity United Child Care Centers, Inc.East Side Ministerial AllianceElk Run PreschoolFamily Management Credit CounselorsFirst Children’s FinanceFriends of National Cattle CongressFrom the Heart

Hawkeye Community CollegeJunior Achievement of Eastern Iowa, Inc.La Porte City Crosslines Food ClosetLutheran Services in Iowa, Inc.National Alliance on Mental Illness of Black Hawk CONorth Cedar Elementary SchoolNorth Star Community ServicesNortheast Iowa Center for Independent Living Operation ThresholdPrice Laboratory SchoolSalvation ArmyTogether for Youth/Allen Women’s HealthUNI Student Association of Middle Level EducatorsUniversity of Northern Iowa FoundationVolunteer Center of Cedar Valley

Waterloo Center for the ArtsWaterloo Community PlayhouseWaterloo-Cedar Falls Symphony OrchestraYouth Sports Foundation of the Cedar ValleyYWCA

Non-Profit US Postage Paid

Waterloo, IAPermit #707

Established in Waterloo/Cedar Falls in 1956

FOU N DATIO

N

COMMUNITY

For ever.

o

For god.

of Northeast Iowa

PO Box 1176Waterloo, IA 50704

319.287.9106www.cfneia.org

Confirmed in Compliance with National Standards for U.S. Community Foundations.

Creative GivingAUGUST 2010

Community Foundationof Northeast Iowa

PRESIDENT & CEOMary Ann Burk

CHAIR OF THE BOARDChuck Shirey

PROFESSIONAL ADVISORY COMMITTEEMark Rolinger, Chair

John Larsen

Theresa Hoffman

Heather Gunderson

Mike Rickert

Robert “Bob” Smith

David Sparks

Roger Neumann

Steve Weidner

Helping your clients help their community. w www.cfneia.org

Counties We Serve

Return service requested

For good. For ever. Community Foundation of Northeast Iowa: Creative Giving, AUGUST 2010

$232,516 awarded to Black Hawk County nonprofitsHuman Services

Health

& Development

Arts & Culture

56%

18%

9%

10%

7%

For ever.

o

For god .

FOUNDATIONCOMMUNITY

of Northeast IowaEstablished in Waterloo/Cedar Falls in 1956

For more information, call us at (319) 287-9106 or visit www.cfneia.org.