Most households3 can’t beneficially deduct their tax deductible giving
Optimize your Philanthropy!
- Save on taxes2
- Contribute more2 to the organizations1 you love the most
- Have more2 in your own pocket
- Promote your business
- Promote the organizations1 you support
just like . . .
This strategy often results in a net 12% – 37% tax savings2 of the total sponsorship amount.
Why should I consider this strategy?
The objective of the Eddleman Foundation is to optimize tax advantaged giving particularly for small business owners; if we can make your philanthropy more beneficial and literally less taxing, you will have more to give or keep. Through this, we hope to encourage giving more abundantly. An additional objective is to help promote the donor’s business as a caring, integral part of the community and the donor’s supported organizations as worthy of support.
How does this strategy work, generally?
The basic strategy is to take dollars you would ordinarily “give” individually and use them to “sponsor” the Eddleman Foundation through your business. Through this sponsorship, we will promote both your business and the organizations you want to support. We then take a majority of the sponsorship money (80% – 90% targeted) and donate that to the organizations of your choosing1. If you wish, you can “true –up” the 10% – 20% difference. And, the overall advantage is that more total dollars are available to go to work for you and your charity. Of the 10% – 20% we retain, some is administrative, but some goes to our endowment to continue our good work. Your total dollars put to good work will be as much as they would have been and you have a net tax savings as well.
What can I really expect regarding Tax Benefits2
This strategy often results in a net 12% – 37% tax savings2 of the total sponsorship amount. The sponsorship is a business marketing expense that is fully deductible for your business. In addition, you retain your personal standard deduction (now $24,000 for married filing jointly / $12,000 single filers). So, while charitable giving is an itemized deduction, fewer than 12% of households3 will exceed the standard deduction, thus all itemized expenses for them are of no tax benefit. And, of those who exceed the standard deduction, most only have a minimal advantage with itemization over the standard deduction. For instance, a household with $25,000 in itemized deductions (charitable giving, mortgage interest, etc.) only gains $1,000 of additional deduction ($25,000 itemized – $24,000 standard = $1,000), which would subsequently only net the taxpayer 12% -37% of that $1,000 ($120 – $370) of additional tax savings over the standard deduction. However, $25,000 in business marketing expenses (sponsorship) would net a tax benefit on the whole $25,000 ($3,000 – $9,250) on top of the benefits of the entire Standard Deduction of $24,000 ($2,880 – $8,880).
Our goal is then to create a synergistic result where each sponsorship dollar yields a traditional marketing value for your business and the full value of supporting and promoting your favorite charity. In most cases you can save on taxes, have more available to give, get to promote your business, promote your favorite non-profit, support the work of the Eddleman Foundation, and do it all at a net benefit to everyone involved.
Verses for reflection:
- Malachi 3:10
- 2 Corinthians 9:7-11
- 1 Chronicles 29:14
- Luke 6:38
- Proverbs 3:27
- Mathew 10:16
- We reserve the right to refuse any donation or sponsorship whereby the donor restricts the funds usage to an organization or purpose which we find objectionable or in conflict with our basic beliefs.
- Any and all statements provided are not guidance regarding a particular tax situation. Tax rates will vary by individual and tax laws are subject to change at any time without notice. Please consult your tax advisor or the tax professionals at Eddleman & Eddleman for tax advice specific to your situation. Depending upon your individual situation, you may or may not be able to take advantage of a given tax minimization strategy.
- According to 2018 estimates by the Joint Committee on Taxation. https://www.jct.gov