Has God blessed your business and family? The Catholic Foundation can help you be a good steward of God’s blessings, while giving back to the community in which you do business. The Foundation is well equipped to accept gifts in any form, including cash, buildings, real estate and personal property. The Catholic Foundation also accepts gifts of stock, including gifts of stock from a closely held business. In fact, The Catholic Foundation has a trust form, which places it in a strategic advantage to accept S-Corporation stock.
Top reasons your business should engage in philanthropy:
- Creates a common bond for the business owners, employees, stakeholders and retirees
- Can help engage and motivate successor owners and leaders
- It is useful for recruiting and retaining employees
- Strengthens the relationship between the business and the community
- Considered a sign of success and a demonstration of character
How The Catholic Foundation can assist your business with philanthropy:
- Serve as the business’s philanthropic administrator, allowing it to rely on The Foundation’s expertise and resources.
- Administer a philanthropic supporting organization or managing a donor advised fund for your business, allowing it to engage in a comprehensive philanthropic initiative where business owners and employees could participate in the philanthropy. A donor advised fund also allows your business to donate anonymously.
- Help your business achieve its philanthropic goals as it undergoes a liquidation event.
- Sponsors business philanthropy seminars, which provide educational opportunities such as incorporating charitable giving as part of a business’s tax and succession planning. The seminars also provide information on charitable planning tools such as donor advised funds, endowment funds, trusts, and charitable gift annuities.
- Allows your business to take advantage of The Catholic Foundation’s partnership with Conway Center for Family Business, which provides additional philanthropic resources.
- To learn more, contact Tiffiney Hatem, Development Officer, at THatem@catholic-foundation.org or 614-443-8893.
TYPES OF BUSINESSES
A partnership is a flow through entity in which net income earned is passed to each partner in direct relationship to the partners’ ownership interest percentage. As a flow through entity, the partnership does not pay taxes and thus has no tax savings from charitable contributions made. Charitable contributions made from a partnership are viewed as a reduction in each partner’s basis in the firm and are allocated to each partner’s equity account in relation to their ownership percentage. Each partner’s charitable contributions are reported to them annually on form K-1. These contributions are added to the amount of charitable contributions that the partner has made individually and are subject to the applicable limitations.
Partnerships may want to consider making charitable contributions in years of financial success in order to mitigate the impact of their results on each partner’s personal tax return.
S-Corporations pass profits and losses through to its owners in direct proportion to their ownership interest. Like a partnership, they also report profits, losses and charitable contributions to owners using form K-1. One restriction on S-Corporations is that total contributions are limited to 50% of the S-Corporation’s AGI. Donations of real property, however, are limited to 30% of the S-Corporation’s AGI. The Catholic Foundation has a trust form, which places it in a strategic advantage to accept S-Corporation stock.
Charitable contributions made by C-Corporations have the effect of reducing corporate taxable income, but are limited to 10% of taxable income per year. Unused charitable contributions are eligible to be carried forward for five years.