By Suzanne Rohlfs, Director of Development and Professional Advisor Relations, The Greater Cincinnati Foundation
In my work at The Greater Cincinnati Foundation, I’m privileged to help generous people make the most of their giving. This is why I’m happy to share an upcoming opportunity in Northern Kentucky that benefits Kentucky taxpayers and makes the most of their generosity.
What is the Endow Kentucky Tax Credit?
The Endow Kentucky Tax Credit enables any Kentucky taxpayer (business or individual) to receive a state tax credit of up to 20% of a charitable gift to a permanent endowment fund at a local community foundation (up to $10,000 per taxpayer).
Unlike a tax deduction, a credit is taken off the tax bill dollar for dollar. So, if a donor has a Kentucky tax bill of $1,000, a donation of $5,000 through Endow Kentucky would eliminate that tax altogether (20% of $5,000 is $1,000). Federal and State charitable tax deductions are still available for these gifts.
In 2016, $1,000,000 in tax credits are available beginning July 1, 2016, through June 30, 2017.
Limited time opportunity
Applications for fiscal year 2017, (which begins July 1, 2016) will be accepted through June 30, 2017, or until the credits run out, whichever comes first. Note that tax credits may be depleted in the first week of July, so I recommend applying on July 1, 2016.
What gifts qualify for the Endow Kentucky tax credit?
Gifts can be cash or appreciated stock, and must be made to a qualified community foundation, such as The Greater Cincinnati Foundation. Donors may also create a new endowment fund. Endowed funds are permanent funds which provide annual support to the named organization. The fund must benefit a Kentucky organization.
Jumpstart your nonprofit’s endowment
Are you part of a nonprofit looking for a way to grow or start your organization’s endowment? Endow Kentucky is a great way to build your endowment.
What our donors are saying
I asked Chuck Scheper why he and his wife, Julie Geisen Scheper, used Endow Kentucky in the past.
“My wife and I found setting up an Endow Kentucky fund to support one of our favorite charities, Covington Partners, was not only a very tax efficient way to go with both a tax deduction and the state tax credit, but it’s also comforting to know that we are setting up a legacy of giving to this organization for many years to come,”
Why a tax credit?
The Endow Kentucky Tax Credit is a response to a study that showed a substantial intergenerational transfer of wealth would occur in the next few decades and that many of these dollars would likely leave the state (often passed by parents to adult children who move away). Kentucky offers the tax credit as an incentive to keep charitable dollars in the state and to use them for the permanent support and long-term sustainability of Kentucky nonprofits.
Consult your tax advisor for further information and additional tax advantages.