President's Corner on Philanthropy
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President's Corner on Philanthropy Welcome to 2013! As we work on closing ICF’s 2012 financial books, we want to thank you for your support this past year and the marvelous contribution that ICF donors and friends made to nonprofits through their 2012 charitable giving and volunteering. It immensely enriched the quality of life throughout Idaho. As I suspect most of you know by now, Congress passed the American Taxpayer Relief Act of 2012 in a deal to avert the so-called fiscal cliff. So what does that mean for charitable giving in 2013? ICF is a member of the Council on Foundations (COF), which is comprised of private, corporate and community foundations. COF watched the fiscal cliff drama throughout 2012 and in a special edition of their newsletter they describe the general provisions of the Relief Act as follows: ● The charitable deduction will continue to be coupled with an individual’s or household’s corresponding tax rate. In other words, there is no cap on charitable deductions. ● The tax rate will be increased to 39.6 percent for individuals making more than $400,000 a year and households making more than $450,000. The previous rate for those earners was 35 percent. ● The estate tax will have a $10 million exemption for couples, $5 million for individuals, and a top tax rate of 40 percent. ● The bill extends the IRA charitable rollover through December 31, 2013. This provision permits tax-free distributions to an eligible charity from an IRA held by someone age 70½ or older of up to $100,000 per taxpayer, per taxable year. The provision includes two transition rules to allow donors to make 2012 contributions. First, the extension allows individuals who received an IRA distribution in December 2012 to elect to count that distribution (or a portion thereof) as a 2012 IRA charitable rollover if the individual transfers the amount in cash to an eligible charity before February 1, 2013. Additionally, the extension allows donors to make distributions directly to eligible charities before February 1, 2013, and elect to have such distributions treated as qualified charitable distributions in 2012. This change may be of particular benefit to donors who would like to take advantage of the rollover in both 2012 and 2013. There is also a change in the Pease Limitation on itemized deductions. In 2013, itemized deductions for higher income taxpayers will be reduced by the lesser of: 1. 3 percent of the amount by which the taxpayer’s income exceeds $250,000 for individual filers, $275,000 for heads of households, or $300,000 for married couples filing jointly (these amounts are adjusted annually for inflation) or 2. 80 percent of the value of the taxpayer’s itemized deductions. This reduction of itemized deductions is referred to as the Pease Limitation. For example, a married couple filing jointly has $500,000 in adjusted gross income (AGI) and claims $50,000 in itemized deductions. Under the newly passed American Taxpayer Relief Act, the threshold for the Pease Limitation is now $300,000. Thus, the couple’s itemized deductions would be reduced by 3 percent of the amount of their AGI that exceeds $300,000 (which is $200,000). The couple can only claim itemized deductions of $44,000. AGI $500,000 Excess of AGI over $300,000 $200,000 3% reduction of the excess amount X 3% Reduction of itemized deductions $6,000 The couple’s itemized deductions will be reduced by the lesser of $6,000 or 80 percent of the itemized deductions, which in this example is $6,000. Thus, the couple’s itemized deductions will be reduced from $50,000 to $44,000. ICF urges its members, donors and other supporters to contact their financial experts for advice about how the American Taxpayer Relief Act of 2012 affects them. In other news, I’d like to draw your attention to one of the special philanthropic stories of 2012 that took place in Sandpoint this past year. Dorothy Beck Adler lived in Kootenai for 20 years, and though she was well known and well-liked, she was a private person who never shared much about herself. After she passed, the community had a wonderful story to tell about the power of philanthropy. It is an inspiration to all of us about the legacy we can leave and how it enriches life throughout Idaho. Best wishes on the New Year to all of you! Bob Headlines Donor spotlight: Millionaire miser leave fortune to Donor spotlight: Bonner County nonprofits Millionaire miser leaves With a population of less than 700 people, everyone in fortune to Bonner County the town of Kootenai in Bonner County tends to know nonprofits each other. It was no different with Dorothy Adler, who moved to Kootenai from Malibu, Calif., in the mid- Deadline approaching for 1990s. Northern Region Competitive Grant Cycle “She was well-known around town,” said Barbara Porath, who owns Kootenai Used Furniture and was a Nearly 70 apply for ICF friend of Adler’s and the personal representative of her jobs in Coeur d'Alene and Dorothy Adler climbing into a estate when Adler passed away in early 2012. “She had Idaho Falls loader, a photo that friend LeAnna many friends, but we didn’t have a clue who this little Porath says “represents Dorothy to a News Briefs lady was until we went to clean her house out.” tee.” One of Dorothy’s distinctive characteristics was her thriftiness. Barbara remembers: “She’d come by mystore and browse, but not buy anything ICF's New and because it was too expensive. She’d get a cup of coffee from LeAnna’s shop, Renewing Members but you couldn’t ask her to pay for it. She shopped at the dollar store. She wouldn’t turn her oil furnace on unless the temperatures were really cold. December 2012 She’d be sitting there in four layers of clothes and if you went to turn the heat up she’d tell you to turn it back down.” New Member | Renewing Member But as Barbara and her daughter LeAnna Porath discovered, Adler was a millionaire. Upon her passing, she left $1.5 million to nonprofits, including the Benefactor ($1,000 and Panhandle Animal Shelter and the Bonner County Human Rights Task Force, above) and she established a scholarship at Lake Pend Oreille School through ICF. It Anthony and Susie Balukoff, took the organizations by surprise because with the exception of the animal Boise shelter, she had not previously donated to any of them. Ford and Jean Elsaesser, Not only that, but Barbara discovered that Dorothy was raised in Kootenai and Priest River never told anyone. Barbara and LeAnna discovered it when they were sorting C.K. Haun and Karen Meyer, through her things and came across school prize ribbons. At first they thought Boise she had picked them up at local yard sales, but soon realized Dorothy had won them herself as a student. Tom and Alice Hennessey, Boise Barbara has been able to piece together that Dorothy, whose maiden name was Beck, and her family likely moved to Kootenai when Dorothy was in Patron ($500-$999) elementary school. Her mother worked at Lake Pend Oreille School and her John and Martha Arrington, father was employed by the state. Idaho Falls Dorothy left Kootenai for New York City as soon as she graduated from high Thomas and Marilyn Beck, school. She met and married renowned violinist Murray Adler and the two later Boise moved to southern California. She did her own investing and kept the details secret from everyone, including Murray. Barbara recalled that Dorothy loved to Douglas and Deidre talk to people about their lives, but she never reciprocated with details about Chadderdon, Coeur d’Alene her own experiences. Darin and Ann DeAngeli, “She was so interested in people and she could get in the best conversation Boise with a total stranger, but she never liked to talk about herself,” Barbara Phillip and Anita Murelaga, recalled. “She had a sharp tongue and you didn’t push her.” Boise Barbara, who didn’t know she was personal representative of Dorothy’s estate William and Sheila Richards, until she was contacted by a lawyer, said despite Dorothy’s private persona Hayden Lake she wishes she pushed a little harder. “I should have been a little more snoopy,” she said. Gay Simplot, Boise Thomas and Rosamond Deadline approaching for Northern Region Turnbull, Carbondale, CO Competitive Grant Cycle Charlotte Unger, Ketchum The ICF grant cycle is open for the north Idaho counties William and Virginia Woolley, of Benewah, Bonner, Boundary, Clearwater, Idaho, Boise Kootenai, Latah, Lewis, Nez Perce and Shoshone. Sponsor ($250-$499) Deadline to apply is today (Tuesday, Jan. 15). Mary Abercrombie, Boise We have great news about our grant cycles: The fund Harold and Marsha advisors of the Gladys E. Langroise Advised Fund in ICF Blackman, Boise have decided to contribute more than $100,000 to split between our three Regional Competitive Grant Betty Carr, Idaho Falls Cycles. The money is to be used for health, education ICF President Bob Hoover visits the Mark Davidson and Jenny and the welfare of children. In addition, we have Blanchard Area Seniors to see how Emery-Davidson, Hailey had anonymous donors step forward and offer grants from ICF have improved their $100,000 to be shared between the three grant cycles Kent and Kim Fletcher, Burley kitchen. to be used toward education. Allan and Fran Frost, Twin Falls Educators, health care providers and social service agencies who work with children should be strongly encouraged to apply for grants.