The Community Foundation of Greater Des Moines is a qualified community foundation that provides access to Endow Iowa Tax Credits.  Endow Iowa allows taxpayers to receive a 25% Iowa tax credit in addition to normal federal charitable income tax deductions for certain charitable gifts.  Approximately $4 million in Endow Iowa Tax Credits will be awarded in 2010.

The charitable gifts must be made:

• Through a qualified community foundation.
• To a permanent endowment fund which limits distributions to 5%.
• For the benefit of one or more Iowa charitable causes.
• By individuals, corporations or financial institutions.

This is an exciting program that benefits both donors and charities.  Below is an approximation of the net after-tax costs of establishing a fund:

Cash Gift (examples of different gift amounts)                $ 1,000        $10,000                    

Less tax benefits:                                                         

• Net federal tax savings                                            -  350           - 3,500                       
  (approximated assuming maximum tax bracket)
• Endow Iowa Tax Credit                                            -  250           - 2,500                        
  (before federal tax effect)                                  

Net cost of contribution                                                        $ 400          $ 4,000              

Gifts of appreciated assets:  The net cost could be even lower if capital gains taxes and/or alternative minimum taxes are avoided.

HOW IT WORKS:

• Tax credits of 25% of the gifted amount are limited to $100,000 per person or $200,000 per couple if both are Iowa taxpayers. 
  
• Eligible gifts will qualify for credits on a first-come/first-serve basis until the yearly appropriated limit is reached.  If the current available Endow Iowa Tax Credits have been awarded, qualified donors will be eligible for the next year’s Endow Iowa Tax Credits.  The Community Foundation encourages donors to act early in the year to ensure they receive Endow Iowa credits.  
  
• All qualified donors have five years to use their Endow Iowa Tax Credits.  

• Endow Iowa Tax Credits allow donors to have even greater impact on their philanthropic interests in Greater Des Moines now and into the future.