The Endow Iowa program is part of an effort to enhance philanthropic activity in the State of Iowa by encouraging investments to new or existing community foundations. The program provides significant tax incentives for individual, business or organizational donors of community foundations.
Tax Credits to Donors
County Endowment Program
The Values Fund legislation also established a county endowment program.
The County Endowment Fund legislation provides that .8 of one-percent of the state's gambling revenues will be distributed to the 84 Iowa counties that do not have gambling entities. These funds are deposited and distributed through Qualified Community Foundations or Community Affiliates that address countywide needs.
The funding for this program is handled by the Iowa Department of Revenue, in collaboration with the Iowa Economic Development Authority.
For more detailed information online visit the Iowa Economic Development Authority or contact IADG.
Endow Iowa provides significant philanthropic tax credits
Endow Iowa Tax Credits!
Endow Iowa allows taxpayers to take a 25% Iowa tax CREDIT on their Iowa state return in addition to the normal federal charitable income tax deductions for certain charitable gifts. Approximately $6,000,000 in Iowa tax credits will be awarded in 2015.
The charitable gifts must be made:
- Through a "qualified" community foundation (the Greater Des Moines Community Foundation is 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. Here is a brief approximation of the net after tax costs of establishing a fund:
Cash Gift (examples of different gift amounts) $1,000 $10,000 $ 100,000
Less tax benefits:
• Net ederal tax savings - 350 - 3,500 - 35,000
(approximated assuming maximum tax bracket)
• Endow Iowa Tax Credit -250 -2,500 - 25,000
(before federal tax effect)
Net cost of contribution $400 $4,000 $40,000
Gifts of appreciated assets: The net cost could be even lower if capital gain taxes and/or alternative minimum taxes are avoided.
A variety of gifts qualify for Endow Iowa Tax Credits including cash, real estate, appreciated securities and outright gifts of retirement assets.
Tax credits of 25% of the gifted amount are limited to $300,000 in tax credits per individual for a gift of $1.2 million or $600,000 in tax credits per couple for a gift of $2.4 million if both are Iowa taxpayers.
Eligible gifts may 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 of Greater Des Moines 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 their communities now and into the future.
This is a great way to support your philanthropic interests in your community now and in the future. Please feel free to contact us for answers to any questions you may have on this philanthropic opportunity created by the Iowa legislature.
All donors should consult with their tax advisors to review their individual circumstances.