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| Philanthropy |
A Charitable Address
Lani Luciano
04/01/2004
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Most years, Lynne Pantalena, director of Wealth Strategies for the Private
Clients Group at FleetBoston Financial Bank, gets just one or two phone calls
from property owners interested in donating a home, land or other real estate to
charity, but this year she had received three inquiries by mid-January. By that
time Philip Purcell, vice president for planned giving at Ball State University
in Indiana, had already conducted two serious discussions with potential donors:
one with a BSU graduate about donating his home in northern California, another
with a local physician about contributing a nearby wooded tract that could be
useful for scientific study.
| “Fewer properties than you might think qualify for preservation, and even
fewer charities are qualified to accept them.” |
Neither expert has been surprised to see
interest in donating real estate blossom. According to U.S. Federal Reserve
figures, the value of household noncash financial assets declined 6.5 percent
between 1998 and 2002, while real estate holdings grew in value by 43.3 percent.
While the major equity indices soared by over one-third last year, much of the
value in many of our portfolios remains in real estate, rather than in liquid
securities like stocks—a legacy of the stock market malaise of 2000 to 2002.
“Right now, someone who wants to make a significant contribution to a favorite
charity might not have the proper cash flow to do it but may have a highly
appreciated second or third vacation home that is no longer needed,” says
Pantalena.
Real estate donations are often attractive to both sides. The
charity receives a donation it might not have otherwise obtained, while we get
to deduct the full current market value of the asset on our taxes, and avoid the
capital gains tax we would incur if we had sold it outright. We may also benefit
from some help with estate planning and—if the gift is structured to generate an
income stream—some extra cash flow. This additional capital has become an
important benefit as many people find themselves rich in assets but short of
liquidity. “Income security has been growing as an element in charitable
giving,” Purcell explains.
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