Harvest Season Yields Opportunity for Farmers to Give Back Through Gift of Grain
October 29, 2024
With harvest season now complete, the Community Foundation of Northeast Iowa (CFNEIA) wants farmers to know about and to consider the opportunity to benefit their local community through a gift of grain. Donating a gift of grain is a simple way to make a charitable gift outside of the traditional cash contribution.
“Making a gift of grain is a unique way of giving that many don’t consider although it might make sense for an individual or family who farms and is also interested in being charitable,” said Derek Kimball, director of development with CFNEIA. “The value of the grain can be used to start an endowed fund at the Community Foundation. We grow the initial gift and the interest on the fund can be granted out to causes important to the individual or family to better the community, forever.”
By giving grain to CFNEIA, farmers can avoid including the sale of the grain in their farm income. Although a charitable income tax deduction is generally not available, the significant benefit is the avoidance of declaring it as income. The cost of growing the crops is deducted, which typically results in saving self-employment tax, federal income tax and state income tax. Benefits can be had even if one does not itemize the deductions and takes the standard deduction. Farmers considering a gift of grain are encouraged to first discuss this option with a tax advisor.
The simplest way to give a gift of grain is to let the Community Foundation know of the intended gift. The gift should be from unsold crop inventory with no sale commitment made prior to the gift. The crop is then taken to the grain buyer and the seller tells the buyer how much grain he/she would like to put into an account set up by the Community Foundation. The grain buyer then notifies the Community Foundation which sells the grain and receives the sale proceeds.
Gifts of grain to endowment funds with a qualified community foundation, like CFNEIA, are eligible for a 25% state tax credit on the total value of the gift through the Endow Iowa Tax Credit Program. All qualified donors can carry forward the tax credit for up to five years after the year the donation was made. More information about Endow Iowa can be found at www.cfneia.org/endowiowa.
Questions about gift of grain or other types of gifts can be directed to Derek Kimball at his email or at 319-243-1352 or Terry Gaumer, charitable advisor, at her email or 319-243-1354.
