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From Mere Wealth To Prosperity
Wealth preserving economic insights make living the best of the good life prudent wealth management
Recent years have been challenging for many nonprofits.
More stormy seas than smooth sailing.
And, soon it's likely to be a lot worse.
Many nonprofits will not survive. Will yours?
CHURCHES, CHARITIES & NONPROFITS
YES Is Your Financial Lifeline In Economic Storms
YES now has gifts valued from $50,000 to $5,000,000 To Help
Stay On Course
Christ in the Storm on the Lake of Galilee by Rembrandt
Another $20 Billion-Or More-Of Unintended Consequences For Nonprofits?
Churches, charities, schools and universities; the entire non profit sector and many political endeavors are increasingly dependent upon the wealthiest of Americans. Those earning over $200,000 make more than 1/3 of all charitable donations.
It's likely to only get worse for non-profits and their donors in the future.
Republicans now control the House, the Senate and the White House. With the Department of Government Efficiency and Elon Musk they are committed to making the federal government more efficient and economical. A big part of their plans include the tax code and the IRS.
The last time Trump and the Republicans were in control they passed the Tax Cut and Jobs Act, which they expect to renew, extend and even enhance.
The nonprofit sector must be vigilant against possible unintended consequences.
In short, reducing the tax burden on Americans, and especially the most productive Americans is generally a good thing and highly desirable. However a consequence of a lower tax burden is that any tax deduction is then of lesser relative value. That includes any tax deductions for charitable donations.
According to research released in 2024 by University of Notre Dame economist Daniel Hungerman and the National Bureau of Economic Research, "As most taxpayers know, the U.S. tax code creates incentives for some donors to give money to charities. But the huge tax reform policies of 2017, known as the Tax Cuts and Jobs Act (TCJA), changed that for millions of households."
As a result, charitable giving fell by nearly $20 billion annually.
Smooth Sailing For Nonprofits & Donors
That's why YES Yacht Executive Solutions offers its resources and solutions to help non profits and those that provide financial support to worthy causes.
How much more do you think your supporters would give, if their effective combined federal and state tax rates were less than 5% - rather than more than 50% in some cases?
YES has gifts valued from $50,000 to $5,000,000 available to qualifying nonprofits. And that's just to start the first year.
Many churches and ministries automatically qualify for gifts valued up to $50,000. Larger gifts and other nonprofits are considered on a case by case basis.
In Your Economic Storm, YES Can Be A Lifeline To Your Economic Security
YES provides the affluent with customized proprietary strategies to: maximize long term net worth, take their wealth to the next level, and make living the luxury lifestyle that much more rewarding. Including charitable donations.
It's not living the 'good life' if you're not doing some good.
YES, looks to share these secrets and strategies for the super rich to help support a few select churches, charities, and nonprofits. Let us know if we can help your nonprofit.
Many Have Not, Because They Ask Not
As for political non profits; campaigns, 501(c)(4)s, PACS & Super PACS, etc. many may simply have not because they ask not.
Ask most CPA's, attorneys, or industry professionals about tax deductible political donations you'll likely get the same response about profitable boat ownership, "It can't be done".
But is that even the right question?
Perhaps they're not getting the right answer because few ask the right people the right question.
The Unintended Consequences OF Good Intentions
The road to hell is paved with good intentions. And while the results of the recent election are promising, the future is anything but certain.
Trump and the Republicans are positioned to renew the tax cuts of the Tax Cuts and Jobs Act currently set to expire in 2025. But one of the unintended consequences of the TCJA and the substantial increase in the standard personal deduction was the drop in many smaller charitable donations for many charities.
The result for many charities has been a challenging environment and an increasing reliance upon larger donations by fewer wealthy donors.
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"Overall, the TCJA reduced the marginal tax benefit of giving to charity by more than 30 percent, raising the after-tax cost of donating by about 7 percent."
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Study: Charitable Giving Dropped By $20 Billion Aug 22, 2024 — The researchers say that charitable giving fell in 2018 because of the law's change to the standard deduction for income taxes.
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Tax law change caused U.S. charitable giving to drop Jul 29, 2024 — A $20 billion drop in charitable giving in the first year of the 2017 Tax Cuts and Jobs Act's (TCJA) implementation
Thus, there is no telling what effect tweaking of the tax code may have or how long until the political fortunes swing to the other side.
Don't Delay, Secure Your Future Today!
It's unfortunate but not surprising in these divisive times that politics is so key to the future of many nonprofits. Any prudent discussion about the future viability of non profits must consider political threats.
According to NBC exit polling data from the 2024 election, “Protestant or other Christian,” voters went 63% for Trump and 36% for Harris.
Conversely, the “nones” — those with no religious identity at all backed Biden solidly in 2020, 65% to Trump's 31%, and supported Harris even more, 71% to Trump at 26%.
Not to be judgmental, but the facts are the facts. Democrats are less religious and less charitable.
A recent study by the National Institute Of Health (NIH) found that political conservatives are significantly more charitable than liberals.
Democrats simply don't value the non profit and private sectors as much.
Their polices are that most social services provided by non profits and supported by tax deductible donations are best provided by increasing taxes and allowing the government to provide the services.
Regardless Of The Political Party In Power,
Nonprofits & Donors Need A New Funding Plan
Where Do You Rank?
Scientific research in behavioral economics as to the donors' decision making process and psychological relationships between tax rates and charitable donations shows that the "tax elasticity" for the average nonprofit to be about negative 4; with the range for all nonprofits from near zero to more than negative 6.
Thus, a 1% increase in the cost of making a donation (an increase in the net after tax cost of making the donation) will decrease the total charitable donations received by the average nonprofit by 4%.
Less anyone think only the Republicans pose a risk to nonprofits, consider the latest Democrat tax plan to ensure the wealthy pay their fair share was the Harris / Biden plan- which is really just the Obama plan.
It's really just a plan to raise the effective after tax cost of making donations for the wealthiest and most charitable of us, by 11.6% (39.6% tax rate - 28% deduction cap = 11.6%)
But actually it's much worse than that. Because under the Democrat plan, the true added cost to the donor is not 11.6% but likely much more with opportunity costs, etc. Probably more in an added 30 - 40% range. (The difference between 28 and 39 is 11, but the difference as a '%' is about 40 "percent", 28 x 1.4 = 39.2)
Consequently, the latest Democrat tax plan designed to make sure the wealthy pay their fair share of taxes - as if they are not already while making almost 1/3 of all charitable donations- will also substantially reduce charitable donations. Especially those that planned to make their donations from capital gains.
An average nonprofit could expect to lose about 45% of their donation revenues and some over 70%.
And there is no reason to suspect that the Democrats will do any better for nonprofits in the future.
Smooth Sailing For Nonprofits & Donors To A Financial Safe Harbor
A New Funding Plan
Fishers Of Men
One third of Jesus' deciples were fishermen by trade. He called them to be fishers of men. While the original context was specific to the apostles, many Christians interpret it to apply to all believers. They understand they too are called to share the Gospel message and invite others to follow Jesus.
That certainly includes philanthropy-the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.
As a fisherman casts his nets out into the water, Jesus was asking his deciples to cast the gospel message out to people and try to catch men's hearts.
There are some practical insights here. Especially since increasingly more nonprofits are relying on large donors - the "big fish" you might call it.
Just as fish are different, so are men. One way 'Big Fish' get to be big fish, is they are often difficult to catch. Big Fish seldom school or hang with small fish - except to eat them.
Thus, one is unlikely to catch many big fish the same way you catch a multitude of smaller fish in a net.
To catch Big Fish, or men, requires different strategies. The right lure or reward is essential. And the 'right lure' changes with the environment.
The incentives or rewards for large donors will probably be different than for smaller donors.
One of the ways we can uniquely help non profits is by substantially reducing the taxes of their largest donors.
We are usually able to help the affluent reduce their taxes by more than 50% by finding tax code provisions that their other advisors, CPAs and attorneys overlook.
In fact there is no reason for any of your donors to pay more than about 5% in taxes.
That leaves a lot of new found resources for more productive and rewarding uses such as the purusits of their passions, investing and philanthropy.
For example, just think about a nonprofit's largest and / or wealthiest donors.
If they were able to immediately reduce their taxes by half or even more - depending on the individual that essentially equates to about a 30 - 50%- immediate increase in net after tax income - do you think they would be inclined to make more and larger charitable donations - especially to those nonprofits & causes they already know and trust?
That seems to be the case, more often than not. And it's amazing the effect a yacht can have on donations?
So if your church, charity, or nonprofit needs help, innovative proprietary fundraising or financial support, please let us know how we may be of service.
That if your current advisors knew, surely they'd have told you already- wouldn't they?