Tag Archive for: foundation

A Legacy Gift 20 Years in the Making

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Eddie and Robert Verhelst, brothers from South Dakota, are third-generation farmers, working the land passed down through their parents and grandparents. Out of gratitude for the Lord’s blessings, they wished to set up planned gifts to support Christ’s gospel work. “We wanted to do something to share back our wealth,” says Eddie. “God has been so good to us.”

In the early 2000s, Eddie and Robert met with WELS Christian giving counselor Ken Dierks, who introduced them to charitable remainder trusts. After Ken retired, Christian giving coun­selor (CGC) Scott Wagner nurtured the relation­ship with the brothers, providing them with gift illustrations from WELS Foundation showing how they could fund charitable remainder trusts using stock that they held.

In late 2022, the brothers worked with their legal and tax advisors and WELS Foundation to establish charitable remainder trusts. Once established, they transferred their stock to the trusts, with WELS Foundation serving as trustee.

The brothers are grateful for the guidance from CGC Scott Wagner and the services provided by WELS Foundation. They also appreciate the income tax deduction they received and the fact that they didn’t have to pay capital gains tax on their gift. In addition, Eddie and Robert will receive income payments from the trusts for their lives, which they plan to use as additional gifts to support the charities they love. When the Lord calls them home, the remainder in the trusts will support WELS ministries.

“If you have stock to donate, this is a wonderful way to do it,” Eddie says. “It’s a win for every­body and a win for God’s kingdom.”

This is one way to use a charitable remainder trust. Learn more about charitable remainder trusts by contacting your local WELS Christian giving counselor at 800-827-5482 or [email protected]

Why Establish a Charitable Remainder Trust?

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If you desire to use appreciated property that may produce little to no income to support you or your family—and the Lord’s ministry—while avoiding taxes, the charitable remainder trust (CRT) might be right for you. Some who fit this category include farmers, investors, business owners, and landlords.

Here’s how it works:
A WELS Christian giving counselor (CGC) can provide you with gen­eral information and work with your advisors and WELS Foundation to establish the charitable remainder trust. Once established, you transfer cash, securities (stocks, bonds, mutual funds), or real estate to the trust with WELS Foundation serving as trustee. Charitable remainder trusts can provide income to you for life and/or to your children for up to 20 years. When it ends, the remaining property in the trust passes to your designated charitable beneficiaries such as your church and/or synod.

Here are the steps:

  1. Meet with a Christian giving counselor and advisors; complete paperwork.
  2. Transfer assets to the trust.
  3. The trust makes payments.
  4. The trust ends; the property passes to the charitable beneficiaries.

The benefits include:

  • You will receive an income tax charitable deduction and you don’t have to pay capital gains tax on the gift.
  • You and/or your children receive an income stream (quarterly payments).
  • You can continue supporting the Lord’s work after you go to heaven.

The minimum gift size is $200,000. WELS Foundation’s recommended payout rate is five percent. Payments can be a fixed or variable amount. You can choose several income beneficiaries and the length of the trust term. WELS Foundation as trustee manages the assets for the benefit of the income beneficiaries and charitable beneficiaries.

Charitable remainder trust illustration

Learn more about charitable remainder trusts by contacting your local WELS Christian giving counselor at 800-827-5482 or [email protected]

Watch a video about how WELS members Jerry and Lynn Zimpelmann support WELS mission work through their charitable remainder trust.

SECURE Act 2.0 Opens New Use for Qualified Charitable Distributions

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Donors 70.5 and older have enjoyed making tax-free qualified charitable distributions (QCDs) from their IRA that also count toward their yearly required minimum distribution (RMD). Legislation passed at the end of last year, known as SECURE Act 2.0, allows donors to fund a charitable gift annuity (CGA) through a QCD.

An individual can now make a QCD of up to $50,000 (out of the $100,000 overall annual limit on IRA qualified charitable distributions) into a CGA in one calendar year. A husband and wife can each distribute up to $50,000 from their IRAs in one year for a CGA (maximum $100,000). A CGA provides the donor and/or his/her spouse with fixed quarterly payments for life. Then, after the donor goes to heaven, the remainder of the gift goes to ministries chosen by the donor.

The QCD into a CGA counts toward the RMD for those required to take it (as of 2023 the age at which RMDs must begin has been raised to 73). Since it can only be done in one tax year, it may make sense to consider distributing the maximum $50,000 amount when you decide to do it. The distribution can be split between multiple CGAs in one year as long as the total doesn’t exceed the $50,000 limit. Because the QCD is a tax-free distribution from your IRA, there is no tax deduction for the gift and the CGA payments are fully taxable.

You might want to consider this new giving opportunity if:

  • you do not itemize on your taxes.
  • you want to provide an income stream to you and/or your spouse.

A WELS Christian giving counselor can help you get started. If you are interested, call 800-827-5482 or e-mail [email protected]

The Charitable Gift Annuity: A Gift That Pays Income for Life

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After 35 years of teaching, Arnie Nommensen began serving in a different way: as a WELS Christian giving counselor. In his role, Arnie met a WELS member who made quite an impression on him. This member had seen firsthand the blessings of charitable gift annuities (CGAs), so Arnie helped him set up multiple CGAs to leave a legacy of faith.

Motivated by this example and out of thankfulness for God’s blessings, Arnie knew that setting up CGAs to support the Lord’s work was also right for him and his wife, Carol. They knew that even after God calls them home, their CGAs will continue to support the ministries they love, like providing physical and spiritual support in Africa through WELS Christian Aid and Relief.

“You hear about things that WELS Christian Aid and Relief is doing in Africa for communities that really have a need, and that community then is also hearing the gospel from the people who are there to help them,” says Arnie. “The support that we can give through a charitable gift annuity will help provide that, and that’s something that can be carried on after we’re in heaven.”

CGAs are very popular since they provide quarterly income payments to the donor for life, in addition to significant tax benefits. When the Lord calls the donor home, the remainder will be distributed to the ministry or ministries of the donor’s choosing.

Carol appreciates how CGAs allow them to share their blessings with others: “They’ve given us the ability to use our financial gifts from the Lord to help or give back to him in a small way, because he gives us so much,” she says. “And it really gives us joy to do that.”

Run a personalized gift annuity illustration based on your age

Learn more about charitable gift annuities by contacting your local WELS Christian giving counselor at 800-827-5482 or [email protected]

Watch Arnie and Carol’s full charitable gift annuity story 

A Smart Option for Giving

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If you are age 70.5 or older, you can support WELS ministries and churches through a gift directly from an individual retirement account (IRA) called a qualified charitable distribution (QCD).

Why is a QCD such a good giving option?

  • Giving directly from your IRA—rather than withdrawing these funds—won’t increase your adjusted gross income or subject your Social Security income to more taxes.
  • Such gifts can count toward all or part of your annual required minimum distribution (RMD). While IRA owners age 70.5 or older can make gifts directly to charities from their IRAs, the minimum age for taking RMDs has increased to 72.
  • QCD gifts can be especially advantageous for those who do not expect to itemize their deductions and for those whose deductions are limited.
  • You may make QCD gifts in any amount up to $100,000 per person per year or $200,000 for a couple with separate IRAs. Because of recent tax law changes, you may be able to continue to add to an IRA after age 70.5. If this is your situation, the amount of QCD gifts you can make will be reduced.*

Learn more about making QCDs from your IRA at wels.net/helpful-giving-tools or by contacting your local WELS Christian giving counselor at 800-827-5482 or [email protected]

*As a result of the SECURE Act, if an individual with earned income continues to make deductible contributions to an IRA beyond age 70.5, the individual’s maximum QCD amount will be reduced by the amount of deduction claimed for an IRA contribution.

Helpful Giving Tools

WELS Foundation provides resources to support you in your giving, such as:

Consider Being “Flexible” in Retirement

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For those looking for new ways to support WELS’ mission to spread the gospel of Jesus Christ while still providing for their retirement needs, they may be surprised to learn about a way they can do both: the flexible deferred charitable gift annuity.

  1. With this creative plan (which is a variation of the simple charitable gift annuity), you can meet current and future income needs. While IRS regulations limit contributions to IRAs, 401(k)s, 403(b)s, and other retirement plans, there are no such limitations with this plan.
  2. You can create a plan that maximizes your current income tax deduction while retaining the flexibility of receiving payments at the time you choose.
  3. Lastly, a flexible deferred annuity provides protection should an income need arise due to an uncertain future event (such as placing a relative in an assisted living facility or helping someone with in-home care). Payments can begin if or when the need arises.

A good example

As Bill and Jane prepared for retirement, they wanted to set aside resources to supplement their retirement income, while eventually benefiting a number of WELS ministries, including their home church. With the flexible deferred charitable gift annuity, they fulfilled these objectives.

Over a period of years, Bill and Jane created several flexible deferred charitable gift annuities and can begin receiving the payments in the future.

  • They met part of their Christian giving goals, named their favorite ministries to receive the remainder of the annuities, and had large deductions to use against their current income.
  • Annually they have the choice to begin receiving the payments.
  • When the payments begin, they may decide to use their payments to support the Lord’s work and would receive additional income tax deductions for those gifts.

Charitable gift annuity illustration

 

 

 

 

 

 

For more information about this creative plan or charitable gift annuities, contact a WELS Christian giving counselor at 800-827-5482 or [email protected]

The Donor Advised Fund: One-Stop Giving

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WELS member and attorney David Nommensen and his wife, Bonnie, knew that setting up a donor advised fund was an ideal and tax-wise way to support ministry at their home congregation, First Lutheran in Elkhorn, Wis.

David likes the fact that their donor advised fund provides predictable, ongoing support to ministry at First, helping fund programs that spread the gospel both inside and outside the church and school. He also likes the tax benefits of the donor advised fund. “It was just part of good stewardship,” says David. “Bonnie and I could look at the taxes that we had saved and do a little soul-searching and perhaps give a little more.”

Donor advised funds are very popular since a donor can give a gift now and recommend the ministries that benefit later. The gift can be divided among the ministries the donor cares about, and a single receipt will be provided for income tax purposes.

In addition to ongoing support for their church and school, the Nommensens know that their family donor advised fund is a wonderful way to involve their kids and grandkids in the joy of giving since they can be included in the decision-making process for the grant recommendations. It’s another way to pass along Christian values to the next generation of believers.

“Our prayer is that the donor advised fund is around a lot longer than Bonnie and I are,” says David. “And it’s a nice opportunity for us to have these conversations with our children about the needs of our favorite church organization. I’m really hoping that someday my grandchildren and great-grandchildren will be donating to this fund and having those same conversations.”

How does a donor advised fund work?

 

Learn more about donor advised funds by contacting your local WELS Christian giving counselor at 800-827-5482 or [email protected]

See David’s full donor advised fund story 

Why a Donor Advised Fund?

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From time to time, a WELS member may be faced with a larger than expected financial blessing that opens the door for giving to the Lord’s work without enough time to distribute the extra blessing nor the desire to engage in multiple transactions to help several charities. Enter the donor advised fund (DAF), which permits you to make charitable gifts to those organizations you care about most, at the time you choose, often with expert advice and assistance.

The ABCs of a DAF
A DAF is like a charitable investment account for the purpose of supporting the WELS ministries you care about. When you contribute cash, securities, or other assets to a DAF, you are generally able to take an immediate income tax deduction as well as avoid capital gain taxes from the gift of appreciated property. Those funds may then be invested for tax-free growth, and you have the flexibility to recommend distributions from time to time to qualified WELS ministries. (Requesting distributions from your WELS Foundation donor advised fund is easy. Simply fill out WELS Foundation’s online request form.)

If you have a DAF, consider what will happen to the funds in the future when you are no longer there to make decisions about the disposition of funds. Either you can entrust the decision-making to your heirs on how the funds are to be distributed, or you can designate the remainder from a terminating DAF to create an endowment or fund a special project.

Using a DAF to itemize
With recent tax and economic changes, many people no longer itemize their deductions. With a DAF, an individual can bunch several years of charitable gifts into a single year, allowing them to itemize in that year.

More information
Over the past several years, there has been a substantial increase in the popularity of DAFs, and more people are giving to WELS in that way, which means a blessing for those who receive the Word of God through us. If we can provide more information about supporting your congregation, WELS, and WELS-affiliated ministries through a WELS Foundation DAF, please contact us at 800-827-5482 or [email protected]

Making Distributions from a Non-WELS Foundation DAF

To make a gift to support the gospel of Jesus Christ through WELS from your non-WELS Foundation DAF, contact your sponsoring organization to recommend a grant and give them the following:
• Our legal name: WELS Foundation, Inc.
• Our federal tax ID #: 39-6084446
• Our mailing address:
WELS Foundation
N16W23377 Stone Ridge Drive
Waukesha, WI 53188-1108

Charitable Remainder Trusts: A Gift with Multiple Benefits

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There are many ways you can support WELS and its mission to spread the gospel of Jesus Christ. One wise tool for personal financial planning may be a charitable remainder trust (CRT). These trusts are used to convert appreciated property into a gift to advance the gospel while providing an income for the donor(s) for life or for a term of years.

For example, a WELS member purchased an asset (stock, real estate, rental property, etc.) that has grown in value so much that rebalancing the portfolio or reducing the holdings has become financially prudent. By giving the appreciated asset to WELS Foundation to be put into a CRT, the Foundation can sell the asset within the CRT and create a balanced portfolio that pays an income to the beneficiaries for life or a term of years. The member receives an income tax deduction and spreads out the capital gains over the term of the trust. Furthermore, these deductions can eliminate tax on a significant portion of income for up to six years. They may also make it possible for you to itemize where it would otherwise not be feasible.

One additional benefit that may apply is that the trust remainder that distributes to ministry is excluded from any potential estate taxes. But most importantly, the gospel is advanced because of the gift. WELS Foundation has established a minimum gift for such an arrangement at $200,000 in fair market value.

Find out more about the CRT by consulting with a WELS Christian giving counselor at 800-827-5482 or [email protected]

Helpful Giving Tools

WELS Foundation has made it easier to access resources to support you in your giving, such as:
• Letter of Instruction form
• Gifts of Securities Procedures document
• Qualified Charitable Distribution (QCD) Procedures document
• Link to the online Gift Options Tool

To access these resources, visit wels.net/helpful-giving-tools.

 

WELS Foundation: Here to help

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On Nov. 7, 2021, Divine Peace, Milwaukee, Wis., held its final worship service after sharing the gospel with its neighborhood for almost 65 years. It was an emotional day filled with memories of weddings and baptisms, confirmations and Christian funerals. Yet there was joy beneath the sadness—joy that only peace in Christ can bring. The members of Divine Peace knew that they are a part of God’s bigger plan for the kingdom.

When Divine Peace was established in 1957, it was built on the outskirts of a growing city, surrounded by farmland. Over the years, farmland gave way to starter homes and apartment buildings. As homeowners began to move to the suburbs and those in the apartments constantly came and went, it became difficult for Divine Peace to build lasting relationships with its transient neighbors and sustain its membership.

As the congregation began to run out of resources, and its pastor took a call to another congregation in June 2021, Divine Peace’s leadership knew it was time to prayerfully evaluate its future. Members also looked at the density of WELS congregations that are now in the area—four churches within a 1.5-mile radius.

After extensive Scripture study and prayer, open forums, and a special sermon series, the congregation determined it no longer could carry out a sustainable ministry. “We believed it was a better use of our time, talents, and treasures to close Divine Peace and redeploy these gifts to other areas of ministry. This redeployment would involve sending our membership to other WELS congregations in our community to support and strengthen those churches,” says Divine Peace church president Brian Gottschalk.

Instead of selling the church and property themselves, congregation leadership turned to WELS Foundation for assistance. After the final service, Divine Peace donated the property to WELS Foundation, who in turn sold the property and distributed the net proceeds to the ministries designated by the voters of Divine Peace. They split the assets of the sale to continue supporting gospel work for years to come: 80 percent to support WELS Missions and Congregational Services and 20 percent to support Christian education at nearby Wisconsin Lutheran High School through its foundation’s endowment.

Jim Holm, Executive Director of WELS Foundation, says, “It was a privilege to work closely with Mr. Gottschalk, church secretary Shelly Fink, and leadership at Divine Peace throughout this process. Even though Divine Peace closed its doors, its legacy of faith will continue.”

Holm continues, “WELS Foundation was blessed to assist Divine Peace as part of our mission of facilitating gifts to benefit WELS ministries, for the spreading of the gospel.”

To contact WELS Foundation, please call 800-752-8940 or e-mail [email protected]

WELS celebrates exciting milestone in endowments program

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This year WELS Ministry of Christian Giving and WELS Foundation are celebrating 16 years of God’s blessings—and the generosity of God’s people—through the WELS endowment funds.

In 2005, synod convention delegates prayerfully considered how WELS could help support gospel ministry in a predictable and ever-increasing manner. One answer was to establish the WELS endowments, which benefit the Lord’s work in WELS Home, World, and Joint Missions and at our four ministerial education schools. Out of gratitude for God’s love and a desire to help more people know Jesus as their Savior, WELS members have faithfully contributed to these endowments over the last 16 years, resulting in more than $100 million in gifts received ($36.7 million) and expected ($68.9 million).

“We praise Jesus for guiding our synod’s plans and prompting our members’ gifts so that we’re now able to distribute more than $1 million from these endowments for greater tuition assistance for ministerial education students and the funding of mission work to people groups located both in the U.S. and in foreign fields,” says Rev. Kurt Lueneburg, director of WELS Ministry of Christian Giving.

In addition to the two synod endowments, WELS Foundation also manages endowments that are set up by individuals, congregations, and other WELS ministries. In total, WELS Foundation distributed $3.5 million to gospel work from more than 350 endowments this year, providing ongoing financial support for gospel work throughout WELS.

One of the endowments managed by WELS Foundation was established by WELS members David and Lynette Buss, longtime supporters of Jesus’ work through their local congregation and area Lutheran high school. “We read an article about Martin Luther College in a flyer from WELS,” says David, “and we knew we needed to distribute [our blessings] to people in the ministry field.” The Busses are helping reduce the burden of tuition costs for students so they can focus on training for the ministry.

The Busses understand that an endowment fund is an ideal way to support MLC students for years to come. “This fund will grow as long as we are on this earth, and it will continue to grow and help hundreds of students in future years,” says David.

“An endowment is a great way to create a lasting legacy of Christian faith while carrying out the Lord’s work,” says Mr. Jim Holm, executive director of WELS Foundation, “and there are a variety of ways to set up an endowment: cash or appreciated assets; or through a will, trust, beneficiary designation on a retirement account, or insurance proceeds.”

To learn more about adding to an existing endowment or setting up an endowment for a ministry close to your heart, contact your local WELS Christian giving counselor at wels.net/giving-counselors or call 800-827-5482.

God blesses the generosity of his people through endowments

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This year WELS Ministry of Christian Giving and WELS Foundation are celebrating 15 years of God’s blessings—and the generosity of God’s people—through our synod endowment funds.

In 2005, delegates at the synod convention prayerfully considered how WELS could better support ministry in a predictable and ever-increasing way. One answer was to establish the WELS endowments. These funds were established to benefit gospel work in WELS Home, World, and Joint Missions and at our four ministerial education schools: Michigan Lutheran Seminary, Luther Preparatory School, Martin Luther College, and Wisconsin Lutheran Seminary.

These endowments would not be possible without the generosity of God’s people. Out of thankfulness for the Lord’s blessings and to leave a legacy of faith for generations to come, WELS members have faithfully and steadily given to these endowment funds over the last 15 years, resulting in $32 million in gifts received and $68 million planned for the future. What innumerable blessings for ministry!

In July of this year, Lord willing, WELS Foundation will distribute over $1 million from these WELS endowment funds to support Ministerial Education and Home and World Missions.

Annual distributions from these endowments have profoundly impacted gospel work in our neighborhoods and around the world in addition to supporting the future called workers who will carry out that gospel work.

“Because of the highly competent way in which these endowment funds are administered, the ministerial education schools can make firm plans to help students with financial assistance and to repair buildings on campus every year. It’s hard to overstate how helpful that is,” says Rev. Paul Prange, administrator for Ministerial Education and chairman of the Joint Mission Council.

Rev. Larry Schlomer, WELS Board for World Missions administrator, agrees that the endowments are crucial for ministry. “The reach of our Joint Missions work, funded almost entirely by these distributions, has led to work in Vietnam, South Sudan, Liberia, Bangladesh, Pakistan, Nepal, and several new opportunities that continue to be explored. The sturdy backbone these endowments provide allows us to aggressively pursue contacts that our WELS members in the US have around the globe. It seems the more we explore these contacts, the more doors the Lord is opening for his gospel to grow.”

The list of impacts—and the list of blessings—could go on and on. Even following a year of great uncertainty, these endowment funds are a solid foundation for gospel work. Not only do they provide dependable support today, they also provide predictable, growing support for ministry next year, and every year after that, until the Lord returns.

To learn how you can join your brothers and sisters in faith in supporting ministry through WELS endowments, visit wels.net/endowments or call 800-827-5482.

 

 

WELS Foundation featured in “Table Talk” vlog

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Jim Holm, executive director of WELS Foundation, was the featured guest of Kettle Moraine Lutheran High School’s Estate Plan Counselor Paul Snamiska in the KML Foundation’s new vlog series “Table Talk.”

In the interview, Holm answered the basic question, “What is WELS Foundation?” in addition to giving more details about how WELS Foundation helps donors make gifts to the ministries that are closest to their hearts, in the most efficient way possible.

Watch the latest vlog with Jim Holm, or listen to the interview in your favorite podcast app by searching for “KML Foundation Table Talk.”

To learn more about WELS Foundation and how it can help you support the ministries you care about, contact Executive Director Jim Holm at 414-256-3206.

 

 

WELS Endowment Fund finishes in 90th percentile of Commonfund study

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We have some very exciting news to share with you!

Here’s the technical part of the news:
In the recently released Council on Foundations—Commonfund Study of Investment of Endowments for Private and Community Foundations®, the WELS Endowment Fund’s 2019 net investment return of 22.39% placed in the 90th percentile of the 265 foundations who participated in the study.

So, what does that mean for ministry?
Well, this is great news because the better the investment returns for the WELS Endowment Fund, the more the fund earns. And the more it earns, the bigger the distribution checks will be to our ministries that have an endowment fund through WELS Foundation—and those distributions help fund gospel work. We praise God for his blessings!

Here’s a portion of the September 28 press release:
With 265 participating foundations representing combined assets of $104.7 billion, the Study is believed to be the most comprehensive annual survey of its kind. This is the eighth year that Commonfund Institute and the Council on Foundations—two leading organizations in the field of foundation investment and governance policies and practices—have partnered to produce this research.

Contact us about setting up an endowment fund:
To learn more about how an endowment fund can support your ministry for years to come, contact Executive Director Jim Holm at 414-256-3206.

Inspired by a donor’s gift, a WELS giving counselor follows his lead

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Single-life annuity illustration (two-life annuities are also available).

Arnie Nommensen is retired after serving WELS first as a teacher and then as a Christian giving counselor. As a giving counselor he assisted members with different options for supporting WELS ministry. Arnie recalls working with one gentleman whose “wish was to leave as much as he could to support the Lord’s work when the Lord took him to heaven.”

“The charitable gift annuity (CGA) served his purpose,” says Arnie. A CGA provides a donor with a tax deduction when they make a gift of cash or securities in exchange for fixed quarterly payments for life. When the Lord calls them home, the remainder of the gift goes to proclaim the gospel through the designated ministry.

“He knew things could change in his life and his expenses could use up much, if not all, of his savings,” says Arnie. So, by setting up a CGA, the donor ensured he’d have income to cover his expenses while preserving his hoped-for gifts toward ministry.

The donor so enjoyed giving through his first CGA that he set up more. “He had enough CGAs set up that the payments from them gave him enough income to set up a new CGA each year,” says Arnie. The donor would designate the CGAs to correspond with the ministries he was supporting. “He enjoyed watching the work of these ministries and praying for their success.”

That donor’s thinking impacted Arnie. “Realizing Christ has done all we need for our salvation, we want to find ways to thank him. Seeing how the CGAs had been a blessing to this gentleman, my wife and I have been setting up CGAs corresponding to the areas of the Lord’s work that affect our lives.”

Does the CGA sound like a giving instrument that could work for you? The illustration above shows how a CGA would work for someone 75 years old with payments beginning immediately (payments can also be deferred to a future date). Transferring appreciated assets (e.g., stocks) may be an even more beneficial way to fund your charitable gift annuity since it may allow you to avoid capital gains taxes now and pay them in a more favorable way later.

Your local WELS Christian giving counselor can share more (at no cost or obligation) about how a CGA may be a good way for you to give to the ministries you love.

Supporting WELS mission work through endowments

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Thanks to the generosity of God’s people, WELS Foundation has been blessed to distribute $3.1 million from more than 350 endowments through its endowment program this year. Areas that benefited from the distributions include WELS missions, ministerial education schools, congregations, and other WELS-affiliated ministries.

One of those WELS-affiliated ministries that was blessed through endowment distributions was the Lutheran Women’s Missionary Society (LWMS).

Back in 2015, Mrs. Karen Fischer, who was then the president of LWMS, approached Mr. Jim Holm, the executive director of WELS Foundation, about setting up an endowment through which LWMS could support WELS mission work.

Holm recalls, “Karen knew that the ladies who support LWMS have such a passion for missions, and an endowment would give them another way to continue to provide for the Lord’s work after they were called home to heaven. WELS Foundation was thrilled to establish this partnership with LWMS to benefit the spread of the gospel both locally and worldwide.”

Fischer was also grateful for the partnership. “WELS Foundation staff walked our entire LWMS board through the process with grace and ease. It was such a blessing,” she recalls. “This new endowment fund allowed LWMS members to give a gift at any time, knowing it would generate an annual distribution in perpetuity . . . leaving a mission support legacy even after they receive their heavenly crown.”

Since 2015, WELS Foundation has distributed over $26,000 to LWMS through two endowment funds. The annual distributions support WELS mission opportunities as selected by the LWMS board of directors. The monies are distributed above and beyond the annual mission collections of members and increase the impact of LWMS giving.

The endowment distributions also allow LWMS to address any immediate needs of WELS missions. For example, a July 2020 endowment fund distribution of $7,976 was donated to support WELS Campus Ministry, in conjunction with its 100th anniversary.

Rev. Larry Schlomer, Board for World Missions administrator, says, “There is so much opportunity in the LWMS endowments that are managed by WELS Foundation. Each year the distributions from these funds go to support Home and World Missions projects. Gospel work in Mexico, Africa, Asia, and the United States have all benefited.”

Mrs. Becky Jungwirth, LWMS treasurer, appreciates the peace of mind that comes from knowing that WELS Foundation shares in LWMS’ mission. She adds, “Working with WELS Foundation is an easy process because they provide all administration and investment management (through WELS Investment Funds) for our endowments. Partnering with WELS Foundation has been a real blessing for LWMS.”

To learn more about adding to an existing endowment or setting up an endowment for a ministry close to your heart, contact your local WELS Christian giving counselor at wels.net/giving-counselors. To learn more about WELS Foundation, visit wels.net/foundation.

 

 

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A great time to consider a charitable gift annuity

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If you’ve been looking for a tax-wise way to financially provide for you or a loved one—and ultimately give a thank offering to Jesus for WELS ministry—now is a great time to consider moving forward with a charitable gift annuity (CGA). CGA payment rates are going down as of July 1, so if you establish a CGA before then you will receive more in payments each year (for example, a $10,000 CGA would provide $30-50 more per year).

Many WELS members enjoy how a CGA allows them to make a gift of cash or securities in exchange for fixed quarterly payments for life and a charitable deduction now (plus savings on capital gains tax if you fund the CGA with appreciated assets). When the Lord calls you home, the remainder of the gift goes to proclaim the gospel through the WELS ministry you designate.

Here’s how it would work for someone 75 years of age:

You can do a personalized illustration based on your age. Another option is the deferred gift annuity, which provides a tax deduction now while payments start in the future.

If interested, call 800-827-5482 and we’ll connect you to your local WELS Christian giving counselor for free assistance with taking the next step.

The CARES Act and its impact on planned giving

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We are certainly living in unprecedented times, aren’t we? COVID-19 has changed every aspect of our lives. We want to keep you updated on anything related to COVID-19 that will impact charitable giving, like the CARES Act.

The U.S. Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the president has signed it into law. Below are some of the highlights as they relate to charitable giving.

Please contact your WELS Foundation team at [email protected], your WELS Christian giving counselor at wels.net/givingcounselors, or other mission advancement representative at other WELS-affiliated ministries with questions at any time.

Highlights of the CARES Act*
• The law allows an above-the-line income tax charitable deduction up to $300 even if you don’t itemize on your 2020 income tax return. The tax break is available to people who claim the standard deduction, which is $12,400 for singles or $24,800 for married-filing jointly in 2020. This provision was inserted specifically to encourage charitable giving this year.

• The CARES Act impacts owners of Individual Retirement Accounts (IRAs) by providing a temporary waiver of Required Minimum Distributions (RMDs) for 2020, allowing IRA owners to keep funds in their IRAs (and other qualified retirement plans). The decreased value of their IRAs may motivate some people to keep funds in their accounts temporarily, waiting to see what happens in the investment markets. Donors age 70.5 and older may still make direct distributions to charity from their IRA, just as before, if it makes financial sense to do so.

• For the 2020 tax year only, donors may elect to apply a 100% of adjusted gross income (AGI) limit to cash gifts to public charities. Gifts to donor advised funds (DAFs) don’t qualify. This means that in 2020, a donor who deducts 30% of AGI in long-term appreciated property gifts and elects the 100% of AGI limit for qualified cash contributions will be able to also deduct up to 70% of AGI for qualified cash gifts, a total deduction of up to 100% of AGI. If this donor uses all available deductions for qualified cash gifts, that donor will pay no federal income tax in 2020. (Please note: Donors should consult their tax advisers to determine whether the 100% election makes sense for them.)

• The new law, coupled with current financial uncertainty, has created an appealing climate for those concerned about their income from investments. Please let us know if would like to learn more about how you can transfer assets (cash, securities, real estate, etc.) into a secure income stream for yourself and/or others while also providing for the Lord’s work.

• Recent steps taken by the Federal Reserve Bank on federal lending rates have made certain charitable gift strategies more appealing than they have been in some time. Please let us know if would like to learn more about how you can reduce the size of your taxable estate for a planned transfer to heirs, all while making a sizable gift to the Lord’s work.

• If you’re thinking of updating your estate plan, we would be pleased to help you consider including a gift to your local congregation and/or other WELS or WELS-affiliated ministries.

In the meantime, this is a good time to just stay in touch. Please reach out to your Christian giving counselor or mission advancement representative with questions about what is going on locally and nationally to discuss those ministries that are of most interest to you. They will be glad to hear from you.

Please continue doing everything you can to help keep yourselves, your families, and your communities safe. And as with all situations in life, we lean on our Savior’s promises that he will never leave us or forsake us. May God bless you all!

*CARES Act summary compiled by Dan Shephard of The Shephard Group

The SECURE Act and Qualified Charitable Distributions (QCDs)

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The “Setting Every Community Up for Retirement Enhancement” Act, aka the SECURE Act, was signed into law on December 20, 2019. The SECURE Act, which went into effect on January 1, 2020, changes many of the rules governing retirement plans, including several provisions relevant to making charitable IRA rollover gifts (also known as qualified charitable distributions, or QCDs).

Under the SECURE Act, the charitable IRA rollover, or QCD, remains a terrific way to make a tax-free gift to WELS ministries using your traditional IRA.

How Do I Qualify?
• You must be 70½ years old or older at the time of the gift.
• Gifts must go directly from your IRA to a charity such as your congregation, a WELS-affiliated ministry, or WELS/WELS Foundation.*
• Gifts must come from a traditional or Roth IRA account.
• Gifts cannot exceed $100,000 per donor per year.
• You cannot receive a benefit in return for your gift, such as tickets to a gala.

Benefits of a Charitable IRA Rollover Gift (QCD)
The SECURE Act increased the age at which individuals must start taking required minimum distributions (RMDs) from 70½ to 72. (Note: Those who turned age 70½ on December 31, 2019 or earlier must continue taking RMDs.) Once a person reaches 72, one of the great benefits of a QCD is that it will count toward your RMD. However, even if you have not reached age 72, there are still good reasons to consider a QCD at 70½. First, a QCD offers all the benefits of an income tax charitable deduction, even if you don’t itemize your deductions. You can’t claim a deduction for your QCD, but your QCD is not included in your income. Your QCD is always a tax-free gift.

Another reason to consider a QCD at age 70½ is to reduce the balance in your IRA. At age 72 or older, your RMD is based on the balance in your IRA at the end of each year multiplied by a factor published by the IRS. You may be in a position where you don’t want or need the income from your IRA. Higher income can increase your Medicare premiums and create other tax issues.

Another change brought on by the SECURE Act is the elimination of the stretch IRA for many beneficiaries. With a few exceptions, children and other non-spouses who are more than ten years younger than you no longer can stretch their withdrawals from an IRA they inherit from you over their life expectancy. Instead, they must withdraw and pay income tax on all funds within ten years. This change means that it may be most tax efficient for you to support WELS ministries and provide for your heirs by making QCDs during your life and setting aside other assets to pass on to your loved ones. You may also want to consider assigning your IRA by beneficiary designation to WELS Foundation to provide life-income payments for your loved ones and to designate the remainder for the Lord’s work.

Learn more about making an IRA charitable distribution at wels.net/qcd. Your financial planner and local WELS Christian giving counselor can help guide you through the process.

*QCDs received by WELS Foundation can be designated by the donor for any WELS or WELS-affiliated ministry.

Furthering ministry while helping your retirement

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Many WELS members, seeking to thank Jesus for his grace and blessings, find the charitable gift annuity to be the ideal tool for supporting gospel ministry because it provides fixed payments throughout your retirement years and directs the remaining value to the Lord’s work. Marlin and Sharon Braun are an example of this. In fact, they have set up multiple charitable gift annuities (CGAs) and plan to do more.

Single-life annuity illustration (two-life annuities are also available).

We first heard about CGAs from Sharon’s parents, who set some up years ago for their retirement. Since we had been a bit negligent in funding our own IRAs over the years due to financial situations, we felt this was a good way to try and “catch up” on our retirement planning once Marlin turned 60. So far, we have funded about half of our goal and feel good that not only is the money being well used to further our synod’s work (when we go to heaven, numerous WELS entities of our choice will be receiving donations), but we have helped our own retirement plan. It has been a pleasure and quite straightforward working with our Christian giving counselor each time we have been ready to fund another of our CGAs.

Besides the gift to charity and dependable quarterly payments, a CGA also offers tax advantages. The illustration above shows how a CGA would work for someone 75 years old with payments beginning immediately (payments can also be deferred to a future date). Transferring appreciated assets (e.g., stocks) may be an even more beneficial way to fund your charitable gift annuity since it may allow you to avoid capital gains taxes now and pay them in a more favorable way later.

Your local WELS Christian giving counselor can share more (at no cost or obligation) about how a CGA may be a good way for you to give to the ministries you love.

 

There’s an endowment for you

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WELS Foundation offers several options allowing individuals, families, churches, and WELS-affiliated organizations to provide ongoing support to WELS ministries.

  • WELS endowments – Contribute to one of the synod-established endowments providing regular support and stability for missions, ministerial education, and the operating fund.
  • Donor designated endowments – Through WELS Foundation, an individual or family can establish an endowment for the benefit of WELS ministries they designate, such as their church, school, and synod.
  • Congregation endowments – A church or WELS organization can also establish an endowment to benefit local causes like community outreach, scholarships, and building maintenance, as well as wider synod efforts.

For free assistance with a gift or setting up an endowment, contact your local WELS Christian giving counselor.

Christian estate planning quiz

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The following “true or false” quiz will help you gauge your familiarity with Christian estate planning. To see how you did, check out the answers that follow.

True or False

  1. ____ I’m young; I don’t need an estate plan.
  2. ____ If my will is up-to-date, I’m all set.
  3. ____ A will is a secular document.
  4. ____ Adding a planned gift for the Lord’s work means starting over with my attorney.
  5. ____ If a person dies without a will, the state automatically takes one half of the estate for probate fees.
All the answers are false. 1. Young families need a will to designate a guardian for minor children. Plus, even young people own assets that can be shared with family and the Lord’s work. 2. Be sure your estate plan coordinates the beneficiary designations for major assets not controlled by your will. 3. You can witness your Christian faith to loved ones through a Christian preamble in your will. 4. Some planned gifts can be arranged with the stroke of a pen after consultation with your advisors. 5. While it is true that the state, in the absence of a valid will, dictates the disposition of the estate, it certainly does not automatically receive half the amount. However, if you die with no will, there may be a large increase in probate costs. Plus, the state—not you—will determine who cares for your loved ones; and there will likely be no charitable distributions.

If you would like a refresher in how to arrange an estate plan that maximizes benefits for loved ones while supporting the spread of Christ’s gospel, review our booklet, Estate Planning for the Christian Steward, then contact your local WELS Christian giving counselor for free assistance.

“A way to gift to the charities I love to support”

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Phyllis’ Story

Single-life annuity illustration (two-life annuities are also available).

Years ago, when Phyllis Moore and her husband John (who is now with Jesus) sold their business, each established a charitable gift annuity (CGA). At the time, they did this primarily for financial reasons. A CGA provides a charitable deduction when the gift is made, then fixed quarterly payments to the donor until he or she goes to heaven—at which point the remainder goes to the designated charity. “But,” Phyllis says, “over the years it has become a way to gift to the dozen charities I love to support.”

She uses the payments she receives to give to her church, WELS schools, a campus ministry, and parasynodical organizations—as well as medical foundations. “I like the letters and phone calls from students thanking me. I know how they need it. Those future pastors and teachers are needed, and I am glad I can help them.”

Your Story

The combination of tax advantages, dependable payments, and accessible minimum gift amount make the CGA one of the more popular planned giving instruments. Perhaps it can fit into your Christian giving story as it did for Phyllis. For example, if you are 45 or older and would like to make a gift towards the Lord’s work that provides income during retirement—and a charitable deduction now (while income is higher), consider a version of the CGA called the deferred gift annuity. A deferred gift annuity allows you to make a gift in exchange for fixed quarterly payments starting at a future date and continuing until you go to heaven. Pictured is how a deferred gift annuity would look for someone who is 55, assuming payments begin in ten years. Transferring appreciated assets, e.g. stocks, may be an even more beneficial way to fund your deferred gift annuity since it may allow you to avoid capital gains taxes now and pay them in a more favorable way later.

Your local WELS Christian giving counselor would be happy to discuss with you further how this type of gift could work for your situation.

Why give from your IRA?

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Lawrence Frank of Stevensville, Mich., points to 2 Cor. 9:6-7 as his motivation for giving to God: “If you give from your heart—not because you expect something back—the Lord does reward you.” He and his wife, Gini, give from their IRAs to avoid taxes on their required minimum distributions (IRA charitable distributions are free from federal and potentially state income tax for anyone 70.5 or older). Lawrence says it’s “easy” to give to multiple ministries through WELS Foundation, which distributes the funds per a letter of instruction. If interested in this giving opportunity, visit wels.net/qcd or call your local WELS Christian giving counselor at 800-827-5482.

Why an endowment fund?

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An endowment fund is a donor restricted gift that is not spent immediately but is invested. Endowments annually distribute a portion of the invested funds to provide ongoing, predictable financial support for our Savior’s ministry.

Giving through an endowment fund provides the following benefits:

  • An endowment provides a framework for receiving cash gifts, appreciated property (stocks or real estate), and other planned gifts, such as through a will, trust, beneficiary designation on a retirement account, or insurance proceeds.
  • An individual can use an endowment to continue his or her charitable gifts even after being taken to heaven.
  • An endowment provides additional funding for current operations as well as money for future and expanded efforts.
  • An endowment is an ongoing witness of Christ’s love that compelled you to make a current or estate gift (will, etc.) to glorify God and share his love with others.

A donor or group of donors can work with WELS Foundation to establish an endowment fund. WELS Foundation provides a full-service endowment program including promotional material, endowment statements, investment management, and annual distributions.

Learn more about supporting gospel through an endowment fund. For free assistance, contact your local WELS Christian giving counselor.

Financing your annual gifts forever

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Many people, out of grateful thanks to God, give a set amount to WELS each year. We praise Jesus for this consistent generosity and faithfully use these gifts to carry out our ministry (see “Your Gifts, God’s Blessings—An Annual Report to Our Members”). Realizing the need for these consistent gifts, some have taken a step to ensure their gifts continue forever!

In their estate plans, they have arranged for part of their remaining assets to go to be given to a WELS endowment fund. The result will be that their current annual gifts continue in perpetuity. To God be the glory!

Here’s how it works: A gift to an endowment fund is not spent immediately but is invested in a diversified investment portfolio. Annual distributions from the endowment funds are used to provide a source of ongoing financial support for our ministries. The endowment is managed in such a way that the distributions are anticipated to keep up with inflation. This method preserves the spending power of each year’s payout.

How do you figure the amount to give to extend your annual gift? Using the typical endowment distribution policy of four percent each year, a bequest that is 25 times the amount of your annual gift will assure that it is financed forever.

Individuals, families, churches, and other WELS organizations can also set up their own endowment funds through WELS Foundation for the benefit of WELS gospel ministry. Learn more and receive free assistance with this type of gift through your local WELS Christian giving counselor. We are grateful for your annual gifts and, as God has blessed you, invite you to explore how you can continue that support.

Wisconsin allows tax-free IRA distributions to charities

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In March 2017, Nick Krueger, a member at St. Mark’s, Watertown, Wis., and staff member of Representative Terry Katsma of the Wisconsin State Assembly, invited fellow St. Mark’s member, WELS director of Christian Giving Kurt Lueneburg, to testify in front of a legislative committee on a proposed bill that would apply the federal government’s treatment of qualified charitable distributions from an IRA to Wisconsin’s tax code (pictured). That bill was adopted into Wisconsin’s budget law as of 2018, meaning Wisconsin residents 70.5 or older can make charitable distributions of up to $100,000 from their IRAs tax-free at the federal and state levels. Lueneburg shares, “Since 2007, members of our church body who live in Wisconsin have made over $1.8 million in qualified charitable distributions to support our church body’s gospel ministry. Year over year giving since 2007 shows a trend of growing interest. We’ve heard donors mention it would be nice if Wisconsin allowed tax-free distributions as well. Thus, this bill has the potential to increase donor satisfaction and the positive impact on Christ’s work.”

Another prosperous year

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As Christians, we are thankful all year long for everything that God has given us, but the fall season has traditionally been a time for us to reflect on our blessings. It’s a good time to take notice of the abundance we have received through Jesus and to consider how we should manage our gifts from God.

Making a year-end gift is a wonderful way of expressing your gratitude to God for the blessings you have received while helping fund the Lord’s work at the same time. Another reason to make a charitable gift before year’s end are the tax benefits. For example, you can give more for less through a gift of appreciated assets (e.g., stocks, mutual funds, etc.). And donors who are 70.5 or older can make tax-free charitable distributions from their IRAs.

Contact your local WELS Christian giving counselor for information on completing a year-end gift or any question you may have about Christian giving and/or your estate plan.

The perfect tool to meet major goals in retirement

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Single-life annuity illustration (two-life annuities are also available).

Retired WELS teachers Ron and Joan Zahn have established several charitable gift annuities (CGAs) over the years. “They seemed to us a perfect tool through which we could meet two major goals in retirement.” Those goals include giving to the Lord while having money for their own needs. As you can see from the illustration, a CGA is a great way for someone 60 or older to do just that (shown for someone 75 years old with payments beginning immediately—payments can also be deferred to a future date).

Giving through CGAs provided the Zahns with “the satisfaction of furthering ministry.” They said, “We found it to be fun to decide which organizations or entities would be the recipients.” They decided to support endowment funds for missions and ministerial education as well as several congregations and area Lutheran high schools that have been a blessing to their family.

If you are interested in a charitable gift annuity, your local WELS Christian giving counselor can assist you.

The donor advised fund – a popular way to give

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“The growth of donor advised funds (DAFs) may be the biggest story in the charitable sector during the last decade,” according to planned giving consultant, Alan Cantor. What is a donor advised fund and why is it so popular?

With a donor advised fund, an individual, family, or corporation makes an irrevocable, tax-deductible contribution of cash, securities, or other property to WELS Foundation. At any time thereafter, the donor recommends distributions to qualified WELS ministries. The fund can be established with current gifts, deferred gifts (such as charitable gift annuities and charitable remainder trusts), and testamentary gifts (such as wills, revocable trusts, or beneficiary designations for life insurance policies or retirement accounts).

What’s driving the growth of this type of gift? A donor advised fund provides an alternative to the private family foundation. You can accomplish many of the same goals, but with far less administrative work and expense. Some of the benefits include:

• Donor advised funds (DAFs) provide an income tax charitable deduction in the year of the gift to the DAF regardless of when distributions are made.
• As with all gifts of long-term appreciated securities, none of the appreciation is subject to capital gains tax.
• Donors enjoy the convenience of deciding when to contribute to the fund and when to make recommendations for distributions to ministry. They can give to the fund in the years when they have greatest tax liability.
• Donors enjoy encouraging family stewardship by involving children and other loved ones in the decision-making process for the grant recommendations.
• As with all gifts to ministry, there is joy in giving to the Lord and supporting areas of ministry close to your heart.

Learn more here, then contact a WELS Christian giving counselor if you are interested in starting a donor advised fund.