You don’t have to be a Washington insider to know that discussion of federal tax reform is in the air. It remains to be seen whether the proposed changes may impact you and your family, but regardless, tax changes are likely afoot.

These changes could alter incentives and rules affecting charitable giving that have been integral to this country’s tax code for nearly a century. The various proposals suggest we might see reduced tax rates, compressed tax brackets, and increased standard deductions.The home mortgage interest and charitable deductions may survive tax reform, but fewer taxpayers may be able to benefit from these deductions.

But what does this mean for gifts made now? Should donors wait to see what happens before planning their charitable gifts? In the end, the elimination or reduced benefit of the income tax charitable deduction would still preserve many creative opportunities to make gifts to Carnegie Mellon.

By creating a long-term giving strategy, donors can still support their charitable passions and reap the tax benefits of their philanthropy. Assuming life income gifts, such as charitable gift annuities and charitable remainder trusts, will still offer capital gain tax avoidance or deferral as well as favorable taxation of payments, there are compelling reasons to consider these gift options. A well-designed life income plan can convert idle or illiquid assets into an attractive income stream and benefit CMU at the same time, even if the law changes to eliminate the income tax charitable deduction.  

Bequests and beneficiary designations are meaningful and easy ways for supporters of any means to make extraordinary gifts. Even though most estates are not impacted by tax concerns, supporters continue to give generously from their estates for several reasons. Bequest donors like the anonymity and flexibility of estate giving as well as the joy of knowing they can make a material difference for the causes that are dear to them without concern about present financial uncertainty.

For most donors, however, tax incentives are just one reason for charitable giving. That’s because we want students to benefit from education, we still need cures for diseases, we will still seek out the arts to uplift and enrich our lives, and we still aid those less fortunate. Smarter, easier ways to make charitable contributions through gift planning will always make sense for many who wish to make a positive impact in the world and here at CMU.