Farmers have available to them one of the best tools for supporting their church and/or charitable organizations they care about.
While this has been a good opportunity for years, it’s particularly helpful in light of the Tax Reform and Jobs Act of 2017, because fewer people are likely to itemize their deductions.
By gifting commodities such as corn, soybeans, milk or animals, farmers can increase their generosity compared with donating cash.
When donating commodities, farmers don’t report the sale as income – money from the sale of their products doesn’t go to them – but still are able to deduct their full cost of production.
In lowering their income, farmers also lower their self-employment tax and their federal and – if applicable – state income taxes.
The process is good for charities because farmers often can make a significantly larger commodity gift at the same “net cost” as a smaller cash gift.
While farmers can give commodities directly to a charity, many find it helpful to use a Mennonite Foundation (an affiliate of Everence®) Donor Advised Fund.
By using a DAF, a farmer donating crops simplifies the process for the elevator by making a single gift, rather than making gifts to multiple organizations or on multiple occasions.
In addition, the farmer can give when prices are higher, while making recommendations for distributions at a later time.
For more information, contact your Everence Charitable Services representative or Stewardship Consultant.