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Russell James, J.D., Ph.D., CFP® is a professor in the Department of Personal Financial Planning at Texas Tech University. He holds the CH Foundation Chair in Personal Financial Planning and directs the on-campus and online graduate program in Charitable Financial Planning. Additionally, he is an adjunct professor at the Texas Tech University School of Law where he teaches Charitable Gift Planning. He graduated, cum laude, from the University of Missouri School of Law where he was a member of the Missouri Law Review. While in law school, he received the United Missouri Bank Award for Most Outstanding Work in Gift and Estate Taxation and Planning. He also holds a Ph.D. in consumer economics from the University of Missouri, where his dissertation was on charitable giving.

Prior to his career as an academic researcher, Dr. James worked as the Director of Planned Giving for Central Christian College in Moberly, Missouri for 6 years and later served as president of the college for more than 5 years, where he had direct and supervisory responsibility for all fundraising. During his presidency the college successfully completed two major capital campaigns, built several new debt-free buildings, and more than tripled on-campus enrollment.

Dr. James has over 150 publications in academic journals, conference proceedings, and books. These predominantly focus on statistical analysis and experimental research related to gifts, estates, and property. He has been quoted on charitable and financial issues in a variety of news sources including The New York Times, The Wall Street Journal, CNN, MSNBC, CNBC, ABC News, U.S. News & World Report, USA Today, the Associated Press, Bloomberg News and The Chronicle of Philanthropy.


Visual Planned Giving - Chapter 3 - Elements and Timing of a Charitable Gift

Wednesday, November 29, 2017

In the third chapter of Visual Planning Giving: An Introduction to the Law & Taxation of Charitable Gift Planning, author Russell James delves into several nuances and specifics on charitable giving. A fundamental issue for advisors working with charitable donors is to understand the consequences of the gift's timing. A promise to make a gift, is simply an instruction to a donor's agent to make a gift. That promise can take different forms, one which allows the donor to control or retake the funds, or to a charity with instructions for it to go to a specific person, but this is still just a promise. A charitable gift is not made until the donor delivers valuable property to the charity, or the charity's agent. Even a legally enforceable pledge is not a gift until the donor fulfills it. The timing of a completed gift plays out in several important, real-life ways. For example, a donor who mails a check to charity, has made a gift when the enveloped is placed in the Post Office mailbox, because USPS is considered the charity's agent. Interestingly, a private delivery service would not qualify. A donation made by credit card is effective immediately, even if the donor ultimately does not pay the balance on the credit card. On the other hand, a check which bounces is not a gift, because the check is not valuable property. While a gift to a specific person is not deductible, donors can restrict gifts to a class or category of persons.

Some types of restrictions of charitable gifts do not interfere with the charitable deduction. Under state law, donors can generally retain the right to have their donation returned if the funds are not used for the charitable purposes expressed in the gift agreement. This serves only to ensure funds are used for the organization's purposes, and is deducted just like an unrestricted gift. C-Corporations which are subject to a 10% limitation on charitable gifts, are allowed a 2.5-month lookback for gifts, if the Corporation's Board has already discussed doing so. This allows the corporation to make a gift after it has determined its net income for the year.

Mr. James has created a set of 65 videos for his "Complete Charitable Planning Training Series," to help his readers understand Chapter 3 and the entire book.

Visual Planned Giving - Chapter 2 - A Super Simple Introduction to Taxes

Wednesday, November 22, 2017

In the second chapter of Visual Planning Giving: An Introduction to the Law & Taxation of Charitable Gift Planning, author Russell James gives a basic introduction to federal income taxes. Mr. James starts by breaking down the two largest forms of income tax, ordinary income and capital gains. As a taxpayer's income rises, so does their effective tax rate. Charitable income tax deductions reduce the amount of money subject to tax, and thus these deductions are more valuable to taxpayers with higher incomes.

Charitable income tax deductions are an itemized deduction, and so taxpayers who take the standard deduction cannot take advantage of it. Still, itemizers can benefit from planned giving by deferring recognition of income taxes.

A separate tax system applies to capital gains on the sale of investments. Capital gain consists of the sale price minus "basis." In general, basis is your cost of acquiring the property, less any allowance for depreciation or amortization. Taxpayers who hold stocks which have risen in value, or developed real estate, for which they have taken depreciation deductions, can face significant capital gains taxes if they sell. Donations of appreciated property provide very attractive tax benefits. The donor avoids paying the capital gains taxes which would have accrued if they sold the property. Furthermore, they can often receive a tax deduction based on the asset's fair market value. When the charity sells the property, it won't pay taxes. In short, a gift of appreciated property results in a much more significant gift than if the taxpayer sold the property, then donated the proceeds to charity.

Mr. James has created a set of 65 videos for his "Complete Charitable Planning Training Series," to help his readers understand Chapter 2 and the entire book.

Visual Planned Giving - Chapter 1 - Introduction: The Secret to Understanding Planned Giving

Wednesday, November 15, 2017

Russell James is truly a bright light in the charitable world. Not only is he a leading researcher and thinker in the area of charitable giving, but he is one of the most generous. He repeatedly offers the fruits of his efforts to our industry, for free. We are honored to present his book, Visual Planning Giving: An Introduction to the Law & Taxation of Charitable Gift Planning, to our readers.

In his first chapter, Russell emphasizes the complexity of planned giving. He identifies multiple issues that contribute to this complexity, including several different tax regimes, state law, federal law, appraisals, business entities, arcane documentation requirements, and more. However, at its core, planned giving can do two things; it can lower taxes, and trade a gift for income. Financial advisors, and fundraisers should keep these basic principles in mind when considering what planned giving can accomplish.

Due to the plethora of possibilities for trading a gift for income, the issues quickly become cluttered. A donor seeking to reduce taxes and/or trade a gift for income could utilize a CGA, CRUT, CRAT, Flip-CRUT, NIMCRUT, NICRUT, or PIF. However, the core concepts remain the same. Each one of these vehicles allows a donor to lower taxes, and trade a gift for income. The advisor or fundraiser should view these structures as options available to meet the donor's needs. In addition to meeting donors' income needs, planned giving can lower taxes. Lower taxes benefit the client, since gifts are cheaper; the advisor, because it provides value to the client, while maximizing the assets under management; and charity, because it makes large gifts more affordable.

Fundraisers should have a basic understanding of these gift vehicles. This may seem counterintuitive, since outright, cash gifts provide instant value to the charity, while the charity may have to wait many years to fully realize the donor's gift in a planned giving arrangement. However, only a small portion of a donor's assets consists of cash. Fundraisers who shun the complexities of planned giving in favor of cash gifts are asking for money out of the smallest bucket, since only a small fraction of assets consist of cash.

Planned giving is also an important tool for the financial advisor. Understanding these issues may help the financial advisor attract high net-worth clients, since those clients tend to do the most charitable giving. A variety of planning techniques, such as family foundations, donor advised funds, and CRTs, allow the advisor to continue to manage the funds. Moreover, because these entities are not subject to tax, the advisor has more assets under management than if the donor sold the asset, and reinvested the cash.

Mr. James has created a set of 65 videos for his "Complete Charitable Planning Training Series" to help his audience understand this complex area. Please click here for Chapter 1, or here for the entire book.

Visual Planned Giving - An Introduction to the Law & Taxation of Charitable Gift Planning

Wednesday, November 15, 2017

The book, Visual Planning Giving: An Introduction to the Law & Taxation of Charitable Gift Planning, is designed for fundraisers or financial advisors seeking to expand their knowledge about charitable gift planning. It addresses all of the major topics in planned giving law and taxation. Over 1,000 illustrations and images guide the reader through complex concepts in a visual and intuitive way. The knowledge comes from years of teaching Charitable Gift Planning at the graduate level. Russell James makes this topic accessible and enjoyable for the busy professional.

Visual Planned Giving - Chapter 4 - How to Document Charitable Gifts

Thursday, August 10, 2017

In the fourth chapter of Visual Planning Giving: An Introduction to the Law & Taxation of Charitable Gift Planning, author Russell James outlines how to keep credible records of all gifts. Documenting charitable gifts is an essential, although less than glamorous, area of charitable planning. A lack of proper documentation can result in a total loss of the charitable deduction even if the taxpayer does not overstate the gift. Gifts of cash under $250 only require a proof of the gift, which can come in the form of a canceled check, credit card statement, or note from the charity. For a gift of cash exceeding $250, the donor must have a note from the charity indicating the amount, and stating no goods or services were provided in return for the gift, or if any were provided, a description and value of the items. The documentation requirements are based on individual, not cumulative, gift amounts.

IRS imposes different documentation requirements for noncash gifts, depending on the size of the gift, and the potential for abuse. These procedures must be complied with strictly, or the taxpayer can lose the entire deduction, even if the valuation of the gift is correct. Gifts of property under $250 must be substantiated with a receipt from the charity with the date, donor, location, and description of the property. Additionally, the donor must have reliable records proving the property's value. For gifts of property over $500, the donor must include the information mentioned, plus Form 8283. Next, for gifts of property over $5,000, over than publicly traded securities, donors must obtain a qualified appraisal. The donor must have in their possession all the above items, and include a summary of the qualified appraisal on Form 8283. Lastly, with gifts of property over $500,000, or gifts of artwork exceeding $20,000, the donor must include the entire qualified appraisal with the return. The lower limit for artwork recognizes the difficulty in valuing artwork, and the potential for abuse.

Mr. James has created a set of 65 videos for his "Complete Charitable Planning Training Series," to help his readers understand Chapter 4 and the entire book.