Fundraising for your not-for-profit
Can my not-for-profit take donations of real estate?
Most likely, yes! If you qualify under IRS regulations as a qualifying not-for-profit organization you could be a good candidate for accepting donations of real estate.
But I'm not big enough...
With our unique partnerships, we have a team in place that can help not-for-profits of any size be able to accept donations of real estate. We work with a not-for-profit intermediary that funds the whole process, handles the paperwork and disperses all of the funds. You do not have to be active in the process and just receive a check at the end of the transaction.
What kind of real estate qualifies for donation?
Titled property of almost any type qualifies for donation. This includes residential, commercial, raw land and more. (Time shares do not qualify.)
How much will it cost?
Nothing. The purchase of the property, any necessary repairs, and all holding costs are covered by the intermediary. Since they take on the risk of all of the up front costs, they will hold title to the property throughout the donation process.
How much will we receive?
That will be up to your donor. They do not have to donate the entire proceeds of a property donation to charity. In some instances, your donor may keep a portion of the proceeds for other purposes. We will take direction from your donor as to the amounts to be distributed to you.
In a typical transaction, your charity will receive 90% to 99% of the net proceeds as directed by the donor. All fees associated with the transaction including repairs, holding costs, closing costs and commissions will be paid from the proceeds of the sale of the property prior to calculating the final payout. The intermediary retains $20,000 (minimum) to $30,000 (typically) as its share of the net charitable funds. Since it is a not-for-profit itself, this portion of the donation is tax deductible to your donor.
How does the process work?
1. Set up a consultation with us and your donor to determine if the property and charity are a good fit. We'll discuss your donor's wishes for the property.
2. With the basic information at hand, your donor will receive an initial Net Gift Estimate to summarize the likely outcome of the gift, using values assumed in the preliminary discussions.
3. Your donor will sign an agreement with the intermediary to sell the property to an them.
4. Obtain an appraisal
5. Transfer the property deed to the intermediary. The gift will be complete, and your donor will receive all documentation (including IRS Form 8283) for their tax file. All closing costs and prorations are funded by the intermediary.
6. After accepting the gift, we will undertake repairs, remediation, and marketing the property for sale. The intermediary will fund repair and holding costs during the donation process.
7. Upon the sale of the property, the net proceeds will be distributed among all the nonprofit(s) benefiting from the “net charitable funds”.
Want to know more?
Set up a free, no-obligation, discussion about how you can fund your passion through a gift of real estate.