Business Tax Credit for Creating or Contributing to Nativity Church of Fargo Endowment Funds
Duane J. Koble
North Dakota is one of only a handful of states that offer tax credit for charitable gifts and endowment development. The 2007 North Dakota Legislative Session created an income tax credit specifically for charitable gifts made to qualified endowments by businesses, and the law expands the current income tax credit for individual planned gifts to charities.
Nativity Church of Fargo was instrumental in the creation of this law, which allows for the following:
- The legislation created a new state income tax credit for gifts made to qualified endowments. A qualified endowment is defined within this legislation as an “irrevocable fund held by a North Dakota incorporated or established organization that is a qualified nonprofit organization; or a bank or trust company holding the fund on behalf of a qualified nonprofit organization.” Funds established with Nativity Church of Fargo do qualify under this law.
- The new credit for gifts to endowments is equal to 40% of the value of the gift, with a $10,000 annual cap. Any unused amount of the credit can be carried forward three years.
- The new credit for gifts to endowments is available to corporations. It is also available to partnerships, S corporations or limited liability companies, and the credit is passed through to the individual partners, shareholders or members. For individuals who are partners, shareholders or members of multiple businesses, multiple credits may be available. The tax credit is also available to estates or trusts, and is apportioned to the beneficiaries.
- No state income tax deduction is allowed for the gift (no double dipping), and the credit may not exceed the taxpayer’s income tax liability.
- The law expands the tax credit for individual taxpayers who make planned gifts to North Dakota charities. The planned giving credit limits are the same as the business credit: 40% of the value of the gift, with a $10,000 annual cap ($20,000 for a married couple).
Nativity Church of Fargo offers a variety of endowment fund types to meet the needs and desires of donors. New scholarship funds have been developed by businesses and corporations because of this tax credit.
The following is a list of the current endowments that are benefiting Nativity Church of Fargo and its parishioners.
- Jim LaVelle Memorial Fund: Established in 1995, this fund is used to purchase flowers and/or materials for the flower beds around the Nativity campus.
- Maurice Mueller Endowment Fund: Established in 2000, this fund is used for the education of persons involved in liturgy or Social Justice.
- Nativity Parish Social Justice Ministry Fund: Established in 2004, this fund endows a Nativity staff position to promote Catholic Social Justice.
- Nativity Parish Faith Formation Scholarship: Established in 2006, this fund provides financial scholarships to Nativity parish children in need making it possible for them to participate in Nativity Faith Formation, Nativity Youth Ministry and Nativity Sacramental Preparation Programs.
- Nativity Church of Fargo: Established in 2008, this is a general fund providing parish support for Nativity Church.
Why support an endowment?
There are many advantages. Endowments offer a solid base of funds that will be available now and in the future. Since only the interest earned is spent, the fund continues in perpetuity. An endowment allows the donor to honor or memorialize a loved one in the parish community of Nativity. Your gift creates a permanent philanthropic legacy.
How does an endowment work?
The practice of investing principal, rather than spending it, creates a perpetual fund. Most of an endowment’s annual earnings are distributed to the designated benefactors or programs. Endowments provide a “forever giving” funding source for Catholic programs and activities.
Thank you for remembering your parish community in your financial planning.
Click here for a form to donate to one of our endowments (PDF /New Window)
