How many soybeans would the offering plate hold at your church? How many trips would the usher have to make to fill a bushel basket? Could a grain truck roll down the center aisle? Fortunately, there is no need for a church to build a grain elevator in order to accept such gifts directly off the farm. Farm crops can be a wonderful and cost-effective gift. There are tax-advantages for the farmer and an easy process for the church to turn the products into usable cash proceeds.
For many cash basis farmers, significant tax savings can be achieved by donating crops grown in a previous tax year directly to the church. Typically, the gift actually occurs at the local grain elevator when it is delivered. The church sets up an account at the elevator, and the farmer has the grain put in the name of the church. The church gives the order to sell and the proceeds check is issued and mailed directly to the church. The key is that ownership is transferred and clearly documented in the name of the church before the sale occurs.
The farmer has deducted the cost of production of the gifted grain as a trade or business expense and the income from the sale of the crop is avoided. This can result in greater tax savings than a simple charitable gift of the cash proceeds. Indeed, many farmers do not itemize deductions and, therefore, cannot claim the benefit of a separate charitable deduction.
Here at the Foundation, donors have used this type of gift to make an outright gift, to create an endowment, and even to fund a charitable gift annuity. If you would like to learn more about these gifts visit the Foundation website (www.mumf.org) or call 800- 332-8238.
The old refrain is still true today, “We shall come rejoicing, bringing in the sheaves.” And the ushers can leave their shovels at home!