This episode of the Faith and Finance podcast is brought to you in part by the National Christian Foundation. Do you want to simplify your year in giving and align your giving with your values? A giving fund at the National Christian Foundation can help. For more than four decades, thousands of generous Christians have used their giving fund, also known as a donor advised fund, to help mobilize more than twenty-five billion dollars for more than one hundred thousand churches and charities. With a giving fund, you can contribute cash or appreciated assets like stock, real estate, or an interest in your business.
Then you can take your time to pray and decide where to give. Open a giving fund online in just minutes and start giving with purpose. To learn more or open a fund, visit faithfi. dot com slash ncf. That's faithfi.
dot com slash ncf. Now on to the podcast. Generosity often begins with good intentions, but how do we turn those intentions into action? Hi, I'm Rob West. Many Christians genuinely want to give, but generosity doesn't always happen as intentionally as we'd like.
Today, Kendra Vandermuelen joins us to explore how a thoughtful giving strategy can help us make the most of what God has entrusted to us, and then. It's on to your calls at eight hundred five two five seven thousand. This is Faith and Finance: Biblical Wisdom for Your Financial Decisions. Kendra Vander Mullen is the CEO of the National Christian Foundation, or NCF, the nation's largest Christian donor-advised fund provider, and an underwriter of this program for more than four decades. NCF has helped Christians put their generosity into action through its giving fund.
Thousands of believers have helped direct more than twenty-five billion dollars to over one hundred. Thousand churches and charities, Kendra. What a treat to have you on the program! Thanks, Rob. It is so great to be here.
Well, we've been looking forward to it. Let's start, Kendra, with the gap between intention and action. Many Christians genuinely want to be generous, but following through isn't always easy.
So, maybe you could just share what you think keeps people from turning that desire into real action. Yeah, giving can be overwhelming. There are so many choices, so many different things to consider in terms of what to give, how to give, when to give, where to give, and without a strategy, competing needs and giving requests can become overwhelming. Yeah. Our giving just becomes reactive at that moment, and we don't know how to say yes and no, and do that with grace, which is what we really want to be able to do.
So, having a giving strategy, a plan that has all the right facets to it, can help us step back and be more purposeful in where and how we give and when. Yeah, I think that's well said, and I want to dig into the specifics on what that can actually look like.
So, if we want to move away from just being reactive givers to having more intentionality, what does it look like to develop a more intentional plan for our generosity? It all starts with a biblical foundation. Starts by exploring what Scripture teaches about money and about stewarding God's resources and about giving in particular. Proverbs says in three nine, honor the Lord with your wealth and with the first fruits of all that you produce.
So we need to clarify what our calling is to give. The causes, the needs that bring us joy, that break our hearts, or compel us to get involved, we need to think about the resources that God's placed in our hands, how He might use those, and what expectations He has for us as managers of His resources. And we don't have to do the whole strategy all at one time. We don't need to be paralyzed by the desire for perfection, because perfection's never going to come in this matter. But we can take one faithful step at a time to get better and better at it.
Yeah, I love that idea of thinking about what breaks our heart and the causes and needs that bring us joy to be a part of solving and participating in. As you said, that challenge our heart. I think that's a great place to begin. And this idea of having a strategy underneath all of that, I think, is so essential.
Now, NCF, of course, encourages people to think beyond cash, which is how we do most of our giving, but it's not where our real Wealth exists.
So, before the break, here, what are just some of those assets people might overlook that could open the door to even greater giving? Yeah, ninety percent of our giving comes from our checkbooks, but ninety percent of what God's entrusted to us is not in our checkbooks. And where is it?
Well, it can be found in all kinds of assets that are on our balance sheet, rather than cash. Those assets include stocks and bonds, but they also include parts of our family business or the real estate portfolios that we've developed over the course of our career. Real estate, private investments. Retirement assets, other non-cash assets. These all have incredible strategies when used well to provide opportunities for generosity.
Yeah, well, we're going to continue to unpack those after the break, and we'll talk about the importance of giving before selling, and how there are real tax benefits there. We're also going to dig into the donor advised fund, which you might think about as a charitable checking account. What NCF calls a giving fund, and how that's become a really popular tool for charitable giving. We're joined today by Kendra Vander Mullen, CEO of NCF, and more on giving. Intentionally, after this break, stick around.
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Movement Mortgage LLC supports equal housing opportunity. NMLS number three nine one seven nine. For licensing information, visit. mlsconsumeraccess.org. We're talking about turning good intentions into generosity.
I'm joined today by my friend Kendra Vandermuelen. Kendra is CEO of the National Christian Foundation, or NCF, the nation's largest Christian donor advised fund provider. We share a founder at Kingdom Advisors and NCF, in Ron Blue, among others, Larry Burkett and Terry Parker. And NCF is an incredible partner. Serving so many givers and Kendra, it's just amazing to see the sheer volume of dollars flowing through NCF into Incredible Ministries.
And perhaps that's something that's misunderstood: is that NCF is not there to decide where the money goes. It's really to just help facilitate the giving, right? Yeah, it's such a privilege to help so many givers be wise stewards of what God's entrusted to them, and the fruit that flows out of that is just such a blessing. And it is true that we are a conduit; we exist to help them facilitate the resources that they have. Towards the gifts that they want to make, we do not make any grants to any charities out of anybody's fund.
We only make grants when they recommend one, and we're able to make that grant at their request. Yeah, you can learn more, folks, at faithfi dot com slash ncf. Their work in complex gifts, asset based giving, and certainly donor advised funds. What they Call a giving fund is second to none. Again, faithfi dot com slash ncf is the place to go.
Now, Kendra, before the break, we were talking about non cash giving, and you made a staggering statement that I think a lot of people miss: that ninety percent of our giving is done in the form of cash, and yet only ten percent of our wealth, on average, is held in the form of cash. Which means our greatest opportunity for giving isn't in our Savings and checking accounts. It's over there on our balance sheet. It's the assets that we have, the investments and the businesses and the real estate. I want to talk about why it's important to think about generosity before a major financial event like selling a business or real estate or other appreciated assets.
Yes, timing can be really critical. If you're considering a sale, charitable planning before that transaction will help us help you decide what can ultimately go to charity and what has to go to taxes. Giving ahead of the sale can help you increase the amount that's available for charitable giving at the expense of your taxes. But that has to be done in a legal and thoughtful way in order to accomplish your goals.
So to Depending on your circumstances, you can have very favorable tax treatment, but every situation is different, and so we need to look at those things early and often. We need to involve your tax team, your financial advisors, and we need to do a fair amount of planning in order to make these things happen. The sooner we start, the better. Yeah, I'd love for you to unpack that a bit more. You mentioned the importance of having advisors.
You mentioned the importance of NCF being there to work alongside you. Anything else that someone needs to know about who they should involve early in the planning process before making a major sale?
Well, it really depends on what it is they're going to be selling.
So, if they're selling the family business and this is the primary asset of an extended family, then your family needs to be involved in that conversation. It's usually part of a larger plan to both transition the business and make sure that it lands well for the sake of all the customers and the employees and all of the different stakeholders of the business, but also.
So that the assets land well for the family and what the family's larger goals are.
So often, if you have already given a lot of thought to that and involved your family, your extended family in those conversations, such that together you have a vision for where you would like to see the impact from the assets that God's entrusted to you, then together you can come up with a plan of how much to give, how much to save. And where to send it, and over what time horizon? Yeah, that's well said, Kendra. Of course, we're here in late October. The end of the year is coming.
Is there still time for some of these asset-based gifts to occur at this point? There is still time, so it is possible, depending on what kind of asset you have, to make these decisions into December. But there are some assets, real estate in particular, being one of them, where the later it gets, the harder it gets. And so we have a set of actual deadlines for when we need to know, at least know about a particular gift, depending on the type of gift, and those deadlines are. Available on our website.
Great. Again, faithfi dot com slash ncf is the place to go.
All right, Kendra, I want to talk about the donor advised fund. This has, of course, become a really popular tool for charitable giving. How can they help people become more intentional and even strategic with their generosity? Yeah, one of the real big benefits of a donor advised fund is it allows you to make a gift and get the taxes all straightened out on that gift.
So get your deduction and understand where it's going to land with regard to a tax outcome, and then take some time to decide where you want to give.
So it separates the tax planning from the gift planning, if you want to call it that. Planning of the giving, and that is so helpful to people because in situations like this where we're dealing with what we call complex assets, we call them complex for a reason. They're not easy, and so we want to make sure we can concentrate all of our efforts on the front end on all that great planning to make sure that business lands well, as I mentioned earlier, and all of the taxes are paid. And all of the things that they wanted to accomplish on the front end are handled, and then they can get into the question of when and where and how to make the actual grants. Again, folks, NCF calls the donor advised fund a giving fund.
You can open one in just a few minutes at faithfi. dot com slash ncf. And I think it's one of the most powerful giving tools available. And Kendra mentioned a few of those benefits. Another benefit.
But it's just this idea that you can, you know, make the gift to many ministries out of the donor advised fund once it's funded, and you only get one tax statement. You're not keeping up with all of those contribution receipts, which is just so helpful, Kendra. When it comes to the donor advised fund, because often it's being funded maybe with the sale of an asset and funded at a significant level, oftentimes folks are not ready to deploy those resources right away. Way they can actually invest the money in a faith-aligned way, right? In the giving fund, right?
That is correct. We tend to think of this as the grow part of the value proposition.
So, donor advice funds talk about three steps or three. Values that a donor advised fund can bring, give, which is what we've talked about in terms of the planning on the front end, grow, which is what you just mentioned, where I am investing these assets in a faith driven way. In our case, in order to grow them over time, and then grant, which is where I'm deciding exactly which charities are going to receive how much and when. The investment options that we provide are run the gamut from cash investment options that provide interest rate returns to stock or bond or fixed income or equity types of investments, all the way to alternative investments.
So there's a lot you can do with your giving fund once you've funded it. Incredible.
Well, Kendra, we've covered a lot of ground here today.
So thankful for our partnership with NCF and for your time today. You are so welcome. Thanks for having me. That's Kendra Vandermuelen, CEO of the National Christian Foundation. If you want to learn more, a quick way to get to their website is just to go to faithfi dot com slash ncf.
That's faithfi dot com slash ncf. We'll be right back. We are grateful for support from Timothy Plan. Since 1994, Timothy Plan has shared good news with investors and advisors by offering faith honoring mutual funds and exchange traded funds. More information is at timothyplan.
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Learn how at faithfi. dot com forward slash ncf. Great to have you with us today on Faith and Finance. We're taking your questions today. The number eight hundred five two five seven thousand.
That's eight hundred five two five seven thousand. We'd love to hear from you today. Mary is in Georgia. Mary, how can I help? Hi, thanks for taking my call, Rob.
Sure. I retired this year at sixty-five, and the plan is to sell my house, move closer to my family, but it's a larger city, and the profit from the sale of this house won't cover the same quality house there.
So I would need probably a hundred thousand dollars, and I was thinking about a mortgage, and then it occurred to me why not take the money out of the rollover IRA.
So they don't have a mortgage. I mean, I would pay taxes on it, but I wouldn't have a seven percent interest rate on a mortgage. Yeah, yeah. What is your age, if you don't mind me asking, Mary? It's sixty five.
Sixty five.
Okay. And what are your income sources going to be? I have Social Security. I have the rollover IRA, which has the majority of the money. I have a smaller Roth.
And then some cash account.
Okay, what do you have in IRA assets? Um, I would say about one point two.
Okay, and are you pulling anything out of that monthly to supplement Social Security? Not yet, but I, you know, sometime before the end of the year, I probably. We'll have to.
Okay, and do you think that's the pattern that will continue? That you'll just have to pull, you know, once or twice a year, just to help with some extras. Or moving forward after this year, do you see yourself having to pull a monthly income stream, if you will, from investments to to just break even? It would probably be pulling every month to okay to do it. Yeah, and what do you think you're going to need to pull each month?
Probably, I would think about. Fifteen hundred, maybe.
Okay, yeah. Maybe two thousand. Yeah, so you're in pretty good shape because if you had one point one, and you know, I think you could pull as much as four and a half or five percent. But let's just use four percent a year. I mean, that would be forty four thousand a year, and you know, that's thirty six hundred a month.
Doesn't sound like you're going to need anywhere near that. Perhaps less than half of that.
So you're in good shape, and I would agree with you being in a position where you don't have. To add a mortgage, which would be your largest expense, probably would be really nice, and especially with interest rates where they are now, to be able to get equivalent to a guaranteed, let's call it seven percent, on a new first mortgage, that's not a bad guaranteed rate of return. You really can't find that anywhere else.
So I'm on board with this, especially because you'd have you know plenty left to be able to fund. Your lifestyle, you know, by pulling maybe two percent a year, which means this account would continue to grow into the future.
So, I think the only consideration would be, you know, over how many tax years do you withdraw this? And I'd probably work with your CPA on that. But you're probably at a minimum going to want to spread it over two tax years.
So, maybe you think about taking fifty thousand this year, fifty thousand next year, or. Fifty next year, fifty the following, depending on the timing of the move. That's just going to spread it out and ensure that you know you don't get hit with a big Medicare premium increase based on Irma, and or make more of your Social Security taxable because you've driven up your modified adjusted gross income. Does that make sense?
So many good points that I hadn't thought about. That's why I called you. I knew there were things I weren't thinking about. Yeah. So I think overall, I'm on board with it.
Do you normally prepare your own return, or do you have somebody do that for you? I had somebody the past couple of years do it.
Okay, yeah. So I would plan to do that again, and just engage that person maybe a little early, maybe even before the end of the year, and before they get too busy with year end, you know, the crunch that comes, and just say, "Hey, here's what I'm thinking. Can you help me think about the timing of this, and just run some, you know, tax planning scenarios so that I can make a really good decision about the timing of of when I'm going to take this money." Out.
Okay, so probably not a lump sum of a hundred thousand because then it increases your social security and your Medicare.
Okay, that's right. Yeah, so we're just going to want to spread it over two tax years, maybe three. Just depends on the timing of the move and if you're trying to avoid taking out that mortgage. Because remember, just the mortgage itself, in terms of expenses, not any interest, could run you three to five percent of the mortgage balance.
So that's three to five thousand dollars. Dollars just for the cost of the mortgage. If we can avoid that, let's do it.
So then it's just a matter of okay, how do we spread out this withdrawal to spread it over two tax years? It's probably going to have to be this year and next, unless you can delay the the move into the following year. Hey, thanks for your call today, Mary. God bless you. Stay in the line.
We're going to send you a copy of our current edition of Faithful Steward as a thanks for calling today. Let's go to Tampa. Hi, Greg. Go ahead. Hi Rob, love your show.
Thank you. Moving money from an IRA to a Roth IRA. I'm sixty four. I plan on retiring at sixty five. I also have a company four hundred one k at about four hundred thousand.
The IRA is about two seventy five. It's just me working, making about sixty.
So I'm putting away about fifteen with the catch up contributions and the twenty five percent I can put in through my company.
So my question is: Would I just go on TurboTax and start figuring out how much money I should move over? And does it matter if I move it over from the IRA or from my company 401? Yeah, yeah, great question.
So, in terms of you thinking about Roth conversions, which is what this would be, you are entering a particularly useful window, and so you'd want to look at the opportunity probably after you retire. Which did I hear you say that's a year away? Yeah, sir.
Okay. Yeah. So I would say, you know, this year while you're still working, your income probably puts you in a higher bracket than you will be after you stop working.
So this is probably not the year to do the conversion.
So I would say continue to contribute to that 401k or a traditional IRA where you're going to get the the benefit of the deduction that will be really valuable for you while you're still working. And then once you Retire next year. Your taxable income is going to drop substantially. That creates then the opportunity to convert larger amounts annually at relatively lower marginal tax rates before other retirement income and eventually required distributions kick in.
So a common strategy is one called fill the tax bracket.
So for example, in twenty twenty six, the twenty two Percent federal bracket begins above fifty thousand four hundred of taxable income, or a hundred thousand eight hundred for for married filing jointly.
So you'd want to try to to fill up that bracket before you go into the next one, and that would allow you to move significant sums over. You'd also want to try to do that after your income declines through retirement, but before you start Social Security. That's really the optimal time for you to start moving that money over. It does have to happen through conversion, and you probably will want to work with your CPA or TurboTax to figure out the sweet spot. Hang on the line; we'll talk a bit more.
Big thanks to my team today, Josh, Tahira, Taylor, and Omar. We'll see you tomorrow. Faith in finance is provided by Faith by and listeners like you.
