The economy's still miserable. No surprise that charities are hurting too. Show clients that with a little ingenuity, they can still give generously. Also, volunteer yourself. You have more financial smarts than the people at most charities—and they need you. "In these difficult economic times, finding fresh and creative ways to make charitable giving viable for a potential donor can literally save a program," says Mary Milgrom, executive vice president of strategic relationships for the National Multiple Sclerosis Society in Denver.

Charities need your knowledge to guide past and prospective donors in how to give now. When times were good, people gave because they felt rich or their accountant said they needed the tax write-offs. Your expertise can help clients see how to continue to give in today's different circumstances.

GIVING IN TOUGH TIMES

Here are some suggestions to get charitable contributions flowing again:

* Defer, don't cancel. If your clients are reluctant to give, recommend they use a "deferred" or "planned" gift. For example, assume a client previously gave $10,000 per year to a charity, but is uncomfortable doing so now. Suggest donating $2,500 per year for four years, and if the client feels more secure in six months, accelerating the payments. Keeping donations at prior-year levels but stretching them out keeps the donor in complete control.

* Give stuff. Suggest that clients donate art or other objects. This can cut insurance costs, generate a tax deduction and maintain support of a charity even while the donor is feeling a financial pinch. The rules get tricky, so clients must work with their CPAs. Contributions over $5,000 generally require both a contemporaneous written acknowledgment and a qualified appraisal.

Further, if the property isn't used for the charity's exempt purpose, the charitable deduction is limited to the donor's tax basis. For example, art donated to an art museum is being used for the museum's exempt purpose. Art donated to a school that has no art collection, sells the art and uses the proceeds is not.

* Don't lose bequests. Assume a client's estate has declined in value, and she's revisiting her will to ensure her children are adequately protected. Her estate was worth $5 million, and her will had divided everything between her four children and favorite charity, 20% to each. Now, given the decline in value of her estate to $3 million, she prefers to leave it all to her children. Instead of cutting the charity out, suggest the lawyer draft in some flexibility. For instance, she could distribute the first $4 million or less equally to her children and the next $1 million to charity. Anything left could be distributed equally among her children and the charity. If asset values recover, her original goals will be met. If not, her children will be protected.

Preserving bequests is vital to charities. Once a bequest is removed, the will may never be revised to add it back. Further, most charities have honor societies for donors who have named the charity in their will. Keeping the donor's name on that list is important to the charity.

* Suggest CGAs. Charitable gift annuities (CGAs) can be part of a plan to achieve financial and charitable goals. Say your client wants to donate $10,000, but is feeling the downturn. CGAs let clients give and receive. They make a donation to a cause and receive regular lifetime payments.

CGAs have received some negative publicity lately, but many of those problems involved a few charities that went bankrupt or had other difficulties. Still, help your clients do their due diligence. The rates paid on gift annuities should match the criteria promulgated by the American Council on Gift Annuities. These provide for annuity rates that result in an average residual gift to the charity of approximately 50% of the amount originally donated.

* Use CRTs. If your client feels too financially insecure to make a large contribution outright, doesn't like the 50% back-end to charity under a CGA and wants more flexibility, consider a charitable remainder trust (CRT) with a twist-the "give-back CRT." Form a CRT so the client receives an annuity each year. The client then can donate each year from that annuity payout.

If economic security returns, the client can terminate (accelerate) the CRT, so the charity receives the then-current value of its remainder interest. If a CRT is terminated early, the non-charitable beneficiary will report capital gains based on the value of the assets distributed to him or her as a taxable exchange under IRS Code Section 1001. The IRS addressed this in several private rulings (see PLR 200314021 and 200733014). Be sure your client consults with tax counsel, because private rulings apply only to the taxpayer to whom they are issued.