Five Blind Spots That Can Limit Your Kingdom Generosity

Eric Fleshood: In this episode, we’re revisiting a conversation we recently had with generous families at a Jesus Film Project briefing in Vancouver.

We’ll unpack five common blind spots in charitable planning and work through some of the questions we didn’t have time to answer during that event.

So if you’ve ever wondered how your assets, your estate plan, or even a significant tax year could become part of a more thoughtful generosity strategy, this conversation is for you.

Welcome to the Smarter Generosity podcast. I’m Eric Fleshood, CEO of Cru Foundation, and today I’m joined by our Chief Operating Officer, Katie Brubaker.

Katie, we just got back from an incredible event: the Jesus Film Project donor briefing in beautiful Vancouver.

Katie Brubaker: We did. It was such an amazing event.

Eric: One of the highlights was being able to host an executive luncheon with Brad Gornto.

Brad is part of our legal team here at Cru Foundation. He has a Master of Laws in Taxation and approximately 25 years of experience practicing complex estate planning and tax law.

Having that time with Brad was invaluable for the attendees.

Brad and I unpacked five significant blind spots that frequently hold generous families back from realizing their maximum kingdom impact.

These are things we encounter fairly regularly in our work at Cru Foundation.

We also gave the audience an opportunity to ask questions, and some excellent questions came up.

Today, we’re going to distill those five blind spots and then answer questions from the business leaders and generous families who were in the room.

Katie: That’s right.

We actually ran out of time during the luncheon. We were able to answer four or five questions, but there were several more we couldn’t get to.

I brought those questions home with me, so we’re going to revisit some of the ones we discussed and answer the remaining questions as well.

One thing that stood out to me during the event was that these families have both the spiritual maturity and the financial resources to make a significant kingdom impact.

But sometimes their generosity is limited by conventional approaches to giving, particularly when they’re relying primarily on cash flow.

They may also be receiving advice from professionals whose primary focus is preserving or growing assets rather than exploring how those resources could be deployed for kingdom purposes.

And that seems like a good place to start.

Blind Spot #1: The Advisory Team Paradox

Eric: Absolutely.

The first blind spot is what we’re calling the advisory team paradox.

This happens when someone relies on a generalist without realizing that their particular situation requires a specialist.

Many families have an advisory team surrounding them, and those advisors are often very good at what they do.

But they may not have specialized expertise in advanced charitable giving strategies.

It’s a mistake to automatically assume that a CPA, wealth manager, or commercial real estate attorney is proactively identifying the most effective ways for a generous person to give.

That’s especially true when someone wants to be substantially more generous than conventional financial planning might anticipate.

Brad has worked with many advisory teams over the years. He’s sat around the table with business founders, successful entrepreneurs, and highly compensated executives.

And during our luncheon, he helped us understand what those teams look like when they work well together.

Katie: One thing he pointed out is that advisors can be excellent at their jobs while still approaching the situation through a different set of priorities.

A CPA may be focused on historical tax compliance.

A wealth manager may be primarily focused on growing assets under management.

An estate planning attorney may be concentrating on things like avoiding probate.

Those are all legitimate responsibilities.

But they’re not necessarily the same thing as proactively developing a strategy for deploying capital toward kingdom purposes.

Brad helped us understand that advanced charitable tax planning is a highly specialized discipline.

And that’s why having an experienced charitable gift planner at the table can be so valuable.

Eric: That’s exactly where Cru Foundation can help.

We bring experience in charitable planning and work alongside a family’s existing advisors to explore opportunities they might not otherwise consider.

Blind Spot #2: Waiting Too Long to Plan a Charitable Gift Before Selling an Asset

Katie: That leads right into our second blind spot.

This one is especially relevant for entrepreneurs, real estate developers, and people who own appreciated assets.

Maybe you own a business you’re considering selling.

Or perhaps you have a vacation home, rental property, or land that you’re thinking about giving.

A common mistake is waiting until the sale is already underway, or even until an agreement has been signed, before thinking seriously about charitable giving.

And that timing can have significant tax consequences.

One of the important considerations is the IRS’s assignment-of-income doctrine.

Depending on how far a transaction has progressed, a person may no longer be able to avoid recognizing the gain simply by transferring the asset to charity.

So the opportunity to achieve certain charitable tax benefits can be substantially reduced if planning happens too late.

Eric: That’s right.

The real breakthroughs often happen when a business founder or property owner contacts Cru Foundation well in advance of the anticipated sale.

Ideally, that might be six to twelve months before the transaction.

Katie: So while they’re still contemplating the sale.

Eric: Exactly.

When you’re considering selling a business or another appreciated asset, that’s also the time to begin thinking about the charitable impact you want to have.

Too often, we see people with wonderful intentions who don’t begin that conversation until the optimal planning window has already passed.

With the right structure and timing, donating an appreciated asset before a sale may allow someone to reduce or potentially avoid capital gains tax on the donated portion.

But the details matter tremendously.

And depending on the size of the transaction, the difference between planning early and planning late can represent a substantial amount of money that might otherwise have been available for charitable purposes.

Katie: And that’s not just a theoretical concern.

We’ve seen situations where people realized too late that they could have structured their giving differently.

It’s difficult to discover that resources you hoped to direct toward ministry are now going toward a tax obligation that might have been reduced through earlier planning.

That’s why it’s so important to begin the conversation before anything becomes legally binding.

And I want to clarify something about the six-to-twelve-month recommendation.

That’s not a magic number, right?

Even if someone is only a month away from a potential sale, it’s still worth having the conversation.

The important thing is to start before the transaction has progressed too far.

Eric: Exactly.

In fact, I was recently talking with a successful entrepreneur who has sold several businesses.

He’s preparing to speak to other business owners, and his message is that they need to plan with the end in mind.

Even if a business sale is several years away, it’s worth asking now, “What do I want to have in place when that day comes?”

That way, when the opportunity to sell arrives, charitable planning is already part of the overall strategy.

Blind Spot #3: Overlooking the Tax Consequences of Inherited Retirement Accounts

Katie: All right. Blind spot number three involves retirement accounts and the tax consequences of passing those accounts to the next generation.

Eric: Yes. Specifically, we’re talking about traditional IRAs and 401(k)s.

Since the SECURE Act changed the rules around inherited retirement accounts, many adult children who inherit these accounts are generally required to distribute the funds within ten years.

And that can create a significant tax challenge.

Often, those distributions happen during the beneficiary’s peak earning years.

So now, in addition to their regular income, they’re receiving taxable distributions from an inherited retirement account.

Depending on their circumstances, that additional income may push them into higher federal or state tax brackets.

Many families recognize that their estates may not be large enough to owe federal estate tax.

But they may not realize that inherited retirement accounts can still create substantial income tax obligations for their beneficiaries.

Katie: What did you and Brad suggest as possible solutions?

Eric: There are several strategies worth considering.

One possibility involves naming a properly structured charitable trust as the beneficiary of a retirement account.

Certain charitable trust arrangements can receive retirement assets without immediate income taxation at the trust level.

The trust can then provide income to designated beneficiaries over a period of time.

For example, some arrangements may allow payments to continue for as long as twenty years, depending on the trust’s structure and the applicable requirements.

There’s also a charitable component built into the trust.

That can create opportunities to support both family members and charitable causes.

Katie: Let me make sure I’m understanding.

Let’s say those retirement assets go into the charitable trust, and the children receive payments over twenty years.

Are those payments tax-free to the heirs?

Eric: No, and that’s an important distinction.

The retirement assets may enter the qualifying charitable trust without triggering an immediate income tax at that point.

But when taxable income is distributed from the trust to the beneficiaries, those distributions are generally subject to income tax.

The advantage is the potential ability to spread those payments over a longer period.

Instead of forcing a large amount of income into a relatively short time frame, the trust may allow the distributions to be managed more gradually.

That can help families better manage the timing of their tax obligations.

Katie: So it’s not that the heirs never pay income tax.

The potential benefit is having more control over when the taxable income is received.

Eric: Exactly.

And there are other ways families can approach this challenge.

One strategy we often discuss is using retirement accounts for charitable gifts while leaving other kinds of assets to family members.

Qualified charities generally don’t pay income tax on retirement account assets they receive as beneficiaries.

Meanwhile, other assets in an estate may receive a step-up in cost basis or offer different tax advantages when inherited by family members.

So it may make sense to ask whether you’re using the most appropriate assets for each purpose.

I would encourage families to sit down with their advisors and ask two simple questions:

“Am I using the best assets for gifts to my family?”

And, “Am I using the best assets for gifts to ministry?”

Those questions can lead to some very meaningful planning conversations.

Blind Spot #4: Feeling Trapped by a Sudden, Significant Tax Year

Katie: The fourth blind spot is feeling trapped when you suddenly face an unusually large tax bill.

Let’s say a family normally gives $50,000 a year to ministry.

But this year, they sell a property and realize a significant amount of taxable income.

Now they’re looking at a substantial tax bill.

They may assume they have only two choices: pay the taxes or give away a large amount of capital that they might need later in life.

Eric: That’s right.

And this is an area where Brad Gornto has done significant work.

One strategy involves a specially structured charitable lead trust.

A family may be able to fund the trust with cash or other appropriate assets.

The trust then makes regular payments to charity over a specified period, perhaps ten years.

Depending on the structure, those distributions might support a ministry directly or an eligible donor-advised fund.

Certain trust arrangements may also provide the donor with an upfront charitable income tax deduction.

So instead of making those charitable gifts year after year without advance planning, a donor may be able to recognize the deductible value of the charitable interest in the year the trust is funded.

That can be particularly meaningful during a year when taxable income is unusually high.

Katie: So it’s almost like front-loading the tax benefit of future charitable giving into the current year.

Eric: That’s one way to think about it.

For someone who’s already committed to giving regularly over the coming years, a strategy like this may create an opportunity to align those future charitable commitments with an unusually high-income year.

And there’s another important aspect.

We often assume that to receive a substantial charitable tax deduction, we must permanently give away the entire asset.

But certain charitable lead trust structures work differently.

They can allow an asset to be committed to making charitable payments for a period of time while providing for the remaining assets to return to the donor at the end of the term.

Katie: Let me see if I can summarize that.

Someone might take a lump sum of cash or another appropriate asset and place it into the trust.

The trust makes charitable payments over a number of years.

Depending on how it’s structured, the donor may receive an upfront charitable deduction when the trust is established.

And then, after the charitable payment period ends, the remaining assets revert to the donor.

Is that correct?

Eric: Yes, in the type of arrangement we’re discussing.

The asset is used to produce charitable distributions for a specified period, and then the remaining assets can return to the donor according to the trust terms.

Katie: We had several couples at the luncheon who were very interested in learning more about that.

Eric: I was amazed at how many different situations it could potentially apply to.

For example, we talked with people who were considering converting traditional IRAs to Roth IRAs.

A Roth conversion can create a significant increase in taxable income in the year of conversion.

For a charitably minded person, a properly structured charitable planning strategy may help manage some of those tax consequences.

But there’s an important clarification about the kind of trust we’re discussing.

A reversionary charitable lead annuity trust can be structured as a grantor trust.

In that arrangement, the donor may receive an upfront charitable deduction, but the donor is also generally responsible for income taxes on the trust’s earnings during the term.

Those earnings are reported on the grantor’s tax return.

So the upfront deduction doesn’t mean the trust produces no additional tax obligations.

Even with those ongoing income taxes, though, the arrangement may still provide a more manageable result for someone facing an unusually large tax bill.

That’s why the details of the trust and the donor’s overall financial picture are so important.

Blind Spot #5: Assuming Advanced Charitable Planning Is Too Expensive

Katie: Blind spot number five is one we may not have even reached during the luncheon because we spent so much time on the audience questions.

Eric: This one involves the assumption that advanced charitable planning is going to be expensive.

We’ve talked about trusts, tax strategies, business sales, and several different technical planning concepts.

And I think some people hear all those terms and immediately start wondering how much the process is going to cost.

They imagine bringing Cru Foundation into the conversation, along with their attorneys, accountants, and financial advisors.

And they can almost hear the billable hours adding up.

That concern can keep people from taking the next step.

But I want to make something very clear.

Cru Foundation is a ministry, and we provide our charitable planning services on a complimentary basis.

You’re not going to receive a bill from Cru Foundation for our time.

And one of the things Brad pointed out during our luncheon was that our process can actually make the work of an estate planning attorney more efficient.

We help families think through their goals, understand their options, and prepare for the legal planning process.

That means their attorney can often spend less time helping them sort through foundational questions and more time doing the specialized legal work they’re trained to do.

So there can be meaningful efficiencies when everyone is working together.

Katie: That’s a great summary of what we love to do.

We get to come alongside ministry partners, listen to their hearts for generosity, help them understand their options, and prepare them to work effectively with their professional advisors.

You’ve heard me say this before, but I really think it’s the best job in the world.

Now, Eric, I have our audience questions here.

Are you ready to go through them?

Eric: All of a sudden, I feel like I’m sitting in the dunk tank at the county fair.

Katie: Are your palms sweating?

Eric: A little bit!

Katie: These are questions we received from people at the luncheon.

We addressed a few during the event, but there were others we didn’t have time to answer.

Some of them cover different topics, so we may need to explain a few terms as we go.

Let’s get started.

Audience Questions About Charitable Giving

Is there a minimum recommended amount for a donor-advised fund?

Katie: Our first question is, “Is there a minimum recommended amount for a donor-advised fund?”

Maybe we should start by explaining what a donor-advised fund is.

Eric: A donor-advised fund is a dedicated charitable giving account held at a sponsoring charitable organization, such as Cru Foundation.

A donor can contribute eligible assets to that account, potentially receive a charitable income tax deduction at the time of the contribution, and then recommend grants to eligible charities over time.

Those grants might support their church, favorite ministries, or other qualifying organizations.

So it functions as a central place for someone to organize and manage their charitable giving.

Katie: Now, the question asks about a minimum recommended amount.

That could mean how much someone needs to contribute to open a donor-advised fund.

Or it could mean whether there’s a minimum balance that has to remain in the account.

Can you address both?

Eric: I can speak specifically to how our program works at Cru Foundation.

There’s no cost to open a donor-advised fund with us.

However, the initial contribution needs to be at least $5,000.

After that first contribution, we don’t require donors to maintain a minimum balance in the account.

Other donor-advised fund sponsors may have different requirements, including different contribution minimums or account balance requirements.

So those are things you’d want to verify with the particular sponsoring organization.

What is a qualified charitable distribution?

Katie: Question number two: “Please explain what a QCD is.”

Eric: QCD stands for qualified charitable distribution.

It’s a particularly attractive giving option for people who are age 70½ or older.

A QCD allows an eligible individual to make a direct charitable distribution from an eligible IRA to a qualifying charitable organization.

Instead of first withdrawing the money into a personal account, the distribution goes directly from the IRA custodian to the charity.

The significant tax benefit is that an eligible QCD is generally excluded from the donor’s taxable income.

It can also count toward satisfying any required minimum distribution, or RMD, for that year.

So for someone who’s already required to take distributions from their IRA, this can be a very effective way to support charitable causes.

Katie: And for 2026, there’s an annual limit, correct?

I believe it’s $111,000.

Eric: That’s correct.

For 2026, the annual QCD limit is $111,000 per eligible individual.

That means a married couple could potentially make a combined total of $222,000 in QCDs if both spouses meet the eligibility requirements and have eligible IRAs.

Can I send a QCD to my donor-advised fund?

Katie: Our third question is, “Can I send a QCD to my donor-advised fund?”

Eric: No.

Under current federal tax rules, a standard QCD cannot be contributed to a donor-advised fund.

There has been interest in Congress in changing that restriction, and we’re certainly paying attention to those discussions at Cru Foundation.

If the rules change in the future, that could create additional opportunities for charitable giving.

But under the current rules, QCDs cannot be directed into donor-advised funds.

Should my IRA beneficiary be Cru Foundation or my donor-advised fund?

Katie: Let’s stay with retirement accounts.

Here’s another question: “Does the beneficiary of your IRA need to be Cru Foundation, or can it be in the name of the donor-advised fund?”

This sounds like someone who wants their IRA to support charity after they pass away and already has a donor-advised fund.

How would they arrange that?

Eric: When someone wants to name Cru Foundation as a beneficiary of their IRA, we generally encourage them to identify Cru Foundation as the legal beneficiary.

Cru Foundation is the charitable legal entity with its own tax identification number and official address.

Those are the details that belong on the IRA beneficiary designation form.

Now, someone may also want those assets to support charitable giving through their donor-advised fund after their death.

We have an internal form that allows donors to leave instructions about how they would like us to handle those charitable proceeds when they arrive.

That gives us a way to document their intentions in advance.

Katie: So the retirement account identifies Cru Foundation as the legal beneficiary, and the donor can complete separate instructions with Cru Foundation about their intended charitable purposes.

Eric: Exactly.

Can my trust be the beneficiary of my IRA if it directs the funds to charity?

Katie: Here’s another question.

“Is it okay if the beneficiary of the IRA is our trust, and the trust documents state that all IRA funds are going to be given to charity?”

Eric: That question depends heavily on the specific facts and circumstances.

It involves both the individual’s financial situation and the structure of their estate plan.

I’d strongly encourage someone considering that arrangement to discuss it with their estate planning attorney.

That’s where having professional advice tailored to your situation becomes especially important.

I wouldn’t want to give a definitive answer without reviewing the relevant documents and understanding the complete circumstances.

Katie: Right. Every situation is unique, and this is one where the details really matter.

Can I name my donor-advised fund as the beneficiary of an IRA or 401(k)?

Katie: Our next question is related.

“Can you designate your donor-advised fund as the beneficiary of your IRA or 401(k) without creating a taxable event?”

Eric: Generally speaking, retirement assets left directly to an eligible charitable organization can pass to that charity without creating the same income tax liability that an individual beneficiary might face.

That can also have estate tax planning benefits, depending on the donor’s circumstances.

The important distinction is that a donor-advised fund is an account maintained by its charitable sponsor, rather than a separate legal entity.

So the beneficiary designation needs to be structured correctly.

At Cru Foundation, that generally means naming Cru Foundation as the charitable beneficiary and documenting how the donor would like the proceeds to be used.

We can work with the donor and their advisors to help make sure those intentions are properly communicated.

Is it too late to consider a charitable gift annuity in your 70s?

Katie: Here’s our next question.

“We’re in our 70s. Is it too late to consider a charitable gift annuity, or would a pooled income fund be a better fit for us?”

I think we should start by explaining the difference between those two giving vehicles.

Eric: Absolutely.

A charitable gift annuity, or CGA, is a charitable gift made in exchange for lifetime payments.

It’s a contractual arrangement between a donor and a charitable organization.

The donor makes an irrevocable gift, and the charity agrees to provide fixed payments for the lifetime of one or two designated annuitants.

Once those lifetime payment obligations end, the remaining charitable resources are available to support the organization’s mission.

A pooled income fund is different.

It’s a type of charitable trust maintained by a nonprofit organization.

At Cru Foundation, we have a pooled income fund that receives irrevocable charitable contributions from multiple donors.

Those contributions are combined into a shared investment pool.

The donors or other designated beneficiaries can then receive income distributions from that fund during their lifetimes.

But unlike a charitable gift annuity, the payments from a pooled income fund aren’t fixed in advance.

They depend on the income generated by the fund’s investments and the donor’s proportional interest in the pooled fund.

So the key distinction is that the charitable gift annuity provides a fixed contractual payment, while the pooled income fund’s distributions vary based on its income performance.

Katie: That makes sense.

Now, what about the age question?

If someone is already in their 70s, is it too late to consider a charitable gift annuity?

Eric: Not at all.

In fact, people in their 70s are among those who frequently consider charitable gift annuities.

Katie: I’d even say the 70s can be on the younger side for some charitable gift annuity arrangements.

Eric: That’s right.

Age alone certainly wouldn’t disqualify someone from considering a CGA.

But there may be other reasons why a charitable gift annuity isn’t the best fit.

For some people, a pooled income fund may offer advantages.

For example, depending on the circumstances, a pooled income fund may provide a larger upfront charitable income tax deduction than a comparable charitable gift annuity.

That’s why we approach these decisions individually.

At Cru Foundation, we can prepare illustrations and side-by-side comparisons showing how different arrangements might work.

Then the donor can review those options with their professional advisors and consider which approach best supports their goals.

Bringing Generosity Into the Planning Conversation

Katie: Eric, thank you for working through all those questions with me.

I’m grateful we had the opportunity to revisit our conversation from Vancouver, summarize the five blind spots, and answer the questions we didn’t have time to address during the luncheon.

One of the themes running through this entire conversation is that generosity is worth planning for.

I think advanced planning is part of the principle of giving our firstfruits.

Whether you’re thinking about selling a business, contributing appreciated assets, planning for retirement, developing an estate plan, or simply considering how to steward what God has entrusted to you, some of the most meaningful opportunities begin long before a transaction takes place.

And you don’t have to figure out those decisions alone.

At Cru Foundation, we love coming alongside generous families and their advisors to explore what’s possible and help turn a heart for generosity into a thoughtful plan.

If something in today’s conversation raised a question about your own circumstances, we’d welcome the opportunity to talk with you.

Thanks for joining us, and we’ll see you next time.

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This transcript has been edited for clarity and readability. Verbal fillers, repetitions, and production-related interruptions have been removed.

The Smarter Generosity podcast is provided for spiritual edification and educational purposes only. It is not intended to be legal or tax advice. Please consult your professional advisors regarding your specific circumstances.