BY STEVE DINNEN
A northwest Iowa farm will bring the gift of clean water and housing to Haiti under a novel program meant to convert agricultural property into a charitable gifting tool.
Keep Iowa Growing, as the program is called, allows farm owners to donate their property to the Community Foundation of Greater Des Moines and then receive qualifying tax benefits. The foundation will keep title to the property and rent it out, distributing the annual rent income in one of two ways: pay it to the donor owner as long as he or she lives, or allow the donor to designate which charitable organization should get those proceeds.
Jeanine and Bob Vaughn chose the second option. The Urbandale couple has long volunteered in Haiti with a Pella-based charity, Many Hands for Haiti, and Bob said he likely will direct funds to it to help its works.
Bob grew up in tiny Anthon, Iowa, surrounded by farmland. After college he ended up in Des Moines, working as a pharmacist. He did not use his extra money to invest in the stock market. He bought farmland—160 acres here, 225 acres there, whatever he could find at the right price. He did not physically farm the land, but rented it out to area farmers.
The Vaughns are now retired and working through their estate planning. They have two adult children who don’t intend to farm, so the question had arisen as to what to do with those farms. They could sell them, certainly, and pay capital gains taxes on property that has appreciated nicely over the past half century.
Or, they could give the land away. That’s when Kristi Knous, president of the Community Foundation, entered the picture. A farm kid herself, Knous earlier had heard of a similar farmland gifting program in Minnesota. That version entailed an eventual sale of gifted property. The Foundation’s twist is that whatever is gifted to the program remains with it forever.
“It’s a tool to keep land owned in Iowa,” Knous said. The program looks for nearby farmers to rent it out, and the donor can even suggest a tenant farmer.
Rental income can go to the donor as a retained life interest. They collect it (and a tax deduction for their gift) during their lifetime, and designate who should receive the income once they are gone. Outright gifts like the Vaughns’ produce the same level of income that the donor can assign to a particular recipient. They can change the recipient as they wish.
“It’s about the best thing that will happen,” Bob Vaughn said of the solution for their estate planning.
The Foundation would like to hear from farm owners, at 515-883-2626 or www.desmoinesfoundation.org.
BY STEVE DINNEN