By Todd Cohen
Gifts of real estate can reap benefits for donors and charities, but also can cause problems if the property is contaminated.
Several charitable foundations have been formed with the goal of addressing environmental problems that can clog the flow of real estate gifts from donors to charities.
The Cherokee Property Foundation in Raleigh, N.C., for example, has been working for nearly a year to identify and assess potential gifts of contaminated land that it will acquire, clean up and sell, using the net proceeds to make grants.
“The challenge for us is to find properties where there is a willing donor and where the value of the property after cleanup is greater than the cost of remediation,” says Lauren Stump, executive director.
After looking at 20 to 25 properties, the foundation has narrowed its search to a handful and expects to acquire at least one by the end of the year.
Donors generally can take a tax deduction equal to the fair market value of the property they donate and, if it has appreciated in value, can avoid the capital gains tax, Stump says.
Donors also can reduce liability for the environmental problem, she said.
Once asbestos and lead paint are removed from a potential donor’s abandoned commercial building in a rural community, for example, the building would be attractive to developers who want to get involved in the community’s downtown revival, Stump says.
“One way we add value is by cleaning up the property so it can be developed,” she says. “Another way is generating dollars we can grant to charitable organizations.
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