Even the kitchen sink: Donations of houses on rise

CLEVELAND (AP) - When he wanted to sell his 50 percent share of a family vacation home in upstate New York, the Rev. Dan Schoonmaker learned he would lose half the proceeds to taxes.
Instead, the suburban Shaker Heights resident donated his share to the Cleveland Foundation, which sold it tax-free to his cousins as he intended -- and uses the proceeds to help support health charities and the Episcopal Church as Schoonmaker wishes.
More often, donations to public foundations nationwide are in the form of real estate, including homes, apartment buildings and even shopping centers.
The trend is growing, although there are no precise numbers to track such donations, said Carla Dearing, president of Louisville, Ky.-based Community Foundations of America.
The foundations benefit because real estate values are rising even as stocks and the rest of the economy have declined, she said.
Donors benefit because a gift to a public charity brings a bigger tax deduction than one to a private nonprofit.
The Cleveland Foundation received $1 million in real estate
donations over the past two years, and is talking with two more donors who want to give property worth a combined $500,000.
The foundations usually sell the property and use the interest from the invested proceeds to support causes as directed by the donor or at the foundation's discretion.
Some community foundations even suggest real estate as an option to prospective donors. The Peninsula Community Foundation near San Francisco has attracted $3.2 million in real estate donations in three months using that method.
The Greater Kansas City Community Foundation received so many real estate donations that it created a separate foundation to handle them.
Jean and Betty Fairfax grew up from Cleveland and said they want the reputation of the public schools restored to the level in the mid-1930s when they graduated. So they donated their rental house in Phoenix to the Cleveland Foundation and designated the proceeds to benefit Cleveland schools.
"Education is highly valued in our family," Jean Fairfax said.
(Copyright 2003 by The Associated Press. All Rights Reserved.)