Realtor® Gerald Leonard, owner of Coastal Elite Real Estate, has developed a commission donation program that he hopes his fellow Realtors will embrace.
After 30 years as a highly successful broker/Realtor, Leonard is fortunate to be able to lead the way by directing an extraordinarily generous 50% of his commissions to charity. But Leonard's innovative commission-donation program is just as easily applied to any size donation.
The key to the program is that Leonard offers to reduce his commission with the agreement that his clients will donate that commission-savings to a mutually-agreeable charity, paid out of escrow at closing. Everybody wins:
1. The selected charity wins because it gets a significant donation
2. The client wins because he gets cash back from Uncle Sam by deducting the donation on Schedule A of his federal income tax return
3. The civic-minded Realtor wins because he directs considerable support to a good cause, pays lowers taxes, and earns the gratitude of a client that is now more likely to send referrals
Cash back to the client can be considerable. In Leonard's territory of Southern Orange County, it's quite common for coastal homes to sell for $1 million+. If Leonard represents both the seller and buyer on a million dollar home sale and receives a 5% commission, a reduction of half his commission would generate a donation to charity of approximately $25,000. As a result, the seller could deduct $25,000 from his/her taxable income, generating as much as $8,500 cash back from the IRS and State (assuming a combined tax bracket of 34%).
Most Realtors are not in a position to give away as much of their commission as Gerald Leonard. Even so, charities and clients will still warmly welcome their commission-donation program. For instance, if a Realtor at a large brokerage represents only the seller on a $160,000 transaction, he would typically receive a commission of $2,800. If he can afford to give 5% of his commission, that still generates a gratefully-received donation of approximately $140, which will add-up with each transaction during the course of a year.
Leonard points out that commission-donation programs help Realtors in three ways:
1. Differentiates via Cash Back from the IRS and State government (when applicable): When commission rates are identical, clients save more money by working with an agent that will give them the credit at escrow for a donation to charity (which generates a tax deduction for the client)
2. "Closes" New Clients by Building Trust: During the "beauty contest" when real estate agents try to sell themselves to prospective clients as worthy of trust, they offer similar stories of civic-minded involvement in their communities. But a commission-donation program to a mutually-agreed charity shows who to trust, in actions, not words.
3. Turns Former Clients into Enthusiastic Referrals: Past clients will be happy to tell future prospects, "I sold my home through XYZ, supported a good cause, and got a terrific tax deduction."
Gerald Leonard appreciates the considerable marketing benefits, but at this point in his career, his primary motivation is simply giving back to his community and encouraging other Realtors to do the same.
In Leonard's case, he prefers to direct the donations to Charity Guide, which promotes volunteerism. Leonard supports Charity Guide because he was able to choose from among 200 service projects to fund causes that match both his and his clients interests, including:
– Helping Orphans and Abandoned Children
– Child Abuse Prevention
– Teen Suicide Prevention
– Treating Homeless Men and Women with Dignity
– Preserving Life Stories of the Elderly
The materials for each of these service projects include an acknowledgement to Coastal Elite Real Estate that Leonard can share with his prospective clients as they evaluate Realtors.
Michael Organ, Executive Director of Charity Guide says, "I'm enormously grateful for Jerry's spectacular generosity. But beyond that, I admire Jerry for his vision and commitment to make an even bigger difference by reaching out to Realtors nationally as he spreads the word about the win-win-win benefits of commission-donation programs."
Coastal Elite Real Estate was founded by Gerald Leonard. Based in San Clemente California, Coastal Elite serves clients throughout Southern Orange County, specializing in San Clemente, San Juan Capistrano, Laguna Beach, Monarch Beach, Dana Point, Capistrano Beach, and Laguna Niguel. Coastal Elite Real Estate distinguishes itself through area-expertise, highly attentive service, and working with the client to donate 50% of the real estate commission to charity.
For more information, visit http://www.CharityGuide.org.