We have an opportunity to sell our house for a great deal more than we paid for it. We plan to buy another house but will have $50,000 to $100,000 left in cash. We also have children in college for the next 6 years. We would like to have that money available in 6-10 years so don't want to give it away or tie it up in retirement funds. If we loan that money to a charity interest-free for 5 years, do we need to report it as an asset on the FAFSA or other financial aid forms? Are we required to report it in any way on our taxes? (We don't itemize deductions) Thank you.
Yes, you do. Unless you actually donate it, the loan will be repaid and as such - is an asset for you.
On your taxes you report the interest you got paid for the loan. You can claim the interest as a charitable deduction, if you don't effectively charge any (IRS dictates minimum statutory interests for arm-length loan transactions).