Giving Options
Charitable giving does not require great wealth. It requires generosity
of spirit - the desire to share what you have for the benefit of others.
Many have a desire to help others in a meaningful way. The challenge
is how to best realize these desires.
With staff and donors working together, the Foundation has designed
smarter ways to give, simpler processes for giving and a broader range
of gift options. From this broad range of options, you can select what
best suits your personal giving objectives. Gifts can be made in many
forms and in any size, and can be customized to fit your personal circumstances.
Assets you can give
Most people have a sense of what they
can give. But each gift option has different benefits, and it's important
to find the options that are right for your particular situation.
Cash
Publicly traded securities
Closely held stock
Real estate
Retirement assets
U.S. savings bonds and annuities
Tools for giving your assets
There are a number of creative
ways you can make a planned gift to the Foundation. Each comes with
its own set of tax advantages; the list below is a starting point for
understanding your options.
Direct gifts
Life insurance
Bequests in will
Beneficiary proceeds
Life Estate Reserved
Gifts providing a stream of income
Gift Annuities Charitable Remainder
Trusts
Tax, legal & financial considerations
Cash
Most are familiar with donating cash to charity - it's one of the
simplest giving options. If you itemize, you can take a charitable
deduction for the amount of your charitable gift. If the deduction
exceeds 50% of your adjusted gross income, you can carry the excess
forward for up to five more years. Cash gifts can be made after death
with a bequest in your will or living trust. Cash can be used to establish
a gift annuity or charitable remainder trust.
Publicly traded securities
Gifts of appreciated stocks and bonds (including stock and bond mutual
funds) can also be used to establish a fund or add to an existing fund.
You can transfer appreciated securities owned for more than one year
to the Foundation and receive a deduction for the average value of
the security on the date the gift is made. When the security is sold
by the Foundation, neither you nor the Foundation will have to pay
capital gains tax. You can claim an income tax deduction for the year
in which the gift is made. If the gift exceeds 30% of your adjusted
gross income, you can carry the excess forward for five years. For
securities owned one year or less, the charitable deduction is based
on your cost basis in the security. You can also give securities with
a bequest in your will or living trust. Securities can be used to establish
a gift annuity or charitable remainder trust.
Closely held stock
It's possible for owners of closely held stock, such as Sub-Chapter
S Corporation (S Corp) stock or Sub-Chapter C Corporation (C Corp)
stock, to make a gift of these assets to the Foundation.
Owners of
these securities may be able to make a gift of these assets depending
on the limitations that accompany stock ownership.
The value for
purposes of the charitable deduction is typically determined by a
qualified appraisal.
C-Corp stock may work as an outright gift or as a funding asset for
a charitable remainder unitrust or a charitable lead trust.
S-Corp stock may work for an outright gift to the Foundation, but
it cannot be used as a funding asset for a charitable remainder trust
or a gift annuity.
Real estate
You can make outright gifts of real estate to the Foundation.
If you've owned it more than one year, both you and the Foundation
can avoid paying capital gains taxes on the appreciation in value.
The income tax deduction is usually equal to the fair market value
of the property, with some exceptions. A qualified appraisal is required.
If the amount of the gift exceeds 30% of your adjusted gross income,
you can carry the excess forward for up to five more years.
You can also give real estate with a bequest in your will or living
trust.
Unencumbered real estate can be used to establish a charitable remainder
unitrust.
Real Estate With Lifetime Use
You can make a gift of your personal residence, vacation home or
farm to the Foundation and retain a "life estate" in the
property.
You deed the property to the Foundation and receive an immediate
income tax deduction for a portion of the appraised fair market value.
This allows you to use or rent the property until your death, at which
time the Foundation takes possession of the property.
Retirement assets
Gift at Death
You can designate the Foundation as beneficiary of your IRAs, tax sheltered
annuities, or 401(k) or 403(b) plans. This avoids income, estate
and generation-skipping taxes.
Gift During Life
To make a direct gift of your IRA assets to the Foundation during your
lifetime, you must first withdraw the assets and recognize the distribution
for income tax purposes. You can then contribute the funds to the
Foundation and claim an income tax charitable deduction to mitigate
the income tax liability. Note: There may be penalties for early
withdrawal of IRA assets.
U.S. Savings Bonds and Annuities
U.S. Savings Bonds
The government restricts the transfer of Series E, EE, H and HH U.S.
Savings Bonds. You must cash in the bonds and give the cash proceeds.
However, due to income tax implications, it may be more advantageous
to bequeath the bonds in your will or living trust.
Annuities
Because ownership of commercial annuities, including variable annuities,
cannot be transferred to the Foundation as a gift during life (in
most cases), these assets are generally given as beneficiary proceeds
at death. Surrendering an annuity results in recognition of income
and possible early withdrawal penalties.
TOOLS FOR GIVING:
Direct gifts
Direct gifts can provide immediate financial support to the charitable
causes you value. Cash and publicly traded securities are the most
common types of direct gifts. Real estate and closely held stock
can also be given as direct gifts.
Life insurance
Gifts of life insurance often allows you to make a significantly
larger charitable gift than what might be possible using your current
assets.
You can make the Foundation the owner and beneficiary of the life
insurance contract and take a deduction for the ongoing premium payments
as you make them.
You can also receive tax benefits to making a gift of a paid-up life
insurance contract.
Or you can remain owner of the contract and name the Foundation as
partial, sole or contingent beneficiary of the life insurance death
benefit. No income tax deduction will result, but the gift will create
a charitable deduction for your estate
Requests in will or revocable living trust
Your estate includes any property, money or personal belongings that
you may have at the time of your death. Most people leave an estate
when they die, even though they may not have a great deal of wealth.
Those with estates, large and small, can arrange to leave a charitable
bequest by simply naming the Foundation in their will or living trust.
You can leave all or a portion of your estate to the Foundation
in your will or revocable living trust.
You can leave a specific dollar amount, a percentage of your estate
or specific assets.
Some people leave a paid life insurance policy or financial investments
such as stocks, bonds or CDs.
Beneficiary proceeds
By naming the Foundation as beneficiary, you can enjoy some flexibility
in your charitable giving as well as certain tax advantages.
You can name the Foundation as beneficiary on your life insurance
contract, annuities or retirement assets.
The Foundation receives the specified assets upon your death, and
you have the option of changing this designation throughout your life.
You can designate all or a portion of these assets to the Foundation.
Life Estate Reserved
With a gift of a personal residence, vacation home or farm to the
Foundation, you can retain a "life estate" in the property.
By deeding the property to the Foundation, you receive an immediate
income tax deduction for a portion of the appraised fair market value.
This allows you to use or rent the property until your death, at
which time the Foundation takes possession of the property.
The property you give is not subject to probate.
Gift providing a stream of income
Gift plans that offer a stream of income to the donor provide an
ideal option for those who wish to make a substantial gift but still
need an ongoing income from their assets. Even after providing years
of income to donors, the Foundation is still left with a good portion
of the original gift for charitable use.
Gift Annuities
A gift annuity is a simple written agreement through which you
make a gift to the Foundation and, in turn, receive guaranteed payments
for life. The minimum gift is $10,000. Your gift can be cash or appreciated
publicly traded securities. A portion of the payments is typically
tax-free.
Donors making a gift of appreciated securities recognize only a portion
of the capital gain, and do so over a period of time.
The income from gift annuities can begin immediately or be deferred.
The minimum age for a gift annuity is typically 50, but it can be lower
for deferred gift annuities with payments beginning after age 50.
The payment you receive is fixed and the percentage is based on life
expectancy, but tends to be higher than percentage payments from charitable
remainder trusts. Payments are guaranteed based on the full faith and
credit of the Foundation.
Gift annuities through the Foundation are available in all states
except California, New Jersey, Oregon, Hawaii, Illinois, Maryland,
New York, South Dakota and Wisconsin.
Charitable Remainder Trusts
You receive income from a charitable remainder trust for your lifetime(s)
or for a fixed term of up to 20 years. Charitable remainder trust donors
are allowed a charitable deduction equal to the present value of the
Foundation's remainder interest in the trust, subject to annual limitations.
With gifts of appreciated securities, you can bypass capital gains.
Annuity Trusts
With cash and/or publicly traded stocks, you can establish a charitable
remainder annuity trust and receive a dependable income for a term
of years or for life. The gift minimum is $50,000 cash and/or publicly
traded securities.
This income can be paid to you, a relative or a friend, with one,
two or more income beneficiaries possible, but there may be tax consequences
if someone other than the donor or the donor's spouse is named as an
income beneficiary.
The trust payment amount is fixed and the percentage is based on
life expectancy or a term of up to 20 years.
Annuity trust donors are typically 50 years old for lifetime trusts,
but they may be younger for a term-of-years trust.
Payments cannot be deferred and additional gifts cannot be made to
charitable remainder annuity trusts.
Unitrusts
Unitrusts are similar to annuity trusts, except that the payment
amount is variable - it's calculated annually and is based on a percentage
value of the trust assets. The gift minimum is $100,000 cash and/or
publicly traded securities; the minimum is $200,000 for real estate
or closely held stock.
You can use cash, publicly traded securities, closely held stock
and/or unencumbered real estate to establish a unitrust.
There's no limit to the number of contributions you can make.
You can't defer payments, except for a partial deferral through
a special type of trust called a "flip unitrust."
Testamentary Trusts
You can establish a charitable remainder trust at death to provide
an income to a surviving spouse or other person for life or a term
of years, then to benefit charity. By using retirement assets to
fund the trust, you may be able to bypass income and estate taxes
imposed on the retirement years. The beneficiary of the retirement
assets must be the trustee of the trust.
Charitable Lead Trusts
This allows you to designate the Foundation to receive a regular,
fixed amount from a trust for a specified time period or for the lifetime
of a designated person, after which the remainder of the trust passes
to your designated heirs or other non-charitable beneficiaries.
Tax, legal & financial implications
Charitable giving can result in significant tax, legal and financial
consequences. The Foundation cannot give you legal or tax advice. We
strongly encourage you to consult your own attorney and tax advisor
regarding your gifts.
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