Giving Options
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
Real Estate with Lifetime Use
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
Annuity 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 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
Bequests 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 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
TrustsYou 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.