Ways of Giving
Gifts of Cash
The most common form of gifts has always been cash. Cash gifts may be
made payable to The Foundation in the form of cash, checks or credit cards.
ADVANTAGES: Gifts of cash are the most convenient way of giving. They are
fully deductible, provided the donor itemizes deductions. Cash gifts are
subject only to the limitation that an individual's total charitable
deductions in any year cannot exceed 50 percent of their adjusted gross
income. Contributions above 50 percent may be carried over for up to five
The Foundation’s program encourages pledges but recommends they
not exceed a five year period. You may ensure that your pledge is recorded
by completing a pledge card or a letter of intent and returning it to
The Foundation office. The initial payment should be included with the pledge.
ADVANTAGES: Pledges enable donors to plan a giving program which is convenient
and taxwise. Spreading the payment period over several years allows flexibility
of charitable deductions to be utilized in years that will provide the
most significant tax savings. A pledge also enables a donor to consider
a more significant investment in The Foundation than would otherwise be possible.
Many corporations have matching gift programs in which an employee's
gift may be matched in greater or lesser amounts by the company. If you
or your spouse is employed by such a company, we urge you to forward the
company's matching gift form with your own cash or pledge gift. Most
matching gift forms are housed in the company’s Human Resources
or Benefits office.
Gifts of stock are a convenient and tax-wise way to benefit The Foundation.
Stock certificates can be reassigned to The Foundation or they may be
transferred through the donor's broker. Even if you are not charitably
inclined, if you own appreciated stock you can improve your cash flow
and have your heirs regain the value of appreciated stock donated to a
qualified Charitable Remainder Trust using part of added cash flow to
pay for life insurance owned by your heirs. Assume you own stock bought
at a very low price that has quadrupled in value. If you hold it until
death, your heirs inherit it and if sold, capital gains taxes are avoided.
How can you help your heirs as well as yourself? Donate the stock during
your life to a qualified Charitable Remainder Unitrust or Charitable Remainder
Annuity Trust (explained below), retaining an annuity or income interest
for life. The Foundation can sell the stock and reinvest the proceeds
and use the income and part of the principal of the proceeds to pay you
an annuity for life. How does this help your heirs? You can give them
part of your annuity each year to pay for life insurance on your life
that they own and are the beneficiaries. If done correctly, the life insurance
will not be included in your taxable estate and, on your death, they get
the death proceeds to replace the value of the securities you donated
to the charitable trust. You get the net cash flow during your life that
should exceed any dividends you would have gotten by holding the stock.
You win, The Foundation wins and your heirs win.
ADVANTAGES: Direct gifts of securities, especially appreciated stocks,
can offer substantial tax savings. The federal income tax laws allow for
deduction of the full market value of long term appreciated securities
subject only to a limitation that 30 percent may be carried forward for
five years. By giving appreciated stock a donor can completely avoid paying
the capital gains tax on the appreciated value.
In the case of securities which have decreased in value, i.e., have a fair
market value less than the cost basis, the donor would benefit from selling
the securities, taking a loss for tax purposes, and then contributing
the cash to The Foundation.
Following these steps will give the donor both a deduction for the loss
and a charitable contribution deduction. In the case of both gains and
losses, contributing securities to the fundraising program for The Foundation
produces a significant tax advantage.
Closely Held Stock
If an individual owns controlling stock in a closely held corporation,
a gift of that stock to The Foundation can generate substantial tax benefits.
The donor will receive a charitable contribution deduction equal to the
fair market value of the stock, subject to the limitation rules that apply
to gifts of securities.
ADVANTAGES: Once the donor has given closely held stock, the donor's
corporation may redeem the shares of stock from The Foundation in an amount
equivalent to the value of the shares which were contributed. Thus, The
Foundation will be the recipient of cash. The donor will also carry out
philanthropic desires, receive an appropriate tax benefit, and not deplete
any personal liquid assets.
The Internal Revenue Service and the courts have approved this type of
transaction as long as The Foundation is not compelled by the corporation
to surrender the shares for redemption. If you control a closely held
corporation, you may wish to consider this beneficial, charitable giving vehicle.
Real estate is often overlooked as an opportunity for charitable giving.
The Foundation accepts gifts of houses, warehouses, residential rental
property, rental property, office buildings and undeveloped land.
A donor can also make a gift of a personal residence to The Foundation,
reserving the right to live in the house. If the gift is made on an irrevocable
basis, meaning that it cannot be altered after being given, then the donor
can qualify for an immediate income tax deduction for the present value
of The Foundation’s remainder interest in the property. This type
of gift is known as a "Life Estate Contract."
ADVANTAGES: A gift of real estate enables a donor to take assets that may
be of little or no current benefit personally to generate a sizable tax
deduction. At the same time, the gift allows for a significant contribution
to The Foundation. Gifts of real estate may also avoid capital gains taxes
on appreciated value in a similar way to appreciated securities as described
In the case of a ''Life Estate Contract,'' if a donor makes
a charitable contribution to The Foundation of the remainder interest
in a residence, the donor receives several benefits: (1)a substantial
charitable contribution deduction based on the value of the remainder
interest; (2) the right to continue to live in the residence; and (3)
the satisfaction of knowing that The Foundation will receive a substantial
future benefit from your contribution. Best of all, these have been accomplished
without an expenditure of cash or reduction of income.
Existing life insurance policies are rarely thought of as assets that
might comprise a charitable gift, but they provide excellent opportunities
for accomplishing charitable objectives. If the circumstance under which
a life insurance policy was purchased no longer applies, a donor may consider
putting that money to work for The Foundation. This can be done in one
of two ways: first, the donor can designate The Foundation as the sole
beneficiary of an existing or new policy; and, second, the donor can irrevocably
assign an existing policy to The Foundation.
ADVANTAGES: If the donor designates The Foundation as the sole beneficiary
of a life insurance policy, they may gain significant estate tax savings.
If the donor irrevocably assigns the ownership of a policy to The Foundation,
they are entitled to an immediate deduction for federal income tax purposes.
When a paid-up policy is contributed to The Foundation, the allowable
deduction is equal to its replacement value, unless that amount exceeds
the donor's tax basis in the policy, in which case the deduction is
limited to the basis. Life insurance represents an excellent vehicle for
giving to The Foundation.