Types of Gifts
Cash assets are the simplest and most convenient gift. Cash donations are tax deductible as long as the donor itemizes his or her deductions. Up to 50% of adjusted gross income can be deducted in any one year with the excess deducted over the next five years.
A bequest in a donor's will naming the organization as a beneficiary is another ideal way to create a fund. Estate taxes may be significantly reduced and the fund will continue to work as a living symbol of the donor's interests.
Some corporations provide matching gift programs in recognition of an employee's or other eligible individual's support of a nonprofit organization. A personal gift may be enhanced substantially if the donor's employer has such a program. Matching gifts are usually equal to the donor's gift, although some corporations will match on a two-to-one ratio.
Donors of securities pay no capital gains and receive the maximum allowable tax deduction under the law, for the full market value of appreciated securities given to the organization. Giving appreciated assets is a method to maximize the charitable contribution to the organization. Because of capital gains considerations, it is more beneficial to transfer the appreciated securities directly to the organization rather than sell them and donate the proceeds of the sale. For depreciated securities it is usually best to sell the assets outright and then donate the proceeds to the campaign.
A gift of real estate held for more than one year by the owner can yield the same tax advantages as gifts of securities. The organization's ability to accept real estate gifts usually depends upon a number of factors, including current market conditions and the value and condition of the property.
Transfer of Private Foundation Assets
The expense and time of administering a private foundation can become an unwanted burden. Transferring the assets of a private foundation to a donor-advised fund at the organization provides significant tax and administrative benefits.
If the protection of a life insurance policy is no longer needed, it may prove a practical, tax-deductible gift. Or a donor may retain ownership of a policy naming the organization as a beneficiary, resulting in an estate-tax reduction but no deduction for income tax purposes.
Charitable Remainder Trusts
A charitable remainder trust (CRT) is a life-income gift that pays income to an individual beneficiary or beneficiaries while providing a future gift to the organization. A CRT can be funded with a gift of cash or property and generates a current income tax deduction for the donor. To calculate a Charitable Remainder Annuity Trust click here.
Charitable Lead Trusts
A charitable lead trust is a gift held in trust that pays income to the organization over a multiple-year term. At the end of the term, the donors or their beneficiaries receive the assets in the trust. Charitable lead trusts can provide dramatic gift and estate tax savings for relatively large estates. To calculate a Charitable Lead Trust click here.
IRA or Qualified Retirement Plans?
A donor can name the organization as the beneficiary of an IRA or qualified retirement plan. Depending upon accumulations, retirement plan assets can be subject to multiple taxation if left to heirs. A gift of retirement plan assets can even be used to establish a charitable remainder trust to provide income to a spouse or family members.
For more information about ways to give to SVSU's 50th anniversary Talent. Opportunity. Promise. campaign please call the SVSU Foundation Office at 989-964-4000 or click here to email us.
For more information about planned giving visit the Planned Giving Design Center.