Ways to make a major gift to St. John Health
The following items briefly describe various planning tools frequently used to make a major charitable gift:
Cash - Cash is a preferred form of payment for pledges, and donors are encouraged to make pledges for capital campaigns. Pledging a gift over a five-year period may allow for a more substantial gift and the most beneficial tax treatment.
Marketable Securities - Marketable securities may be donated instead of cash. The after-tax cost is less than a cash donation if the securities have appreciated in value, because capital gain is not taxed upon transfer to the charity.
Bequests - Gifts made to charity under a will or a trust. Bequests can be made as a specific dollar amount, a percentage of the total estate, a percentage of the residue of the estate, property (such as stock), a specific asset (such as your home), the remainder of an estate or as a contingent bequest.
Beneficiary Designations - Bank accounts, certificates of deposit, insurance, retirement plans (such as 401k, IRA, pension, profit sharing) are all great options for giving to charity.
Tangible Personal Property - An asset that can be touched, handled or moved by an individual (i.e., art, furniture, coin and stamp collections, livestock, jewelry, equipment, cars, boats, clothes or any similar asset or collectible owned by a donor).
Charitable Gift Annuities - A charitable gift annuity provides the donor with a guaranteed, specific income stream, often higher than received from a certificate of deposit, a U.S. Treasury bond or other investment.
Charitable Remainder Trusts - An irrevocable trust that benefits the donor or other individuals named by the donor, for a term of years or lives. Upon termination, remaining assets pass to one or more qualified charities. The two basic forms of charitable remainder trusts include the annuity trust and the unitrust.
Charitable Lead Trusts - Charitable lead trust arrangements are highly effective for avoiding or reducing the estate tax on assets transferred to family members, while also providing current gifts to charity for several years.
Real Estate - Real estate is sometimes overlooked but can be used effectively to fund a major gift. Residential, commercial or agricultural property may be contributed outright to charity or through various charitable trust arrangements.
Bargain Sales - A bargain sale of real property is another option. Real property may be sold to the charity at a 50% discount and then liquidated by the charity to provide funds for the campaign. The gift discount portion is deductible and the bargain sale proceeds can be paid to the donor in a lump sum or installments to provide an income stream.
Current Gift + Lifetime Bequest Pledge- Donors age 65 and older are good candidates for making a gift of cash or property now combined with a larger pledge of a gift from their estate. The combined gifts could secure a notable campaign gift naming opportunity equal to the present value of the current gift plus the binding estate pledge.
Donor Advised Funds - Donor advised funds are often created with a community foundation or major investment broker to function like a “charitable bank account” through which a donor can direct gifts to public charities. A donor advised fund is often funded with a large deductible gift in one year, while gifts to public charities are made over a period of years.
Private Foundations - Private family foundations are established to create a tax-leveraged philanthropic legacy and have the added advantage that the donor and family members on the family foundation board can invest and control the assets placed in the foundation, subject to certain limitations.
Charitable Lead Trusts - Charitable Lead Trustarrangements are highly effective for avoiding or reducing the estate tax on assets transferred to family members, while also providing current gifts to charity for several years.
Family Business Stock - Stock in a family business can be donated to charity and later redeemed or repurchased by the family corporation. This makes it possible to use corporate dollars to fund a major gift from the individual donor. Likewise, tax advisors often include a charitable gift of family business stock when transferring the business to family members or when selling it.
IRAs - Did you know that making a gift to St. John Health from your IRA or other qualified retirement plan is a great idea? If you are 70½ or older, you can request a distribution from your IRA (up to $100,000 in 2008 and again in 2009) to made directly to the St. John Health Foundation. Because the gift was made directly to St. John Health Foundation, it is excluded from your taxable gross income, and the gift counts toward your required minimum distribution—especially beneficial for those who do not itemize on their taxes.
Note: The Emergency Economic Stabilization Act of 2008 does not allow contributions to donor-advised funds, supporting organizations, private non-operating foundations, life income plans or charitable lead trusts.
A gift of your IRA (or percentage) using a beneficiary designation is simple and makes sense. When an IRA is left to an heir, it may be hit with both income and estate taxes but, should you chose to make a planned gift using your IRA through a beneficiary designation, this same gift to St. John Health Foundation is exempt from both taxes.
For information on making a planned gift to a St. John Health entity, please call Heidi Crisman, 586-582-7532.
This publication is offered as an educational service and not as legal advice. This information is of a general nature and should not be acted upon without first obtaining the advice of a professional advisor.
© Use by permission only. Contact St. John Health Foundation at 586-582-7532.
