To honor your beliefs, to educate youth, to cure diseases...

whatever is your mission, you can LEAVE A LEGACY®

1. What are the three kinds of gifts I can give to charity?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property).

Upon your death you can make a gift through your will or with a distribution from a retirement plan or life insurance policy.

You also have the option of making a gift that returns lifetime income to you, your spouse, or other individuals, such as a charitable gift annuity, pooled income fund, or charitable remainder unitrust or annuity trust.


2. What sort of assets can I use to make a gift?
Cash, publicly traded securities, the balance of your retirement account are among the most commonly given. Other assets can be very valuable but are more complicated to administer and must be reviewed by your charity's financial officers before they can be accepted. These include real estate, closely held stock and artwork.


3. What tax deduction will I receive for my gift?
It depends on the form your gift takes:

• Outright gifts generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains – a great tax benefit!
  
• Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to the mission of the recipient charity. The charity can advise you on this point. For another important detail, see question 7, below.
  
• Bequests do not generate a lifetime income tax deduction but they are exempt from estate tax.
  
• Similarly, life insurance distributions to your favorite charity are not income-tax deductible, but are exempt from estate tax. If you have made a charity the irrevocable owner and beneficiary of a policy during your lifetime, however, you may deduct annual gifts that offset premium payments (for more details on this point, see Question 5 below).
  
• The charitable deduction for a gift that returns income to you, such as a charitable gift annuity, a charitable remainder trust, or a pooled income fund is the fair market value of the gift asset minus the present value of the income interest you retain.
  

4. Can my favorite charity serve as the executor of my estate?
No. State law, the limitations of the charity's corporate powers, and its governing policies prevent it from taking such a role in your affairs.


5. I want to set up a life insurance policy, name my favorite charity as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
No. The IRS would not consider this scenario a "completed gift." It would say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. Your charity must be made the irrevocable owner of the policy for your gifts offsetting the charity's premium payments to be deductible.


6. Can I transfer my IRA to my favorite charity to set up a life-income gift, and avoid income tax on the transfer?
Proposed legislation would make the transfer tax-free. (Watch this Website for updates). However, under present law, any lifetime distributions from an IRA are included in your taxable income, even if these funds are transferred to charity. You do, however, receive a current charitable deduction when you establish a life income gift, which would partially offset the amount included in your taxable income.


7. I’d like to donate a painting. Will my charity determine its value for my income tax deduction?
No. By law a charity cannot appraise a gift of property for the donor. The IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value. The appraisal has to be related to the gift, too – an insurance appraisal won’t suffice. Your charity may be able to provide a list of qualified appraisers.


8. I’m interested in establishing a charitable gift annuity. What financial provisions does my charity make for the income payments to me and my husband?
Your charitable gift annuity will be treated as a general obligation of the charity, backed by all its corporate assets. The responsibility to make gift annuity payments is a key element in charities' financial policies.


9. I’m establishing a unitrust. My bank will serve as trustee, and I’m naming my favorite charity as the remainder beneficiary. My attorney is advising me to make that designation revocable. Will my charity still recognize me as a donor?
The charity will be grateful that you have named them as beneficiary. The charitable portion of your gift is deductible for income tax purposes (see Question 3 above). Because the charity's interest is not irrevocable, however, they will not give you gift credit until their remainder interest is paid or made irrevocable.