Donors: Planned Giving Tools

Many people wish to give back to the community, but they want to be sure they will remain financially secure. Here are several examples of tax-wise giving that can ensure your future.

Charitable Lead Trust
The charitable lead trust pays an annual income to a charity or charities for a specified period of years. At the end of the designated time period, the principal of the trust reverts to the grantor or passes to non-charitable beneficiaries (often, descendants of the grantor) upon termination of the trust term. For donors with larger estates, lead trusts offer an attractive way to make immediate charitable gifts in combination with transfers of assets to beneficiaries at substantially reduced gift and estate tax costs. These gifts may also be ideal for persons still in the work force, whose income from assets is not needed and puts them in a higher tax bracket.

Deferred Charitable Gift Annuities
These simple, inexpensive contracts are very attractive to 40 to 60 year old donors with high current income, who could benefit from a current tax deduction and are interested in augmenting retirement income on a tax-favored basis. There is no cost to establish a gift annuity with the Community Foundation. Click here for a deferred charitable gift annuity agreement template.

Gifts of Real Estate with a Retained Life Interest
These gifts provide the donor with a charitable deduction for the present value of the remainder interest and permit the donor to escape any potential capital gain tax on built-in appreciation. Most importantly the donor may continue to occupy the residence or operate the farm without disruption, if they wish.

Gifts under a Will
After you have assigned sentimental possessions and provided for relatives, you may decide that you wish to help make the world a better place. Gifts under wills have become an important part of American philanthropic tradition because they enable individuals to make significant gifts they may not have been able to make during life. Gifts to charities designated in a will may significantly reduce the tax burden of the estate. Specific bequests direct a specific piece of property be given to a designated charity. General bequests direct a specified dollar amount be given to a designated charity. Residual bequests designate all or a portion of the remainder of an estate to a charity, after all debts, taxes, and other bequests have been paid. Contingent bequests identify a charity as an alternate beneficiary only if the primary intention cannot be met. This ensures the estate will pass to charity rather than unintended beneficiaries - including the courts and government. Click here for sample bequest language.

Immediate Charitable Gift Annuities
Popular with older adults, these simple, inexpensive contracts provide guaranteed income for life (a portion of which is tax free) and an income tax deduction during the year of the gift. The payout of the annuity is based upon actuarial data and depends upon the age of the donor, interest rates, and the number of beneficiaries. There is no cost to establish a gift annuity with the Community Foundation. Click here for an immediate gift annuity agreement template.

Irrevocable Charitable Remainder Annuity Trusts
These trusts enable donors to support worthwhile causes while augmenting current income. They provide fixed payments to the beneficiary(ies) of at least 5% of the initial fair market value of the assets. Payments do not vary with the value of the trust. IRS regulations prohibit additional contributions to an annuity trust.

Irrevocable Charitable Remainder Unitrusts
These trusts enable donors to support worthwhile causes while augmenting current income. They provide variable payments to the beneficiary(ies) of at least 5% of the assets, valued annually. The amount varies according to the value of the trust. Regulations allow additional contributions to the unitrust.