21 Ways to Make a Difference
Many people who support our mission say they derive great satisfaction
from their generosity and would like to do more. We can suggest creative
ways to support us that you might not have considered. If you are interested
in any of these ideas, please feel free to call us to discuss them in
greater detail.
Some Old Favorites
Nothing could be easier than making a gift of cash to a charitable organization.
It is the most common gift and the one you probably think of first. All cash
donations are deductible if you itemize in the year of contribution and up
to a limit of 50 percent of your adjusted gross income. Any excess deductions
can be carried forward for the next five years. There are several types of
cash contributions you can make.
- Annual or Year-end Gifts
Many people make once-a-year charitable donations, frequently near the end
of the year.
- "In Memory of" Gifts
You can make a gift in memory of a friend or loved one. This can be done
at the time of death or on the anniversary of a significant date, such
as a birthday or a holiday.
- "In Honor of" Gifts
A cash donation can be made in honor of anyone you choose on the occasion
of his or her birthday, graduation, anniversary or other opportunities.
It is the perfect gift for someone who has everything.
- Gifts "In lieu of flowers"
You may decide to make a gift to us in lieu of flowers when someone you know
has passed away, because that person appreciated our work or had some connection
to us. Sometimes, the family of a donor requests that donations be made
to us instead of sending flower arrangements.
- Life Insurance
Do you have life insurance policies that are no longer needed? You may either
donate the life insurance policy to us, or simply name us as the beneficiary
of a life insurance policy. For the gift of a paid-up policy, you will
be entitled to an income tax deduction equal to the lesser of the cash
value of the policy or the total premiums paid. To qualify for the federal
charitable contribution deduction on a gift of an existing policy you must
name the charity owner and beneficiary. Even if you are still paying premiums
on your policy you can give it away, and future gifts to us to pay the
premiums will be tax deductible. Of course, the easiest way to use life
insurance for charitable giving is to simply name us as the beneficiary
of a policy. There are no current tax benefits to this arrangement because
it is not irrevocable, and it is only partial interest in the policy; however,
it provides a very generous gift with attractive tax benefits upon your
death.
- Bequests
Have you made provisions in your will to benefit us? Bequests are the most
popular type of planned gifts. Anything you leave to charity will reduce
the size of your taxable estate while helping a good cause. You can leave
a specific bequest of a specified sum of money or a particular piece of
property to us. Other options are to leave a percentage of your estate
or a percentage of the residue to us after making provisions for family
and friends. For instance, you could leave us a specific bequest of $10,000,
or you could leave us 10 percent of the residue of your estate.
Stocks and publicly traded securities are easy to give and offer great tax
advantages. You can transfer the stock to us electronically through your
broker or mail to us the stock certificate and a signed stock power for each
certificate. To protect against possible fraud, the certificates and the
stock powers should be mailed separately.
The best stocks to use for charitable giving are those that have increased
greatly in value, particularly those producing a low yield. Even if it is
stock you wish to keep in your portfolio, by giving us the stock and using
cash to buy the same stock through your broker, you will have received the
same income tax deduction but will have a new, higher basis in the stock.
- Appreciated Securities
Property that has risen in value and that you've held for more than one year
should be transferred directly to us. You pay no capital gains tax on this
transaction and you can deduct the full fair market value. Fair market
value is calculated using the average of the high and low share price on
the gift date.
- Depreciated Securities
If you have stock losses, sell the stock yourself to realize the loss and
take the deduction for tax purposes. Then generate a charitable contribution
deduction by donating the cash proceeds of the sale to us.
Other Considerations
A gift of real estate offers you the opportunity to make a significant contribution
to charity with a tax-friendly outcome. There are several ways to donate
real estate depending on your situation.
- An Outright Gift
If you own property that is fully paid off, has appreciated in value and
that you no longer need or use, such as a second home or vacation property,
an outright gift may be the simplest solution. You can deduct the fair
market value of your gift and avoid all capital gains taxes. Plus, you
no longer have to worry about the carrying costs of continued ownership,
and you have removed that asset from your taxable estate.
- A Retained Life Estate
Did you know that you can transfer the deed of your personal residence or
farm to us now and keep the right to use the property for your lifetime
and that of your spouse? You will receive a current charitable deduction
in an amount that is based upon your life expectancy and the value of the
property.
- Bargain Sale
A bargain sale can be used to generate a gift that is less than the full
fair market value of the property. In this scenario you agree to sell the
property to a charitable organization at less than its fair market value.
With this type of charitable gift, the difference between the sale price
and the fair market value is the amount that determines your charitable
deduction. While the tax rules relating to a bargain sale are somewhat
complex, the net result is often more favorable than selling the property
at fair market value and making a charitable contribution from the realized
capital gain.
- Tangible Personal Property
Many items of tangible personal property make suitable charitable gifts.
The available tax deduction depends on whether or not the charity will
use the property in a way that is related to its tax-exempt purpose.
Related use personal property is deductible at the
full fair market value. Example: a piece of artwork donated
to an art museum (other than for sale by the museum). The
deduction for nonrelated use personal property is limited
to the donor's tax basis in the property. Example: a valuable
antique donated to a medical research organization.
- Charitable Lead Trust
A charitable lead trust is a type of charitable trust that pays income to
one or more charitable organizations, typically for a period of years,
and then the remaining assets of the trust pass to noncharitable beneficiaries,
such as family members. Based upon the circumstances, the type of property
used and the intended beneficiaries, lead trusts can have significant estate
and gift tax benefits and can be used in a wide variety of ways. It usually
does not provide a current income tax deduction, depending on whether the
donor wishes to be taxed on the trust's income, but it can effectively
pass property to family members at reduced estate and gift tax costs.
- Bank Accounts and CDs
Are you aware that you can name us as the "payable-on-death beneficiary" of
your bank accounts (savings or checking) or on any certificates of deposit?
You own the assets for your lifetime and have them available for your use.
Upon your death, the assets pass directly to us without going through probate.
Simply visit your bank and request to name a beneficiary on your accounts
or CDs. You will be asked to fill out a form and you can change your beneficiary
designation anytime you wish.
- Retirement Plan Assets
Because our tax laws often subject retirement plan assets to the highest
combined income and estate taxes, charitable donations of these assets
may be the most efficient estate planning option. Many of the techniques
discussed in this brochure can be used to create generous charitable gifts,
usually at your death, from retirement plan assets that could otherwise
be subject to tax rates of up to 80 percent. At the same time, you can
pass more tax-favored assets to your family. Due to the variety and complexity
of retirement plans, you should consult an attorney or tax specialist for
a strategy best suited to your situation.
For More Information
The array of gift-giving options and the ways you can incorporate them into
your estate plan are as varied as the circumstances they serve. We are always
available to provide you with further information and suggestions on gifts
that fit with your lifestyle and philanthropic goals. Just give us a call.
NDH Foundation supports the missions of Northern Dutchess Hospital
and The Thompson House. For information about the foundation, please
contact Deborah Stone Breen, Executive Director, at (845) 871-3501.
The information in
this publication is not intended as legal advice. For legal advise,
please consult an attorney. Figures cited in examples are based on
current rates at the time of printing and are subject to change.
|  |
|
