We were, initially, hesitant to produce anything on planned gift options under the current President and his administration. Simply put, it seems that anything, including tax codes, can change on a daily basis. Please ask your donors to check with a financial advisor when considering these, or any types, of planned gifts.
That being said, we think it is important that your nonprofit move forward in any political climate and that includes should include offering your donors and prospects planned gift options. You can read about Bequests and Estate Gifts by clicking here.
- Charitable Gift Annuities
A charitable gift annuity is a contribution made to a nonprofit that can provide a donor with a secure source of income for life. When the donor gives a gift of money or securities as a charitable gift annuity, a payout rate is determined based on the age of the beneficiary at the time of the gift. The rate will remain constant for the life of the beneficiary(s).In other words, this gift creates an agreement that the nonprofit organization accepts a gift of cash or property now, and continually pays a predictable fixed-income payout for life. What’s left of the gift after the beneficiary’s lifetime (or that of the assignee) will continue to support an organization for generations to come.
- Charitable Remainder Unitrust
This gift is similar to the Charitable Gift Annuity in that it offers a way to make a meaningful donation that combines a charitable donation with predictable income during the donor or beneficiary’s lifetime. The securities are given to the nonprofit. In this case, the nonprofit agrees to pay a variable amount based on a fixed percentage of the annual determined value of the assets (unitrust). This can be beneficial if you expect the asset to increase in value. After the donor’s death, the remaining balance in the trust is payable to the nonprofit.
- Charitable Lead Trusts
Charitable lead trusts are a slightly different take on a Charitable Remainder Unitrust. Instead of providing payments to a beneficiary and leaving the remainder of the asset to nonprofit, you would give the payments to nonprofit, leaving the asset(s) to your designated beneficiaries. By taking the first, or lead, gift, nonprofit will help reduce estate taxes for those in a high bracket.
If you would like Mersky, Jaffe & Associates, nonprofit consultants, to help you initiate a planned giving program for your nonprofit, email us by clicking here