Charitable Giving

Giving to charity can provide many benefits and opportunities, both to the charity and to you. The charity, of course, benefits from a donation that can help to further its cause. As the donor, you may receive tax benefits along with the satisfaction that comes with making the gift. The ways in which gifts can be made to charity vary and can be tailored to achieve specific planning objectives.

What is Comprehensive Charitable Planning? Comprehensive Charitable Planning is a planning approach to giving that takes into account your overall personal and charitable planning objectives. You can design your charitable gifts to be extensive and tailor them to preserve and transfer your own personal wealth.

Gifts of almost any type of asset can be made to charity, including cash, securities, real estate, and even life insurance.
Benefits of making charitable gifts. When making charitable gifts, you and the charity benefit in a number of different ways:
• The charity receives a gift it can count on to further its cause.
• In most cases, the charity benefits from the full value of the asset transferred since taxes may not apply.
• You may benefit from the savings associated with a charitable income tax deduction.
• You may be able to avoid a lump-sum capital gains tax on a highly appreciated asset.
• You may achieve significant gift tax savings and minimize estate taxes.
• You may be able to retain an income from the transferred asset for lifetime or for a period of years.
• You can diversify a concentrated stock position without incurring immediate taxes.
• The asset given to charity can be replaced at a discount with life insurance.

Are you one of those people looking for ways to give back?
Talk to friends, neighbors and your children for ideas on how you can help out and make a difference. Use your checked items on the prior page as starting points for discussion. Volunteering can take many forms, such as:

• Mentoring programs
• Visiting the elderly or infirmed
• Coaching a sports team
• Helping out at a church, hospital or school
• Fundraising for illnesses, charities and educational programs

If you still need more help finding a place to volunteer, you may want to try www.volunteermatch.org. Simply enter your zip code and your area of interest. VolunteerMatch will provide you with a list of opportunities that fit your specific criteria, which you can sort by distance.

How Charitable Giving Works
You can transfer an asset directly to a charitable organization during your lifetime or at death, and at the same time, reduce your taxable estate. You can also make an indirect gift by using a charitable trust or charitable life estate that provides benefits to both you and the charity. Moreover, assets you transfer to charity can be replaced at a discount for your family through the use of life insurance. What’s more, the savings from a charitable income tax deduction can even be used to fund a much needed life insurance policy.

 Tax benefits will be limited based on the type of asset transferred, the type of charity to benefit, the type of trust being used, if any, as well as your adjusted gross income (AGI) level. The following charts provide only a general summary of what value the charitable income tax deduction is based on, as well as the limitations placed on the deduction once calculated. You should consult your own tax advisor to determine the deductibility of a specific asset for charitable planning purposes.

The principal purpose of a charity or foundation is to make grants to unrelated organizations or institutions, or to individuals for scientific, educational, cultural, religious, or other charitable purposes. The most common distinguishing characteristic of a private foundation is that most of its funds come from one source, such as an individual, a family, or a corporation. As a result, a private foundation generally does not engage in fundraising, but receives its funds through continuous contributions and investment income. Note, however, there is potentially more control over the grant-making process by contributors of a private foundation. As a result, there is more room for abuse, and strict rules apply to gifts made to private foundations.

A public charity normally receives its assets from multiple sources, which may include private foundations, individuals, government agencies, and fees for service. Moreover, a public charity must continue to seek money from diverse sources in order to retain its public status.

How Charitable Gifts Can Be Made Making direct gifts... • Gifts of cash, securities, or real estate: When an asset is given away to charity, typically the charity will sell the asset without any tax consequences, since it is a tax-exempt entity. The charity will then use the proceeds from the sale for its charitable purposes. The income tax eduction available to you will be based on the certain limitations.

• Gifts of life insurance policies: A gift of a life insurance policy on your life (or the joint lives of you and your spouse) can benefit a charity significantly, though the benefit is delayed until death, and scheduled premiums, if any, must be paid by the charity in order to sustain the policy. However, you can also make annual cash gifts to the charity equal to the premium due and you may receive a charitable income tax deduction.

• Transfer Existing Policy
  
• Name charity as policy beneficiary
  
• Charity-owned life insurance

For more information, please contact your representative or our firm so we may assist you.