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A life income gift is a type of planned giving that provides donors with an opportunity to support their favorite nonprofit institution while also providing them with regular, predictable income. It can provide substantial tax savings and satisfaction for both the donor and recipient.
There are several types of gift arrangements that can help you achieve these goals. The most popular are charitable gift annuities and trusts.
Charitable gift annuities, or CGAs, provide a guaranteed, fixed income for you and/or one or more beneficiaries in exchange for cash or securities of $10,000 or more. You make your gift, and then UMF invests the money or securities to provide you with a steady source of income for life. The remaining balance is used for the purpose that you outlined at the time of your gift.
Another popular life income gift is a charitable remainder trust (CRT). A CRT is a separate tax-exempt trust that you establish, and that holds assets that can include cash, publicly traded securities, some types of closely held stock, real estate or other non-cash property. The trust pays you or one or more beneficiaries a fixed percentage of the value of the trust as an income, typically 5%, until the end of the trust’s life.
These trusts are a very flexible way to provide for yourself or loved ones while making a significant gift to Duke. The trust can be funded with different kinds of assets–including real estate–and can be tailored to your specific needs and preferences.
Many donors set up CGAs because they do not want to sell appreciated securities that are not producing income. They may also want to use assets that would otherwise be subject to estate and capital gains taxes, but have not earned enough interest to cover expenses.
A trust can also be created to benefit multiple charities, such as Duke. It is not uncommon for CRTs to be established with gifts of real estate, stocks or bonds.
The trustee of the CRT manages the investments and makes payments to you or a beneficiary. These payments may be a percentage of the trust’s value, or a fixed amount each year, depending on your wishes.
Creating a CRT or another type of life income gift is an excellent way to support Westminster Seminary California while generating a reliable source of income. These gifts offer significant tax benefits and can be customized for your specific needs and objectives.
These gifts also can provide you with a meaningful charitable contribution. They are an ideal option for those who are concerned about retirement income, but who want to contribute in a substantial manner and who also want to be sure that their gift will be used to support the School’s mission.
Other common forms of life income gifts include charitable gift annuities and pooled income funds. These types of gifts are created by combining multiple individual contributions into a trust that is invested for Harvard. The income from these gifts is paid to you and/or your beneficiaries for life, and the remaining principal is transferred to Harvard upon the death of your last income beneficiary.
