Ways to Give
The Columbia Foundation offers a wide range of gifting options and vehicles to establish or add to a named charitable fund at The Columbia Foundation. The Foundation is recognized by the Internal Revenue Service as a public charity. Consequently, donors are provided with the maximum tax benefits allowed by law.
Gifts of Cash
Gifts of Appreciated Property
Gifts Through Wills
Gifts Through Life Insurance
Gifts Through Retirement Accounts
Gifts Through Charitable Remainder Trusts
Unsure of how much you want to donate? Visit NewTitheCalc, a feature of Sharing the Wealth from Minnesota Public Radio. Just follow the NewTitheCalc links when you arrive.
1. Gifts of Cash
Simplicity and ease of delivery are the major factors in making cash the most popular type of charitable gift. A gift of cash is considered made on the date it is hand-delivered or mailed. It’s simple and straightforward.
You can establish a fund in your name or contribute to an established fund by simply donating cash or writing a check. As the fund grows, you may add to it as you wish. You receive a full tax deduction for your contribution in the year you make it. The income generated by the money you contribute to the fund will be distributed. Or, you can ask that a portion of the principal periodically be paid out. The cash gift has great flexibility and gives you immediate and maximum tax deductibility.
2. Gifts of Appreciated Property
A viable alternative to a cash gift is a gift of property. With careful planning, charitable gifts of certain types of assets will provide even greater tax benefits to the donor than a gift of equivalent value in cash.
The most favorable tax benefits are generated by contributions of appreciated long-term capital-gain securities and real estate. In addition to receiving a charitable deduction for the full fair market value of such a gift, the donor avoids any potential tax on the capital-gain element in the gifted property and any sales commission that would be payable upon sale of the asset.
In this case, you will have given more at less cost than by giving cash because the appreciated securities such as stocks or bonds are now worth more than they were when you acquired them.
When you donate the securities to a new fund in your name or to an already established fund within a foundation, you get the maximum tax deduction. In fact, if the amount is larger than you can use in one year, you can carryover the surplus as deductions over the next five years. The programs, services, and charities that you have chosen to support will each receive cash. So, everyone benefits.
3. Gifts Through Wills
Each year thousands of individuals, exercising their privilege to determine the final distribution of their estates, designate that a portion of their assets be used for the benefit and support of their favorite charitable organizations. Gifts by Will have become an integral part of our philanthropic tradition, because such gifts enable a person to make significant contributions that may not have been possible during life.
Typically, when you make a new Will, you first take care of all the usual details, assign sentimental possessions, and provide for family. Then, to perpetuate the charitable work you have contributed to during your life, you may choose to make a bequest to a charitable foundation that will ensure income for your community in perpetuity.
4. Gifts Through Life Insurance
An important, but frequently overlooked, role of life insurance is the one it can play in planned charitable giving. Life insurance itself can be the direct funding medium of a gift, permitting the donor to make a substantial gift for a relatively modest annual outlay. Life insurance can also be used to replace an asset that has been given to a charitable organization. Premiums may be considered a charitable tax deduction.
Life insurance can help you achieve your charitable goals when you do not have a lot of money. You may take out a policy and designate a charitable foundation as the beneficiary. You pay the annual premium which becomes a charitable tax deduction annually.
Another way of using life insurance is to donate a paid-up policy. Perhaps you have been paying premiums on life insurance for years, and now the protection it offered earlier is really no longer needed. The policies have some value and you would like charity to benefit.
When you donate the policies to the fund of your choosing, you get a tax deduction now, usually in an amount similar to their cash surrender value. The fund grows, and charitable organizations in your community are benefited in your name.
5. Gifts Through Retirement Accounts
As you make your financial plans for retirement and contemplate your estate plans, you will be reminded of the tax rules on retirement accounts and the effects of estate and inheritance taxes.
As a result of the tax rules, it is important that you address this as part of your overall estate and financial planning matters. After discussing this with your tax advisor, you may realize it is to your advantage to utilize some of these qualified retirement monies for charitable interest purposes. There are a number of planning opportunities available to address these matters.
Even if your retirement fund is modest, you may want to consider a secondary beneficiary designation to a charitable foundation as a means to fund your philanthropic interests.
6. Gifts Through Charitable Remainder Trusts
A trust is an arrangement whereby the creator of the trust (“grantor”) gives legal title to assets to someone else (a “trustee”) who manages the assets on the grantor’s behalf. A trustee may be a qualified institution or an individual.
A charitable remainder trust is a type of irrevocable trust that splits the benefits between non-charitable beneficiaries (typically the grantor and one or more individuals), and a charitable organization. The donor or grantor’s interest is called an income interest. This means the donor/grantor and his beneficiaries receive an income produced by the trust over a lifetime or a term of years but not in excess of 20 years.
The charity’s interest is called a remainder interest. This is because, upon expiration of all non-charitable interests, the remainder of the trust goes to the charity.