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Ask Yourself These Four Questions When Planning a Charitable Gift

Posted June 2016

So you’ve decided to consider a charitable gift to our organization? You are to be commended for your desire to make a difference. To help plan your gift, we suggest that you ask yourself the following four questions:

1. What asset shall I give?

If you are making a modest annual gift, most likely you will simply write a check or make an electronic transfer. However, if you will be contributing a larger amount, cash is not necessarily the best asset. You may realize a greater tax benefit if you contribute appreciated securities—such as stocks, bonds, and mutual funds—because you not only receive a charitable deduction for market value but also avoid taxation of the capital gain.

2. When will I make my gift?

If you can afford to forego income from some of your investments, you can make an outright gift now. That will enable you to meet a current need of ours and see what your gift is actually accomplishing. Possibly, you hesitate to make a major outright gift because you do not know what the future holds. You want to be sure you would have enough for prolonged care, should that be necessary, and you may want to have capital available for opportune investments or to be able to respond to family members who need assistance. In such cases you might arrange the gift now but have it become effective at the end of your life.

3. How will I make my gift?

Fundamentally, there are three ways to make a gift:

  1. You can give property outright, relinquishing all control and enabling us to use it now.
  2. You can arrange a future gift but retain ownership of the asset and the right to change your mind. This is what you do when you include us in your will or name us as a beneficiary of a life insurance policy or funds remaining in a retirement plan.
  3. You can transfer an asset and retain an income from it. A commonly used instrument for doing this is a charitable remainder trust that will pay income to you and/or another person or persons. Such a trust can be designed to pay fixed or variable income, and it offers tax benefits.

4. For what purpose shall I make my gift?

You might make a gift with no strings attached, allowing it to be used where it is most needed. On the other hand, you might earmark it for a particular purpose—such as a new building, a program that interests you, or an endowment. A named endowment can be quite appealing because your name and/or the name of another person you wish to honor can be permanently associated with our organization—a charity that expresses your values. And you are helping to ensure that our work will continue indefinitely into the future.

Answering questions such as these is what is meant by gift planning, or “planned giving,” as the process is also known. A planned giving officer from our organization would be pleased to provide guidance as you address these four questions in order to design your gift in the best possible way.

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