Planned giving refers to charitable gifts that require some type of financial and/or tax planning before they are made. Planned gifts are popular because they can provide valuable tax benefits to the donor and possibly some type of income stream back to the donor or designated beneficiaries.
Very often, when we think of charitable giving, we think only in terms of an outright gift of cash or other assets. However, gifts to the Federation can also include bequests in a will and arrangements—such as a charitable gift annuity or charitable remainder trust—which provide financial and tax benefits to you today as well as a future gift to GFWC. These gifts range in complexity and can be set to meet the desires and needs of each donor.
Whether you donate cash or other assets, such as stock or real estate, funding a planned gift provides many benefits to you and GFWC. Benefits may include:
- Increased current or future income stream for you or others
- Immediate income tax deduction
- Reduction or avoidance of potential capital gains tax for gifts of appreciated assets
- Ability to pass assets to family at a reduced transfer cost
- Ability to make a significant donation to GFWC
Types of Planned Gifts
Planned gifts include bequests, trusts, and charitable gift annuities. Below are the most popular types of planned gifts.
Bequest. When a donor decides to leave assets to GFWC in her will, she is making a bequest. The donor's estate will receive a charitable estate tax deduction when the gift is distributed to GFWC at her death. There are many types of bequests; please consult your attorney for more information.
Charitable Gift Annuity. A gift annuity is a contract between you and GFWC. In return for a donation of cash or stock, GFWC agrees to pay a fixed income for life to you (and another, if you wish). You also can claim a charitable tax deduction for a portion of the original gift. If you fund a gift annuity with long-term capital gain property (such as stock), you will only have to report some of the potential gain that would have occurred if you had sold the stock outright.
Income from a gift annuity can be paid immediately or deferred for a period of years. Deferred gift annuities are often established by younger donors to supplement retirement income.
Charitable Remainder Trust. This tax-exempt trust makes fixed or variable income payments to you and/or your selected beneficiaries over lives or a selected term of years (not to exceed 20 years). You may claim a charitable income tax deduction and can avoid all upfront capital gains tax for gifts of appreciated property (such as stock or real estate). At the end of the trust term, GFWC receives whatever remains in the trust.
Charitable remainder trusts are extremely flexible planning tools and can be used to achieve a number of personal financial, tax, and family objectives.
Charitable Lead Trust. This trust makes payments, either a fixed amount (annuity trust) or a variable (unitrust) amount to GFWC during its selected term. At the end of the trust term, the principal may be returned to you (grantor lead trust) or to heirs named by you (a non-grantor lead trust). You may claim a charitable income tax deduction with a grantor lead trust or a charitable gift tax deduction with a non-grantor lead trust.
Consider investing in GFWC's future by participating in our planned giving program and allow your investment to work for you and benefit your communities through GFWC programs. Please consult your personal legal and financial advisors before completing any gift arrangement.