Cash gifts are the swiftest and easiest form of contribution.
Appreciated securities may frequently be more advantageous than making a direct cash gift. Contributing appreciated stock or mutual fund shares allows the donor to avoid capital gains tax on the appreciation and usually allows the donor to deduct the full fair market value of the stock for income tax purposes. For life income gifts, giving appreciated stock means the donor may give an asset with little or no yield in exchange for annual income. Closely held stock may also be given to the Foundation.
Real estate gifts provide tax savings similar to gifts of appreciated securities. Donors may also benefit by making a gift of a future interest in real estate while retaining a life interest in the property. Real estate gifts must be readily marketable and free of environmental concerns.
Life insurance policy ownership may be assigned to the Foundation. By naming it as an irrevocable beneficiary gives the donor an immediate tax deduction for the present cash value of the policy, while at the same time making a considerable contribution. If the donor continues paying the annual premiums, these too, may be tax-deductible.
Planned gifts are welcomed. A Charitable Remainder Trust gives a lifetime income to the donor while also providing a future gift of the trust to the Foundation. In addition to cash, securities and real estate, personal property (i.e., artwork, vehicles, or collectibles) that could be sold to produce income, may also be used to make a gift or establish a planned gift, such as a charitable remainder or charitable lead trust.
A bequest to the Foundation through a will is not subject to estate taxes. Adding a codicil to your will naming the Foundation, describing your gift and designating how you want the Foundation to use the gift, will create a permanent legacy for your community in your family name. Some donors also have substantial retirement plan assets, (401 (k), IRA, or Keogh plans) in their estates. From a tax standpoint, these assets are often the most advantageous to donate via a bequest or charitable trust as they may be heavily taxed as part of the estate and as income to beneficiaries. The Foundation can be named as the plan beneficiary to avoid these taxes. When making any type of planned gift, be certain to consult your financial advisor to structure your will and review your retirement plan accounts to insure the best use these assets.
A Private foundation may be transferred into the Community Trust Foundation, keeping your foundation’s name and board intact by creating a donor-advised fund. By transferring all or part of the assets of the private foundation to the component fund of the Foundation, you avoid the considerable paperwork, administrative duties, restrictions and taxes imposed upon private foundations. Establishing your fund as a donor-advised fund allows you to keep an advisory role in grant making from the fund.