12 Ways to Make a Difference
Many who support Concordia’s mission say they derive great satisfaction from their generosity and would like to do more. We can suggest creative ways to support Concordia that you might not have considered. If you are interested in any of these ideas, please feel free to call Nathan Laible, Director of Planned Giving, to discuss them in greater detail.
Some Old Favorites
1. Cash. Nothing could be easier than making a gift of cash to Concordia. It is the most common gift and the one you probably think of first. All cash donations are deductible, if you itemize in the year of contribution, up to 50 percent of your adjusted gross income. Any excess deductions can be carried forward for the next five years. You can make year-end gifts, or make a gift in memory or honor of a friend or loved one, perhaps on the occasion of a birthday, graduation, anniversary or other special day. It is the perfect gift for someone who has everything.
2. Life insurance. Do you have life insurance policies that are no longer needed? You may either donate the life insurance policy to us, or simply name us as the beneficiary.
3. Bequests. Have you made provisions in your will to benefit us? Bequests are the most popular type of planned gifts. Anything you leave to Concordia will reduce the size of your taxable estate while ensuring that future students will receive a Lutheran education. You can leave a specific bequest of a specified sum of money or a particular piece of property. Other options are to leave a percentage of your estate or a percentage of the residue to Concordia after making provisions for family and friends. For instance, you could give Concordia a specific bequest of $10,000, or you could give 10 percent of the residue of your estate.
4. Securities. Stocks and publicly traded securities are easy to give and offer great tax advantages. The best stocks to use for charitable giving are those that have increased greatly in value, particularly those producing a low yield. If you have held them for more than one year, you will pay no capital gains tax on this transaction, and you can deduct the full fair market value.
5. Bank accounts and CDs. Are you aware that you can name Concordia University, St. Paul, as the "payable-on-death beneficiary" of your bank accounts or on certificates of deposit? You own the assets for your lifetime and have them available for your use. Upon your death, the assets pass directly to Concordia without going through probate. Simply visit your bank and request the necessary forms to name a beneficiary on your accounts or CDs. You can change beneficiary designations at any time.
6. Retirement plan assets. Because our tax laws often subject retirement plan assets to the highest combined income and estate taxes, charitable donations of these assets may be the most efficient estate planning option. Many of the techniques discussed in this brochure can be used to create generous charitable gifts, usually at your death, from retirement plan assets that could otherwise be subject to tax rates of nearly 65 percent. At the same time, you can pass more tax-favored assets to your family. Because of the variety and complexity of retirement plans, you should consult an attorney or tax specialist for a strategy best suited to your situation.
Gifts That Give Back to You
There are several ways you can make a significant future gift to Concordia while retaining or in many cases increasing, the income you receive from the asset. Because you receive income in return for your gift, your charitable deduction is limited to the portion of the gift that will ultimately pass to Concordia. We would be happy to discuss any of these methods with you in more detail or share sample illustrations of how a life income gift can benefit you first, then eventually Concordia.
7. Charitable gift annuity. This is a simple contract between you and Concordia that pays you a fixed dollar amount (an annuity) for your lifetime and that of another individual, if desired, based upon your age(s) at the time of your gift. The older you are, the higher the annuity. If you use appreciated property to fund the gift annuity, you will escape the capital gains tax on the gift portion of the transaction and the remaining gain will be apportioned over your lifetime. This is a wonderful way to increase income from stocks that pay small dividends and carry heavy capital gains.
8. Charitable remainder trust. A charitable remainder trust is a trust that will pay the donor (and one or more other named beneficiaries, if desired) a fixed or variable income depending on the type of trust selected. The payments are made either for life or a period of time not to exceed 20 years. The annual payments cannot be less than 5 percent of the initial fair market value of the trust. At the end of the trust's term, the balance in the trust helps support our mission.
9. Charitable lead trust. This type of charitable trust pays income to one or more charitable organizations like Concordia, typically for a period of years, and then the remaining assets of the trust pass to noncharitable beneficiaries, such as family members. While this type of trust usually does not provide a current income tax deduction, it can effectively pass property to family members at reduced estate and gift tax costs.
Other Considerations
A gift of real estate offers you the opportunity to make a significant charitable contribution with a tax-friendly outcome. There are several ways to donate real estate depending on your situation.
10. Outright gift. An outright gift may be the simplest solution if you own property that is not mortgaged, has appreciated in value and that you no longer need or use, such as a second home or vacation property. You can deduct the fair market value of your gift and avoid all capital gains taxes. Plus, you no longer have to worry about the costs of continued ownership, and you have removed that asset from your taxable estate.
11. Retained life estate. Did you know that you can transfer the deed of your personal residence or farm to Concordia now and keep the right to use the property for your lifetime and that of your spouse? You will receive a current charitable deduction in an amount that is based upon your and your spouse's life expectancy and the value of the property.
12. Bargain sale. A bargain sale can generate a gift that is less than the full fair market value of the property. In this scenario you agree to sell the property to a charitable organization like Concordia at less than its fair market value. The difference between the sale price and the fair market value is your charitable deduction. While the tax rules relating to a bargain sale are somewhat complex, the net result is often more favorable than selling the property at fair market value and making a charitable contribution from the realized capital gain.
For More Information
The array of gift-giving options and the ways you can incorporate them into your estate plan are as varied as the circumstances they serve. We are always available to provide you with further information and suggestions on gifts that fit with your lifestyle and philanthropic goals. Just give us a call.
Portions of this publication are copyright of The Stelter Company and Concordia University, St. Paul, all rights reserved. The information in this publication is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.
Nathan Laible, JD
Director of Planned Giving
Phone: 651-641-8256
Fax: 651-641-8727
E-mail: laible@csp.edu
Concordia University, St. Paul
275 North Syndicate
St. Paul, MN 55104
Web site: http://www.csp.edu/plannedgiving