Cash is the simplest and most common type of charitable gift we receive. Cash gifts provide for the immediate benefit of the Foundation.
Cash gifts are deductible for taxpayers that itemize deductions. Generally, you are entitled to a deduction for the entire amount of the gift as long as all of your deductible gifts in the year do not exceed 50% of your adjusted gross income. If you cannot use the entire deduction in one year, generally you may carry it forward for up to 5 years.
Gifts of long-term appreciated securities (assets held for more than one year) are the most popular type of non-cash gift. The securities are often publicly traded stocks, but may include bonds and mutual fund shares. Because of the tax benefits, you may be able to make theses outright gifts in a more cost-efficient manner than you would by making cash gifts.
Tax Benefits of Appreciated Securities
There are definite tax advantages in giving appreciated securities. In most cases, the fair market value of the stocks, bonds, and mutual fund shares will be allowable as a charitable deduction. For example, if you give stock now worth $10,000, you can usually deduct this full amount even though you may have bought the stock for substantially less.
In addition to being able to deduct the full amount of the fair market value of securities, you avoid capital gains tax. This is another important tax reward provided by Congress to encourage gifts of appreciated securities. No matter how much the stock, bond, or mutual fund shares have appreciated in value, a charitable gift will not make any part of the appreciation taxable. This means you realize a charitable deduction even on the gains that have never been taxed.
A gift in memory or in honor of a faculty member, staff, student, Hall of Fame honoree, relative, or friend is an appropriate way to recognize a person's life and accomplishments. When an honorary or memorial gift is made, the Helias Foundation notifies the honoree or next of kin, and the gift is administered as the contributor specifies. To make an honorary gift, send a letter detailing the purpose of your gift as well as the name and address of the honoree. For memorial gifts, your letter should list the honoree's name and the name and address of his/her next of kin.
You can also give real estate as a current gift. As a current gift, the real estate donation provides you with a charitable deduction for the full fair market value of the gift. You will need to have your real estate gift appraised by an independent appraiser to determine the value of the property and your deduction. All real estate gifts are first evaluated by the Helias Foundation for acceptability and potential environmental concerns. The acceptance of all real estate gifts is at the discretion of the Helias Foundation. If you are contemplating a gift of real estate, please contact the Development staff so that they may assist in the process.
Life insurance can be a particularly versatile and valuable asset to give to charity. A gift of life insurance can allow a donor to make a more substantial contribution than would otherwise be possible. In addition, a charity owning a life insurance policy has the option of accessing the policy cash value with loans of withdrawals, or holding the policy for the death benefit.
Gift of an Existing Policy
The gift of an existing policy is relatively "painless" to donor in several respects. The transfer is simple; all that is required to complete the transfer is a change of ownership form. Absent a loan on the policy, donor does not recognize income no matter how large the gain. In addition, because a policy is not an asset generally used by donor for current income, it is not often perceived as a "loss" of an asset.
Benefit to Charity
A life insurance policy requires less administration by the charity than many other assets, like real estate or business interests. In addition, the charity can easily take advantage of cash value in the policy before the donor's death by using loans or withdrawals. Both the cash value buildup and the death are generally tax-free to the charity.
The death benefit, whether from a policy owned by the charity or with the charity as beneficiary, is received by the charity without reduction for estate or income taxes and is not subject to the delays and expenses of probate.
The information and materials contained in this section have been prepared for general informational purposes only. It is not intended to constitute legal advice or to substitute for obtaining legal advice from your attorney and may not reflect the most current legal developments. For more specific, comprehensive, and up-to-date information, or for help with particular factual situations, you should consult your tax and legal advisors.