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Planned Giving Opportunities
What to Give
The Foundation provides donors with a variety
of options to satisfy their charitable giving.
From simple cash donations to complex planned
giving, the variety of assets we accept are as follows: The Foundation accepts outright gifts in the form of cash, checks, credit card charges and electronic transfers in any amount (unless, as with all gifts, there is a question as to the donor’s title to the assets or mental competence to make a gift). All gifts must be paid or made payable to the Foundation and not to any employee, agent or volunteer for the credit of the Foundation. The Foundation accepts Visa, Mastercard and American Express credit cards. The Foundation accepts publicly-traded securities and will make all decisions regarding the disposition or retention of such gifts. Such gifts will generally be sold as soon as possible and the fund, designated by the donor, will be credited with the proceeds from the sale less any commissions and expenses. The value of a gift of securities is the market value at the time of the gift, less estimated or actual commissions and expenses. A gift of stock is completed when an endorsed stock certificate is delivered to the Foundation or when the security is received in the Foundation’s brokerage account. The donor must provide copies of shareholder buy/sell agreements and prepare the documents necessary to transfer the stock to the Foundation. In order for the donor to avoid having the IRS view said gift as a taxable event, there must not be any formal agreement that the Foundation is required to redeem the stock upon receipt. Charities are eligible to own "S" corporation stock directly; charitable remainder trusts, however, are not so eligible. Unlike many sellers of closely-held stock, the Foundation will not execute indemnification agreements and will not participate in the issuance of warranties and representations. Although restricted stock may be publicly-traded and may have a readily available market price, restrictions on its sale by timing and number of shares may impact its fair market value. Restricted stock must be held for at least two (2) years from the date of acquisition. The Foundation’s holding period includes the donor’s holding period. In addition, sales made by the donor and the Foundation are aggregated. If the donor agrees, for a limited time, to refrain from selling his/her shares, then some or all of the donated shares may be "unrestricted". The SEC and any exchange on which the shares are traded must be notified of sales of restricted stock. The donor must: (1) provide copies of stock option agreements showing the donor's right to receive the options, whether or not they are transferable and the type of options held and (2) prepare the documents necessary to transfer the options to the Foundation. The Foundation accepts gifts in the form of promissory notes or mortgages. General and Limited Partnership Interests The Foundation prefers to accept interests in passive, investment-type partnerships such as those holding real estate, stocks and bonds, rather than interests in partnerships that are actively engaged in for-profit businesses. If the partnership business is unrelated to the Foundation’s tax-exempt purpose, then the income will be treated as Unrelated Business Income (“UBI”) to the Foundation. If the partnership business is a tax shelter that has reached the “crossover” point where the taxable income exceeds the cash distributions, then the Foundation will be required to make a cash outlay to cover the tax liability. A gift of a general partnership interest can expose the Foundation to liability for partnership debts, negligence on the part of other partners, hazardous waste cleanup costs, etc. If a gift of a family limited partnership is proposed, then the Foundation may take steps to assure that the gift is not merely a tax accommodation for the donor. If the donor's share or partnership liabilities exceed his/her tax basis, then a charitable gift of his/her interest may cause him/her recognition of taxable income. The Foundation may request: copies of the current partnership agreement, tax returns for the past three years (including Form 1065 and Schedule K-1), a description of the partnership activities and/or investments (including financial documents describing the assets), the instrument that will transfer ownership to the Foundation and an agreement for payment of liabilities, expenses and capital contributions. An income beneficiary of a trust may assign all or part of his/her interest income to the Foundation. He/she will be entitled to a charitable deduction in the amount of the present value of the future payments. Patents, Copyrights and Other Intellectual Property The donor of a patent or copyright must provide a copy of the patent documentation or copyright agreement and proposed assignment. As with all gifts, they will be valued and reported in accordance with then current law and regulations. Tangible personal property is any property, other than land or permanently attached buildings, which can be seen or touched. Examples are: automobiles, coins, gold bullion, livestock, farm equipment, inventory, boats, books, manuscripts, artwork and antiques. If the Foundation accepts such property with the intent to sell, then the donor will be permitted a deduction of the lesser of his/her cost basis in the property or the property’s fair market value. If, instead, the Foundation retains the property to further its mission, then the donor may be permitted to deduct the property’s fair market value. The gift of a manuscript or artwork will have different tax consequences for the donor depending on whether the donor created the work and how the donor acquired the work. Note that the 2004 JOBS Act added new restrictions and reporting requirements. U.S. Savings Bonds and State of Israel Bonds U.S. law prohibits lifetime transfers of savings bonds. However, U.S. law permits gifts of savings bonds by bequest. Thus, a donor who wishes to transfer savings bonds may transfer them by specific bequest in his/her will. A specific bequest of savings bonds to a charity will shift the built-in income to that charity without adverse tax consequences to the donor's estate. The Foundation will accept State of Israel Bonds as charitable gifts to endowment funds and will acknowledge such gifts on the date of assignment. If the Israel Bond has matured for a period of at least three (3) years, then the Foundation will provide the donor with an assignment form to transfer ownership to the Foundation. Bequests through Wills and Trusts The most common form of estate provision is a bequest made in a will or trust. A bequest may be for a specified sum of money, for a percentage of the value of a residuary estate, to the Foundation for furtherance of its mission, or to the Foundation for a specific purpose. Although a donor may make a bequest to the Foundation, the donor retains complete control during his/her lifetime and the gift remains revocable until the donor’s death. To secure future revenue, the Foundation may: (1) solicit bequests in wills or trusts, (2) identify and steward donors who have established estate provisions and determine their intent for the use of their gifts and (3) manage the process of estate settlement so that the Foundation can benefit from the gifts in a timely manner. Generally, the Foundation will not accept appointment as Executor of a donor’s will. The Foundation would appreciate receiving a copy of any document that names the Foundation as a beneficiary. The Director, or his/her designee, is authorized to submit routine claims to probate proceedings and otherwise cooperate in the collection of bequests. The Foundation will not initiate or voluntarily participate in contested claims or other litigation to collect putative gifts, unless it has specific Board approval. Retirement plans often impose significant tax burdens on one’s heirs. Retirement plans such as Qualified Pension Plans, Individual Retirement Accounts (IRAs), Self-Employed (HR 10) Plans and Deferred Compensation Plans can be advantageous vehicles for endowing a charitable legacy to the community. The Foundation accepts gifts of retirement plans. If a donor wishes to designate the Foundation as a beneficiary, then the donor must execute a retirement plan beneficiary designation form with his/her plan administrator. Life Insurance Policies and Commercial Annuities The Foundation will accept life insurance policies and commercial annuities as gifts only when the Foundation is designated as owner and/or beneficiary of the policy or annuity contract. If a donor does so designate the Foundation, then the donor has made an irrevocable gift. In order to complete the gift, the donor must deliver the original policy and/or a fully executed owner and beneficiary designation form. A gift of an insurance policy will provide the donor with a tax deduction being generally the lesser of the cash surrender value or the premiums paid to date. A gift of an annuity contract will cause the donor to be taxed immediately on any deferred income in the annuity contract. The tax consequences depend on the type of annuity contract and the date on which it was executed. Group term or individual policies where a donor designates the Foundation as beneficiary but retains all incidents of ownership are not completed gifts. These gifts will be treated in the same manner as bequests, retirement plan designations and other gifts over which the donor retains control during his/her lifetime. The Foundation does not participate in charitable split dollar insurance plans. With respect to partially paid-up policies, the donor may be required to provide all relevant policy information including: (1) a description of the type of policy; (2) the face value of the policy; (3) a premium payment schedule; (4) the age of the insured; and (5) a fully executed Declaration of Intent regarding the payment of premiums. The Director will maintain all policy information, send annual reminders of premiums due and notify each donor if premiums are not paid within thirty (30) days following their due date. If premiums remain in arrears, then the Foundation may choose to surrender the policy and donate the proceeds to a charitable fund selected by the donor or Board. Contributions for premium payments made by the donor to the Foundation may be considered charitable gifts. The Real Estate Committee will review gifts involving real estate or interests in real estate and consider the legal, financial and tax consequences of such gifts to the Foundation. Generally, the Foundation will dispose of gifts of real property at the earliest possible time. Thus, transactions should be structured so that the Foundation has the maximum flexibility for prompt sales. The Foundation may ask the donor to create a trust on behalf of the Foundation which would hold the property until its sale and, after the sale has been completed, designate the Foundation as successor trustee. The Foundation may create, or ask the donor to create, a supporting foundation to hold and manage the property. A prospective donor may be required to provide the following at his/her expense: 1. a description of its current use; 2. a description of its physical condition (including engineering or other inspection reports; any governmental reports, citations or correspondence concerning compliance or violation of applicable laws and regulations; the condition of the basement, the roof and the sump pump; the type and condition of the foundation; soil stability; the condition of the electricity, plumbing, sewage, water supply and HVAC); 3. the likelihood of an immediate sale; 4. a qualified, independent appraisal indicating current market value and assessed value; 5. a schedule of carrying costs, including insurance, utilities, property taxes and assessments for the prior two years, together with copies of current insurance policies and premium payment receipts, utility bills, property tax receipts and bills; 6. a statement of the estimated transfer taxes payable upon sale; 7. the anticipated cash flow, including the most recent two years’ profit/loss statements; 8. a description of the ingress and egress to and use of the property, including restrictions, zoning, reservations, rights-of-way, easements or other limitations (whether existing or reasonably contemplated); 9. the marketability of any secured interest, the likelihood of payment of principal and interest and comparable rates of return for comparable terms offered for comparable risks; 10. a copy of the deed, including legal description and street address; 11. a current survey showing all structures, easements and encumbrances; 12. the condition and clarity of title, and a copy of the most recent owner’s title insurance policy and title search, showing all liens, notes, mortgages and encumbrances; 13. a current Phase I environmental audit report, including a full title history of the property, reflecting prior and current uses; a site inspection and environmental assessment (including asbestos, lead paint, termites/ants/pests, radon, formaldehyde insulation, mold, PCBs, flood plain/wetlands, endangered plants, wildlife, etc.); site tests and sampling; copies of all prior environmental reports; and a description of use of surrounding property with specific disclosure of any storage tanks (below and above ground) or other potential environmental factors; 14. if undeveloped, whether there are any controls against unauthorized access and the condition of such controls; 15. certified copies of all records which show the donor’s original cost and holding period, adjustment to basis, depreciation claimed and recognition of gain on the transfer of property; 16. copies of all leases and all relevant information concerning leases, including square footage, types of uses, dates of renewals and expirations, length of terms, base rents and other charges, etc.; 17. copies of contracts, contemplated or anticipated condemnations, or any other actions or agreements which may affect the property (whether or not disclosed elsewhere); 18. copies of all mortgages and all relevant information concerning mortgages, including name(s) of lending institution(s), loan number(s), date(s) of loan, term, due date, original principal amount and current principal balance, monthly payment, interest rate, balloon provision, escrow requirements, whether the loan is assumable or transferable, etc.; 19. whether the property is “dealer” property (such as lots in a subdivision); and 20. any correspondence with governmental authorities, prospective purchasers, tenants or others, which reasonably would affect the Foundation’s investment decision. Certificate of Representation, Warranty and Indemnity The Real Estate Committee may ask the donor to execute a Certificate of Representation, Warranty and Indemnity. Said representations and warranties may include the following: (1) compliance with all applicable environmental laws, regulations and court or administrative orders; and (2) no actual or imputed knowledge (except as otherwise disclosed) of (a) any pending or administrative actions relating to the property, including any which may reflect environmental impairment and (b) any area of the property where hazardous or toxic substances or conditions have been released, disposed of or found. Said indemnity may warrant the accuracy of the aforementioned representations and defend and hold harmless the Foundation from any costs, expenses or liability arising out of or in connection with any claim of environmental impairment of the property, whether or not said impairment occurred during the period of time in which donor owned the property. Real Estate Transfers and Interests The Foundation accepts gifts of time-share units, real estate investment trusts and oil, gas or mineral interests. The Foundation accepts gifts of real property only when transferred by warranty deed (or its equivalent). The Foundation may transfer real property by warranty or quitclaim deed. Bargain Sales (including mortgaged property) A gift of property subject to a mortgage may trigger “bargain sale” rules because it may be treated as if the property were sold for the amount of the outstanding mortgage. If there is debt on the property, then the debt ratio must be less than 50% of the appraised market value of the property. If the Foundation intends to sell property obtained through a bargain sale, then it must determine whether the property is saleable within 12 months. The donor may be able to avoid the bargain sale rules by executing a "hold harmless" agreement in favor of the Foundation; otherwise, a bargain sale is treated for tax purposes as part sale and part gift. Retained Life Estates When a donor gives real property with a retained life estate, the Foundation takes title to the property and, for the duration of the donor’s life, the donor retains use and possession of the property (i.e., a personal residence or farm). The donor or other occupants may occupy the residence or operate the farm without disruption for the duration of the donor’s life. Thereafter, the Foundation will sell the residence or farm. A retained life estate is an option for a donor who would otherwise transfer such property to the Foundation at death. When title (not use and possession) transfers, the donor will be entitled to a tax deduction for the value of the remainder interest based on his/her life expectancy and the value of the property. During his/her lifetime, the donor (rather than the Foundation) will be required to pay mortgages, real estate taxes, utilities, maintenance and insurance. The donor must promise in writing not to commit waste, permit liens to be placed on the property or obligate the Foundation to his/her creditors. |
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