Types of Gifts
The Community Foundation of South Alabama accepts many types of assets that may be used to start a new fund or make a contribution to an existing fund. Gifts can be contributed during your lifetime or through wills or trusts. Gifts may also be contributed in the memory of a loved one.
Cash
Gifts of cash are the most popular form of charitable gifts. Cash gifts enable you to claim a current income tax deduction of up to 50% of your adjusted gross income in the year of the gift. The deduction for cash contributions that exceed 50% may be carried forward five years to get the full deduction.
Securities
A gift of securities, such as publicly-traded stocks or bonds, can be used to open a fund or contribute to an existing fund. Appreciated securities can provide important tax advantages, as their full market value is generally deductible up to 30% of your adjusted gross income. Amounts that exceed your deduction can be carried forward for five years.
Real Estate
Gifts of real estate can be a house, commercial building, farm and land. The Foundation accepts most unencumbered real property. When you make a gift of real property you can take a charitable tax deduction for the fair market value. By donating your real estate to the Foundation you can avoid capital gains on the sale of the property. For this type of gift an appraisal, title report and environmental assessment are required.
Life Insurance
You can use life insurance policies as charitable gifts. If you name The Community Foundation of South Alabama as the owner and beneficiary of a life insurance policy, you receive an immediate tax deduction for an amount that is approximately the cash surrender value of the policy. All future premium payments you make are also tax deductible as a charitable contribution.
Mutual Funds
You can contribute mutual funds to establish a fund or add to one. Generally the tax deduction you receive will be based on the redemption value of the mutual fund.
Closely Held Securities
Non-publicly traded securities are generally shares in a privately-owned business. These securities can be contributed to the Foundation after methods of liquidation are explored. Generally you are entitled to a deduction of the appraised fair market value, up to 30% of your adjusted gross income.
Tangible Personal Property
Gifts of personal property such as artwork, jewelry, antiques and cars may be donated to the Foundation to establish a fund. These types of gifts must be reviewed individually by the Foundation before being accepted.
Bequests
The Community Foundation accepts bequests through your will or trust. This is an easy way for you to transfer assets to the Foundation and provide for your favorite charities while retaining the use of your assets during your lifetime.
Life Insurance Beneficiary
You can name the Foundation as the beneficiary of your life insurance policy and the proceeds will be used to provide support for your charitable interests after your lifetime.
Retirement Plan Beneficiary
Designating the Foundation as the beneficiary of your retirement plan or IRA is an ideal form of charitable giving. Retirement plans are the most heavily taxed of all estate assets.
Charitable Gift Annuity
A Charitable Gift Annuity is a way to make a gift to your favorite charity, and still receive an income for yourself or others. In exchange for a transfer of cash, securities or property to the Community Foundation, you and other designated individuals will receive a fixed income payment for life. You will receive an immediate tax deduction for your gift. Any remaining amount will be will be placed in a charitable endowment fund of your choice.
Charitable Remainder Trust
Your charitable gift is placed in a trust that pays an annual income to you and other beneficiaries for a specified period of time. The remaining amount of the gift is used to establish a fund of your choice the Community Foundation. You avoid capital gains tax on the donated assets and the asset is removed from your estate reducing subsequent estate taxes.
Charitable Lead Trust
You can form a Charitable Lead Trust to establish a fund at the Community Foundation. During your lifetime the income from the trust is placed in your fund for charitable purposes. When the term of the trust ends, the balance of your assets are transferred to the beneficiaries you designate in the trust. This is an excellent way to pass assets to your heirs at a reduced tax rate while making a gift to charity. Applicable estate or gift taxes on the value of the gift are greatly reduced.
Consult your professional advisor about integrating your charitable giving with financial planning. For more information contact The Community Foundation of South Alabama at 251-438-5591 or email info@communityendowment.com.