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Ways to Give
Tax-Deductible Gifts
Gifts you make to the Del Mar College Foundation are tax-deductible to the full extent allowed by current tax laws. The Foundation has 501(c)(3) tax-exempt status. Every gift from you is promptly acknowledged with an letter of appreciation/receipt, which you may use for tax purposes.
A gift may be designated or it may be made unrestricted. Unrestricted gifts may be used where the need is greatest. A gift that is designated for a particular program, department, campaign, project, or scholarship will be applied only to the area specified by the donor.
Pledges (Letter of Intent) – A pledge is a written commitment to pay a specified amount sometime in the future. It may be paid annually, quarterly or monthly over one to five years. You may establish a pledge to the Foundation in the following ways:
- completing and signing a “letter of intent” form provided by the Foundation
- writing and signing a personal letter addressed to the Del Mar College Foundation outlining the specifics of the pledge
- completing a pledge card provided by the Foundation
(Please note: The Foundation will provide a written receipt indicating the amount, designation and method of payment of the pledge. After each payment is made, a receipt will be mailed to you confirming the amount received.)
A pledge that is payable over multiple years affords you the opportunity to make a more substantial gift than might be possible if you were limited to making payment in full within a single year.
20 Ways to Support Del Mar College:
- Gifts of Cash
Cash gifts can be used to offset up to 50 percent of your adjusted gross income in the year of the gift. For people in the 28 percent tax bracket, a $10,000 cash gift can provide a direct benefit of $2,800 in the form of tax savings. The portion of the gift that exceeds 50 percent of your adjusted gross income may be carried forward for up to five additional years. Checks should be made out to the Del Mar College Foundation, Inc. with a memo on the check stating your wishes as to how the funds should be used.
- Credit Card Gifts
Donors who like the ease and convenience of making regular gifts using a credit card may make donations through their Visa or MasterCard. For many credit card owners, this is a sensible way to make sustained, regular gifts to the Foundation, receive frequent flyer miles, and other company incentives in return.
- Automatic Bank Draft
Donors wishing to make regular gifts over a sustained period of time often establish an automatic bank draft on their checking account as an easy and efficient way to give. Working with your bank, credit union, or savings organization, Foundation representatives can help you create a system for making regular gifts, which will remain in force until you elect to change it.
- Matching Gifts
The company for which you or your spouse work may have a corporate matching gifts program. The Foundation qualifies for most Matching Gifts programs. Taking advantage of this wonderful gift option through your company’s personnel benefits office may allow you to double or even triple the impact of your gifts.
Additional opportunities arise when other foundations or individual philanthropists offer the Foundation a Challenge Gift. With Challenge Gifts, the donor usually states that donations for the Foundation will be matched up to a specific amount, thereby, doubling or tripling the impact of your individual gift.
- Appreciated or Depreciated Property
Appreciated stock, stock which is held for more than one year, can make an excellent gift. Not only do you avoid capital gains taxes on the gifted amount, but you also receive a tax deduction for the full fair-market value of your gift. The full value may be used to offset up to 30 percent of your adjusted gross income. The portion of the gift that exceeds the 30 percent threshold may be carried forward for up to five additional years.
If you own an investment that has decreased in value since you have owned it, consider selling it and making a charitable gift of all or a portion of the cash proceeds. In addition to an income tax deduction for the cash contribution, this creates a loss you may be able to deduct from other taxable income. The combined amount of the deductible loss and charitable deduction could actually total more than the current value of the investment.
- Bonds, Mutual Funds
Bonds and mutual funds are similar to stocks in their tax treatment. A tax deduction for the full value of the gift is possible, if you have held the bonds or mutual funds for more than one year. Corporate, state, municipal, and U.S. Government bonds are excellent sources of gifts.
- CDs, Savings Accounts, Brokerage Accounts, and Checking Accounts with POD Provisions
POD stands for “Payable on Death.” By adding POD provisions to an existing account, you retain full ownership and full control of the account during your lifetime. At your death, the account balance is immediately paid to your named beneficiary. The Foundation can receive this benefit without going through the probate process.
- Charitable Gift Annuity
In exchange for a gift of securities, you may choose to create a qualified Charitable Gift Annuity. The Foundation will guarantee a lifetime of payments to you, you and your survivor, or another person you name. You may receive a substantial income tax deduction in the year of the gift and a portion of the payments to you may be tax-free. Upon your death, the remaining portion of the gift supports the Foundation. (Payments from an annuity and your tax deduction are based on your age and other optional factors). Qualified Charitable Gift Annuities are simple to draft and administer.
- Deferred Charitable Gift Annuity
Similar to a Charitable Gift Annuity, the Deferred Charitable Gift Annuity will provide payments to you at a future date you determine (such as when you reach retirement). Your tax deduction and annual rate of return increase if you elect to defer your payments. This is an ideal tool for many retirement plans.
- Charitable Remainder Annuity Trust
As the donor, you may select the rate of return from the Charitable Remainder Annuity Trust which will provide a fixed annual payment for your life or the life of another person you designate. Alternatively, should you choose a term of years to receive this annuity, not to exceed 20 years. You may avoid capital gain taxes and may receive a tax deduction based on your age and your selected rate of return. These trusts can be drafted to take effect during your life or at your death (to benefit your family or others).
- Charitable Remainder Unitrust
Similar to Charitable Remainder Annuity Trusts, the Unitrust provides payments to the donor based on a set percentage of the value of the assets as re-valued every January 1 st. The Unitrust can be drafted to allow gifts of tangible property which may need to be sold by the trust over a period of time.
- Charitable Lead Trusts
In a Charitable Lead Trusts, assets (cash or securities) are transferred to a trust, which pays an annual income to support the Foundation for the number of years you designate. At the end of this designated time, the trust terminates and the assets are given back to the persons you name. The assets can be transferred back to you, in which case the trust is known as a Grantor Lead Trust. The assets can also be transferred to someone else (usually a family member), in which case the trust is know as a Non-Grantor Lead Trust. While the grantor lead trust does provide the donor with a charitable income tax deduction, the non-grantor lead trust does provide a gift or estate tax charitable deduction depending on when it is created.
- Bequest Through Your Will
One of the simplest ways to give is through your estate. You can make a gift bequest in your will to the Foundation for a specific dollar amount, a percentage of your estate, or the remainder of your estate after you have provided for others.
- Revocable Trusts
A Revocable Trust can be used to produce a probable gift. Like a pledge or bequest through your will, a trust of this nature can be changed as you so choose. A Revocable Trust provides you with income now as well as the right to retrieve your asset(s) from the trust, if necessary. You, as the trust owner, may choose to set aside a future gift to be given following your lifetime or the term of the trust. Because ownership of the asset is not surrendered, this type of trust does not allow an income tax deduction. However, a Revocable Trust ultimately left to charity can provide substantial savings in federal estate taxes.
- Life Insurance
You can make a significant life insurance gift by naming the Foundation as a beneficiary of all, or a portion, of the proceeds of an existing policy. With this method of giving, a major gift may be made with only a modest annual payment.
- Retirement Accounts
Retirement account funds, whether individual retirement accounts or employee’s company plans, may be given to the Foundation by a simple beneficiary designation. Because a gift from one of these plans during your lifetime would trigger an income tax liability for you, and because these plans operate outside of your will, this gift is best made through a beneficiary designation with your company or individual plan which becomes effective after your death, similar to a bequest in your will.
- Unrelated Use/Personal Property
Gifts of tangible personal property are always welcome. Charitable tax deductions are available in the year in which your gift is given and for up to five more tax years in order that a deduction may be fully used. For gifts which exceed $5,000 in value, the Internal Revenue Service requires the donor to provide a “qualified appraisal” to substantiate the deduction. The Foundation staff can help guide you in the process of giving personal property that is not related to the Foundation’s charitable exempt status.
- Related Use Gifts-in-Kind
Many gifts of goods or services are readily accepted by the Foundation. In-kind gifts enable you to be a part of the mission and help meet specific College and Foundation needs. The Foundation staff will be happy to help you determine the availability of potential income tax deductions for gifts given in-kind.
- Real Estate
One of the most overlooked methods of giving involves gifts of real estate. The Foundation officers can discuss the possible gift of land, a home, or a vacation home.
In most cases, you will receive a tax deduction based on the full fair-market value of the gift while avoiding capital gains tax.
- Remainder Interest Gifts
You may receive a substantial income tax deduction by giving (deeding) your home or other real estate to the Foundation now while retaining a Life Estate in the property allowing you to continue to reside and maintain the property as usual. You may even receive any income the property may generate such as rent, lease, production payments, or royalties. Upon your death, the Foundation will receive that property.
CREATIVE COMBINATIONS
Depending upon your unique financial planning and gift objectives, you may use one or several giving ideas in combination to achieve your charitable goals. The Foundation Office will be happy to work with you and your professional advisors to explain the benefits of each of the plans listed and how they can work for you.
Charitable income tax deductions are subject to limitations determined by the level of your adjusted gross income and the type of asset given. Please review your particular situation with a Foundation representative and your tax advisor to determine how your circumstances relate to these limits.
| Neither the author nor publisher of this document, nor this organization is engaged in rendering legal or tax advisory services. For advice and assistance in your specific case, you should obtain the services of a qualified attorney or other professional advisor. The purpose of this publication is to provide accurate information of a general nature only. Tax revisions occur often, as do changes in state laws, which govern wills, trusts, and charitable gifts. Please seek advice from your legal and tax advisor when considering these types of contracts. A Del Mar College Foundation, Inc. representative is available to help serve as an advocate and liaison for you in these matters. |
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