What is Planned Giving?
Planned Giving is one expression of the wise use of
the personal resources God has entrusted to us.
Understanding planned giving and making it available
through your church is both a ministry to the donor (giving
the donor a means of thoughtfully transferring
resources to the next generation), and to the church
(helping the church to gather the resources necessary
for its mission and ministry.
Planned giving encompasses a variety of ways that
gifts can be made to the church from accumulated
resources. It usually involves financial or estate
planning; however, it is not reserved for the wealthy
alone. Planned giving is a means by which anyone
concerned with the wise use of his or her personal
resources makes a considered choice about their
ultimate disposition.
In general, planned gifts are made through:
Planned giving establishes a way for a donor to
provide for family members while remembering the
church as well. It often enables the donor to provide
more for his or her heirs and to make a larger gift
than thought possible. It often reduces taxes.
The Diocese has recently formed the Society of the
Magi, to recognize and thank people for making
planned gifts or current major gifts to their
congregations. Society of the Magi membership is
based on special gifts and bequests, over and above
regular pledges and giving. There is no minimum
amount for a planned gift. The amount that
constitutes a current “major” gifts is
determined by each congregation. Although $10,000 and
above is a guideline, the Society honors any gift
recommended by the leaders of a congregation.
For further information on planned giving, contact
David Buxbaum GoodShepherd@earthlink.net.
A Bequest in a Will is
perhaps the easiest and most common way of making a
planned gift, yet some 50-70% of all church members
die without a will. If you die without a will the
state will divide your assets among your spouse and
children (regardless of their age); appoint anc
administrator that may cost the estate large fees;
and appoint guardians for your minor children who may
or may not have been your choice. The state makes no
charitable contributions, and it will insure that
your estate pays as much tax as possible.
By making a will you appoint your own administrator;
you name the guardians of your minor children; you
control applicable taxes; you can create a family or
charitable trust, and you can share your resources
with your family, church or other institutions as you
choose.
A bequest in a will can take the form of a set amount
of money, a percentage of an estate, a specific
asset, a trust, or the naming of the church as a
contingent beneficiary. Sample language for including
the church in your will might be: “I give,
devise and bequeath (the dollar amount, asset or
percentage of the estate) to (name and address of
your church) to be used (describe use, if desired) or
as the church’s governing board or vestry deems
appropriate.”
A Life Income Gift provides
you an income in return. It can be established in
several ways, the most common of which include the
Church Pooled Income Fund, the Charitable Gift
Annuity, or a Charitable Remainder Trust.
In the Church Pooled Income Fund, gifts of $2,500 or
more are pooled with other gifts and invested in a
professionally managed investment portfolio. The
donor receives the following benefits:
- A guaranteed variable-rate income for life
- An immediate federal income tax deduction
- The elimination of capital gains taxes, if
funded through appreciated securities
- A possible reduction in estate taxes
The benefits of establishing a Charitable Gift
Annuity are similar to those of the Pooled Income
Fund, with the following differences:
- The income for life is guaranteed at a fixed
rate
- Some of the income received may be tax-exempt
- The minimum gift is $5,000
- This gift may be “reinsured” by a
life insurance company that will agree to pay
you an income for life and provide the church
with an immediate cash gift, representing a
small portion of the amount that would be
paid upon your death.
A Charitable Remainder Trust usually involves
larger sums of money ($100,000 or more) and is
individually managed. In other ways, it is similar to
the Pooled Income Fund and the Charitable Gift
Annuity.
Gifts of Life
Insurance are a popular and convenient way to
make a sizeable gift to the church. For example...
- You can purchase a new policy and make the
church the owner and beneficiary of the
policy. This enables you to “leverage”
your gift, ultimately making a much larger
gift than otherwise possible. Premiums become
tax-deductable.
- You can make the church the owner and
beneficiary of an existing policy. The
current value of the policy is tax
deductible, as are future premium payments.
You can make the church a contingent
beneficiary of an existing policy, i.e., name
the church to receive the proceeds of the
policy if the designated beneficiaries
predecease the insured.
- Also, you can use life insurance in
conjunction with another planned gift. For
example, you can purchase life insurance with
the income received from a life income trust,
thus replacing, and in some instances,
surpassing, the principal removed from the
estate by the gift.
A Gift of Life Estate allows you to deed your
home, vacation home, farm, ranch or condominium to
the church. Through a charitable life estate
contract, you retain the right to live on the
property and/or receive income from the property for
as long as you or your beneficiary lives. You receive
an income tax deduction when the property is deeded
to the church, avoid any capital gains taxes when
making the transfer, and your inheritance and estate
taxes may be reduced at the time of your death.
Gifts of Appreciated
Property such as securities, real estate, or
tangible personal property can be an excellent choice.
You do not pay federal capital gains taxes if the
appreciated securities or real estate are transferred
to the church. Normally, the value of the shares for
gift and tax purposes is the fair market value, not
the original purchase price. It is important to
transfer the stock or real estate to the church prior
to selling it. However, if securities or real estate
have decreased in value, you should sell the assets
before making the gift, thus establishing a capital
loss and a potential tax deduction.
Gifts of tangible property, such as jewelry, coins,
stamp collections, furniture, works of art, antiques,
automobiles, boats, etc., may be given to the church.
You are responsible for setting an appraised value on
the gift. Any gift over $5,000 must be independently
appraised.
Grateful acknowledgment is made to the Episcopal
Church Foundation for this text.
