The Nebraska Community Foundation works with community, organizational and donor-advised affiliated funds serving 250 communities located in 80 counties. NCF and its affiliated funds have reinvested $269 million in Nebraska since 1994.
There are three basic types of gifts that donors can make to your affiliated fund – outright gifts, revocable planned gifts and irrevocable planned gifts. Below we’ve provided a list and a brief explanation of various gifting techniques for each type of gift.
Outright gifts are gifts that the donor makes from his or her current income and in most cases the value of the gift is received by the affiliated fund immediately.
Cash – A gift of cash is quick, easy and eligible for income tax deductions. Cash gifts can be made by check; credit card; or electronic funds transfer, which authorizes the automatic transfer of funds each month from a checking or savings account.
Marketable Securities – A gift of publicly-traded stock, bonds or mutual fund shares. A gift of marketable securities may provide your donors with additional tax benefits, as they will not pay capital gains tax on the appreciation in the value of the securities.
Real Estate – Farm and ranch land, personal residences, and other types of real estate are gifts that can be extremely beneficial. Depending on your donor’s personal tax situation, there may be tax advantages for him or her to using real estate to make a gift.
Agricultural Commodities – Gifts of grain or livestock may provide significant income tax savings to your donors. Because the property is gifted, no revenue is recognized, and the cost of production may still be deducted as a business expense.
Download the fundraising tools for agricultural commodities.
Life Insurance – Donors can make a significant gift by establishing a life insurance policy with NCF named as the owner and your affiliated fund the beneficiary; the donor then commits to pay the annual premiums. The donor’s contributions to pay the annual premiums are tax deductible, and the eventual proceeds from the policy will help your affiliated fund carry on its work.
Revocable planned gifts are gifts that a donor can plan for now, but the donor retains the right to change or revoke the gift any time in the future.
Bequests – Charitable gifts may be made by including provisions in a donor’s will or trust document naming your affiliated fund as a recipient of a bequest. Donors may designate a percentage of assets or a specific dollar amount to be gifted from their estate.
Financial Account Payable on Death Designation – Many financial accounts, including checking and savings accounts, certificates of deposit and mutual funds, allow payable on death (P.O.D.) designations. While donors can designate your affiliated fund as the P.O.D. beneficiary, they retain the right to change or revoke the designation at any time.
Life Insurance Beneficiary Designation – Donors can name your affiliated fund as the beneficiary of a life insurance policy while retaining ownership of the policy.
Retirement Account Beneficiary Designation – Tax-deferred retirement plans, such as IRAs, 401(k) plans and 403(b) plans, may be subject to estate and income taxes, which may result in effective tax rates of up to 70%. This high tax rate and the complexity associated with distributions to another individual can be avoided by naming your affiliated fund as the beneficiary of a donor’s retirement plan. The gift is eligible for an estate tax deduction, and no income tax is paid on the earnings that accumulated tax-free during the donor’s lifetime.
Irrevocable planned gifts are future gifts with currently set plans. The difference between revocable and irrevocable planned gifts is that once a donor makes an irrevocable planned gift, the gift is permanently owned by the Nebraska Community Foundation for the benefit of an affiliated fund. Donors can not “undo” irrevocable planned gifts.
Paid-Up Life Insurance Policy – Donors can transfer ownership of a life insurance policy that no longer requires premium payments to your affiliated fund and receive a charitable income tax deduction approximately equal to the lesser of the policy’s cash value or the premiums paid.
Charitable Remainder Trust – Donors transfer appreciated assets to a trust and irrevocably name the charity as the remainder beneficiary. Donors receive income payments from the trust. The trust can be established for a term of years or for the life or lives of the income beneficiaries, and at the end of the trust term the assets come to the charity. Donors receive an immediate income tax deduction for the present value of the future gift.
Charitable Gift Annuity – With a charitable gift annuity, donors make a payment to the charity, who agrees to pay the donor and/or someone named by the donor a fixed amount of income for life (either beginning immediately or on a deferred basis). The charitable deduction is the amount of the contribution, less the value of the annuity the donor will receive.
Charitable Income Lead Trust – This type of trust allows donors to make a gift to the charity and select an end date for the term of the trust, at which time the assets are returned to the donor. The charity receives the income from the assets during the term of the trust, and donors receive an income tax deduction based upon the present value of that income stream.
More detailed information for each technique is available in the “For Donors” section of this Web site (each technique name links to the corresponding section in “For Donors.”) If you would like to discuss any of these techniques in more detail with an NCF staff member please call us at (402) 323-7330.
A $2.3 million endowment established to support entrepreneurship and people attraction in north-central Nebraska has grown to nearly $4 million. Rudolph R. Elis created a donor-advised fund in 2006 that was funded by a bequest upon his death.Read more →