Ways to make a major gift to St. John Health
The following items briefly describe various planning tools frequently used to make a major charitable gift:
Cash- Cash is a preferred form of payment for pledges and donors are encouraged to make pledges for campaigns. Pledging a gift over a five-year period may allow for a more substantial gift and the most beneficial tax treatment.
Marketable Securities -Marketable Securities may be donated instead of cash to fund a major gift. The after tax cost is less than a cash donation if the securities have appreciated in value, because capital gain is not taxed upon transfer to the charity.
Real Estate - Real Estate is sometimes overlooked but can be used effectively to fund a major gift. Residential, commercial or agricultural property may be contributed outright to charity or through various charitable trust arrangements.
Bargain Sale - A Bargain Sale of real property is another option. Real property may be sold to the charity at a 50% discount and then liquidated by the charity to provide funds for the campaign. The gift discount portion is deductible and the bargain sale proceeds can be paid to the donor in a lump sum or installments to provide an income stream.
Current Gift + Lifetime Bequest Pledge- Donors age 65 and older are good candidates for making a gift of cash or property now combined with a larger pledge of a gift from their estate. The combined gifts could secure a notable campaign gift naming opportunity equal to the present value of the current gift plus the binding estate pledge.
Donor Advised Fund - Donor Advised Funds are often created with a community foundation or major investment broker to function like a “charitable bank account” through which a donor can direct gifts to public charities. A donor advised fund is often funded with a large deductible gift in one year, while gifts to public charities are made over a period of years.
Private Foundation - Private Family Foundations are established to create a tax-leveraged philanthropic legacy. They have the added advantage that the donor and family members on the family foundation board can invest and control the assets placed in the foundation, subject to certain limitations.
Charitable Lead Trust - Charitable Lead Trustarrangements are highly effective for avoiding or reducing the estate tax on assets transferred to family members, while also providing current gifts to charity for several years.
Family Business Stock - Stockin a family business can be donated to charity and later redeemed or repurchased by the family corporation. This makes it possible to use corporate dollars to fund a major gift from the individual donor. Likewise, tax advisors often include a charitable gift of family business stock when transferring the business to family members or when selling it.
IRAs - The Pension Protection Act of 2006 permitted tax-free IRA distributions to charity of up to $100,000/ year if age 70½ or older, but just for gifts in 2006 and 2007. The distribution is not included in the donor’s income but counts toward the required minimum distribution. Since it is not taxable income, it does not impact any other deductions or limitations on the tax return. IRA checks must be made payable to “St. John Health Foundation.” Note: Congress is currently working to extend the Pension Protection Act for 2008. Please call Heidi Crisman at 586-582-7532 if you are interested in making a gift from your IRA.
For information on making a planned gift to a St. John Health entity, please call Heidi Crisman,
586-582-7532.
