Planned Giving encompasses a variety of ways in which gifts can be made to the church from accumulated resources. It usually involves financial or estate planning; however, it is not reserved only for the wealthy. 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:
- A bequest in a will
- A life income gift, such as a charitable gift annuity or a charitable remainder trust
- Life insurance
- A life estate, such as a gift of a home, farm or ranch
- Appreciated property, such as real estate or securities
These types of considerations will establish a way for a donor to provide for family members while remembering the church and its mission and programs for years to come. It often enables the donor to provide more for his or her heirs and to make a larger gift than thought possible and in many instances reduces taxes. Planned Gifts may be designated or restricted for the church's general fund or for its endowment. Planned Gifts are either outright gifts e.g., gifts of appreciated securities, real property, personal property, etc. or deferred gifts, e.g., charitable gift annuities, charitable remainder trusts, life insurance or bequests in a will.
A Typical Program For Your Parish
A representative of Episcopal Charities, working with clergy and lay leaders, will come to your parish to explain how a planned giving program could benefit your congregation. Activities might include a 30 minute workshop with your vestry, a presentation to an adult forum, or a talk or sermon given during a worship service. A successful approach is the formation of a Planned Giving Committee where a small group of committed members comes together to plan a series of one hour workshops or programs to focus on estate planning. A trusts and estates attorney would explain the importance of having a will, trust agreements, guardianships, living wills, advanced medical directives and powers’ of attorney.
There are a number of planned giving or charitable vehicles available to help your parish honor the past, sustain the present and nurture the future. These are:
A Bequest in a Will:
Perhaps the easiest way of making a planned gift is through your will. Yet some 50 to 70% of all church members die without a will. 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, your 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 to a life insurance policy.
Life Income Gifts:
Life income gifts provide you or a designated beneficiary an income for life in exchange for your gift. They can be established in several ways, the most common of which includes a charitable gift annuity or a charitable remainder trust.
Charitable gift annuity:
- Guarantees income for life at a fixed rate;
- Allows a portion of the gift to be deductible from income taxes;
- And, allows some of the income received to be tax exempt.
Charitable Remainder Trust:
- Usually involves larger sums of money, typically $100,000 or more;
- Is individually managed and like the charitable gift annuity a charitable remainder trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes.
- Can be added to over the years and a portion of the trust can be set aside for growth as a hedge of inflation. The rate of return fluctuates based upon the performance of the portfolio;
- And, can be established with the donor choosing a trustee which can include individuals, local banks or institutions such as the diocese or Episcopal Charities.
Gifts of Life Insurance:
- Purchase a new policy and make the church the owner and beneficiary of the policy;
- Contribute to the church to pay the ongoing premiums become tax deductible;
- 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;
- And, make the church a contingent beneficiary of an existing policy or for example, name the church to receive the proceeds of the policy if the designated beneficiaries predecease the insured.
A Gift of Life Estate:
Another way of making a planned gift is deeding your home, your vacation home, condominium, farm, ranch to the church. Through a charitable life estate contract, you retain the right to live in 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, and avoid any capital gains taxes when making the transfer. And your inheritance and estate taxes may be reduced by the time of your death. At the time of your death the church will typically sell the property and transfer the proceeds at the discretion of the vestry.
Gifts of Appreciated Property:
Securities, real estate, or other tangible personal property can be an excellent means of making a gift to the church.
- 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 Personal Property
Gifts of tangible personal property such as jewelry, coins, stamp collections, furniture, works of art, antiques, automobile, boats, etc., may be given to the church. You are responsible for setting an appraised value for the gift. Any gift over $5,000 must be independently appraised.
What we do with what we have expresses what we believe. We know that is true in our daily life yet we easily forget that a will disposing of our earthly goods at the end of our life also conveys our deepest commitments. Many former parishioners have gone before us and a commitment that we make to the ministries of our church and a vision of an on-going witness to God's love is a compelling message for us to pledge financial support to our parish. Gifts small and large can be a great occasion for joy and celebration.