Butler County Health Foundation was chartered in December 1992. It was structured to serve as the philanthropic resource for health care in Butler County. The Foundation financially assists in construction projects and equipment upgrades for Butler County Health. The Foundation also provides financial assistance for education in health care professions, the recruitment of health care personnel and community and preventive health education.
Cash Gift: The most common way to make an immediate gift is by writing a check. This type of cash gift provides immediate liquidity for charity and generates a charitable income tax deduction for the donor in the year of the gift.
Stocks & Bonds: Giving stocks or bonds may provide greater tax benefits. Securities owned for more than one year avoid capital gain tax if fair market value has increased since purchased. A charitable income tax deduction equal to the fair market value is received.
Grain Commodities: A gift of grain commodities, such as corn or soybeans, can also be used as a gifting opportunity. By signing over a certain cash amount or bushel amount to the charity, not only is a charitable gift created but also a substantial income tax deduction.
Real Estate: A gift of real estate that has been held for more than a year also has the advantage of providing current fair market value, as well as bypassing capital gains tax on the appreciation.
Life Insurance: The gift of a paid-up life insurance policy is advantageous. By designating a qualified charity as owner and beneficiary, a charitable income tax deduction is received that is equal to the cost basis in the policy (in most cases).
Bequest Through An Estate: A bequest through an estate will benefit the Foundation at some point in the future while ensuring legacy and charitable wishes. A charitable bequest is a bequest written in a will or trust that directs a gift to be made to Future Generations Health Care Foundation upon death. A charitable bequest can also help save on estate taxes by providing an estate with a charitable deduction for the value of the gift. With careful planning, paying income taxes on the assets received from an estate can be avoided.
A bequest may be made in several ways:
- Gift of a percentage of an estate
- Gift of a specific asset
- Gift of the residue of an estate
- Gift of a specific dollar amount
There are also certain types of property that pass outside of a will or trust. These assets require a beneficiary to be made. A couple of examples of these are an IRA account and an insurance policy. By designating Future Generations Health Care Foundation as the beneficiary of part or all of an IRA, the full value of the gift is transferred tax-free upon death and the estate receives a charitable deduction. By designating Future Generations Health Care Foundation as the beneficiary of an insurance policy, an estate avoids paying tax on the value of the policy and receives a charitable deduction for the gift.
Gifts that Generate Income for the Donor
Gift Annuity: The Gift Annuity is a great example of how a gift generates income for the donor. This is actually a contract between a donor and a charity that is part gift and part annuity. In addition to the annuity payment, the donor receives a charitable income tax deduction and a portion of each annuity payment may be tax-free.
For example, Mrs. Smith, age 80, has a $10,000 CD coming due next month. By setting up a $10,000 gift annuity, Mrs. Smith will receive an annual income of $720 (8%). $594.72 of that annual income will be tax free and Mrs. Smith will receive an income tax charitable deduction of $4,649. Taking into account Mrs. Smith’s charitable deduction tax savings and the tax-free portion of the income, her effective rate would be 10.4%.
Deferred Payment Gift Annuity: The Deferred Payment Gift Annuity, in which annuity payments are delayed for a number of years, offers rates that make it an attractive supplement to retirement income. For example, Mr. and Mrs. Smith, both 50 years of age, invested $20,000 in stock several years ago that is now worth $100,000. They are receiving dividends of about 2% or $2,000 each year. If the Smith’s transferred the stock to Future Generations Health Care Foundation and the Foundation sold the stock, a deferred gift annuity would be created and a portion of the capital gain tax would be bypassed. Once either of the couple reached the age of 65, annuity payments of $6,460 each year would be paid to them until the last of the annuitant was deceased. Mr. and Mrs. Smith would have a potential income tax savings of $5,084.
For more information on how to direct a financial gift to Future Generations Health Care Foundation, please contact Ed Meysenburg, Foundation Director at 402-367-1370 or email@example.com.