The Art Barn
Ways of Giving
Outright Gifts
A gift of cash is available immediately for the campaign’s use and in most cases is 100% deductible for donors who itemize deductions. Your check should be made payable to theMontgomery County Community College Foundation.
Gifts of Securities
Increasingly, donors are using appreciated securities – including publicly traded and privately held stock and mutual funds – to make gifts to Montgomery County Community College. The attraction of this method of giving is that the donor is entitled to take a charitable deduction for the full current value of appreciated securities held longer than one year and is able to avoid paying the capital gains tax that would be due if thedonor sold the securities.
Gifts of Real Estate
Real estate, such as a piece of land, a house or a farm, may be given outright, in which case Montgomery County Community College Foundation will sell the property and use the proceeds for purposes designated by the donor. Any appreciated value is not usually subject to federal capital gains tax, and a substantial charitable deduction may be claimed.
- Gifts with retained income. The donor uses the value of real estate to fund a trust.
- Live-at-home gift. The donor transfers the ownership of his/her personal residence but retains the right to use the property for life.
- Gift of partial interest. The donor gives a percentage of interest, and the organization receives a proportionate share of the proceeds when the property is sold.
Gifts-in-Kind
It is possible for a donor to give tangible property, such as books, furniture, artwork and jewelry, to the organization. In most cases, the organization will choose to sell the property or item. There are federal income tax guidelines regarding gifts of tangible property, so it is very important to consult with a taxadvisor before choosing to give an object of substantial value to the organization. In-kind services may also be of value to the campaign, and we encourage you to discuss such options with College representatives.
Planned Gifts
Bequest
A donor leaves a specific amount, a specific percentage of the full estate or the entire estate to the Montgomery County Community College Foundation. A residuary bequest means that a donor gives the residue of the estate after other specific bequests are made to the organization. A contingent bequest means that the donor makes the gift dependent on certain events.
Gifts of Life Insurance
A donor may name the organization as one of the beneficiaries or the sole beneficiary of a life insurance policy. A donor may also transfer ownership of a policy to the organization. In the case of ownership transfer and/or sole beneficiary status, the policy’s face value is removed from the donor’s taxable estate. Also, future premiums paid on the policy by the donor can be treated as charitable gifts, and if the policy has a cash value, the donor can take an immediate tax deduction.
IRA and Other Retirement Assets
A donor may name the Montgomery County Community College Foundation as the beneficiary of an IRA, 401(k) or other qualified retirement plan. Any residual in the plan at the donor’s death passes to the Foundation tax-free, and the value of the gift can be counted toward the Campaign. This allows a donor to avoid both income and estate taxes being levied on the residual value of a retirement account, and the donor can continue to make withdrawals during his or her lifetime.
Charitable Remainder Trust
The donor may give a specific amount that is placed in a trust managed by a financial institution. The donor gives up control of the funds but retains a life income interest in the funds. When the donor and other beneficiaries die, the remainder of the funds is given to the organization. This trust may take effect while a donor is still living (inter vivos charitable trust) or may be treated by the donor’s will (testamentary charitable trust). The following are the types of charitable remainder trusts:
- Unitrust. Federal law requires that a fixed percentage of the trust’s assets be paid to the donor (or beneficiaries) as income each year. In the case of unitrusts, the percentage is based on the current market value of the assets, so the income can vary.
- Annuity trust. The annual income payment is set as a percentage of the assets when the trust is established, and annual payments never change.
Charitable Gift Annuity
The donor names the College as the beneficiary of the remainder value of an annuity, established between the donor and an issuing organization. The issuing organization is obligated to pay the donor or other designated beneficiaries a fixed sum annually for life.
A deferred payment gift annuity is a variation of this type of gift. Here annuity payments do not begin until a specified number of years after the gift is made, allowing a donor to take an immediate tax deduction, perhaps while in a high tax bracket. The income from the annuity payments is postponed until it is really needed, perhaps after retirement.
Charitable Lead Trust
This is a reversionary trust. The donor transfers a specified amount that is placed in a trust for a specific period. During that time, the organization receives the income, and when the trust ends, the principal reverts to the donor. Usually, the donor is not taxed on the income that goes to the organization during the life of the trust.
