Outright Gifts
Your gift of cash is available immediately for the Courage to Create campaign’s use and in most cases is 100% deductible for donors who itemize deductions. Your check should be made payable to the Montgomery 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 the donor 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 to the College 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
A donor may 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 tax advisor 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 the College.
Planned Gifts
Bequests
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
Retirement assets such as a 401(k) may be used to fund a gift. In calendar year 2009, the federal government again is allowing donors aged 70.5 or more to donate directly to Montgomery County Community College Foundation up to $100,000 from an IRA or Rollover IRA without the gift being taxed as ordinary income. (This transaction does not generate a charitable deduction.) A lifetime gift through an IRA also has positive estate tax consequences.
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 a charitable gift annuity. 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 the donor's 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.
