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1. What are the three kinds of gifts I can
give to the Foundation?
Generally speaking, during your lifetime you can make an outright
gift of cash, securities
or other property (e.g., real estate,
personal property) to an endowment
fund or donor advised fund.
Upon your death you can make a gift through your will or with a distribution from a retirement plan or life insurance policy.
You also have the option of making a gift that returns lifetime income to you, your spouse, or other individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.
2. What sort of assets can I use to make a gift?
Almost anything: cash, publicly traded
securities, life
insurance, the balance of your retirement
account. Other assets can be very valuable but are more complicated
to administer and must be reviewed by us before we can accept them
as gifts: real estate and closely held stock.
3. What tax deduction will I receive for my gift?
It depends on the form your gift takes:
- Outright gifts to an endowment
fund or donor advised
fund generate a full income-tax charitable deduction. Outright
gifts of appreciated securities are deductible at fair market
value, with no recognition of capital gains – a great tax
benefit!
- Bequests do
not generate a lifetime income tax deduction. They are exempt
from estate tax, however.
- Similarly, life
insurance distributions to the Foundation are not income-tax
deductible, but are exempt from estate tax. If you have made us
the irrevocable owner and beneficiary of a policy during your
lifetime, you may deduct annual gifts that offset premium payments
(for more details on this point, see Question 5 below).
- The charitable deduction for a gift that returns
income to you, such as a charitable gift annuity or a charitable
remainder trust is the fair market value of the gift asset minus
the present value of the income interest you retain.
4. Can the Foundation serve as the Executor
of my estate?
State law, the limitations of our corporate powers, and our
internal policies prevent us from taking such a role in your affairs.
Foundation policy does permit the Foundation president or trust
counsel to serve as Executor if a donor's entire estate is bequeathed
to the Foundation.
5. I want to purchase a life insurance policy,
name the Foundation as beneficiary, but retain ownership of the
policy. Can I deduct the premium payments I make?
No. The IRS would not consider that a "completed gift" – they'd say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. The Foundation must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
6. Can I transfer my IRA to the Foundation
to set up a life-income gift, and avoid income tax on the transfer?
Under present law, any lifetime distributions from an IRA are
included in your taxable income, even if these funds are transferred
to us. You do, however, receive a current charitable deduction when
you establish a life income gift, which would partially offset the
amount included in your taxable income. Proposed legislation would
make the transfer tax-free, however. Watch our Website for updates.
7. I'm interested in establishing a charitable
gift annuity. What financial provisions will you make for the income
payments to me and my husband?
Your charitable gift annuity will be treated as a general obligation
of the Foundation and it is backed by the financial resources of
the Baptist cause that will ultimately benefit from your gift. We
have an unbroken record in making timely payments to our annuitants,
and that ongoing responsibility is a key element in our financial
policies.
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