FWCF: How to Give: Ways to Give

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"Connecting the community's charitable givers with needs in the community."

Fort Wayne Community Foundation has served the people of Allen County, Indiana, for almost 50 years. The Foundation accepts gifts, both large and small, from donors, invests the assets, and awards grants to nonprofit organizations and scholarships to students currently totaling over $7 million
a year.

Ways to Give

The basic appeal of the Community Foundation to donors is flexibility. There are a variety of tax-effective ways to give gifts and donors can choose how their charitable gifts will be used. The Foundation can be a shield of anonymity or the spotlight that shines on a special cause. Each method of giving benefits from the most favorable tax treatment the law allows for contributions.

Establish a Fund
You can establish a Fund by contributing any asset including:

Cash - is the easiest way to contribute and may qualify for maximum allowable income tax deductions.

Marketable or Closely-held Securities - if securities are highly appreciated, they may be given so the donor can deduct the full fair market value as a charitable contribution and thus avoid capital gains tax on the appreciation.

Real Estate - may also be given at appraised value so the donor can receive a full charitable deduction and avoid capital gains taxes.

Life Insurance - can be used to create a major gift at relatively low cost to the donor. If the Community Foundation is named owner or beneficiary of a new or existing policy, the donor receives a tax deduction. Additional premiums paid through the Foundation are tax deductible, and proceeds pass to charity, free of estate tax.

Include the Foundation in Your Will or Living Trust - A bequest of cash, securities or real property can significantly reduce the taxes otherwise payable by your estate. Your heirs benefit and the Fund continues your good work in your name permanently, a living symbol of your care and concern for others.

Transfer an Existing Private Foundation - Administering a private foundation under IRS rules can be burdensome and expensive. The Community Foundation provides professional and cost-effective ways of administering these funds well into the future.

Utilize Retirement Plan Assets - A donor can use retirement plan assets [401(k), Keogh, 403(b)] to create a fund in the Community Foundation for purposes the donor has specified. Also, retirement assets combined with charitable remainder trusts and life insurance trusts can be a valuable way of maximizing benefits from retirement plans.

Other Ways to Make a Charitable Gift and Receive Income

There are many ways to make a charitable gift and still receive income for life for a specified time. Through these methods, donors may be able to increase annual income for themselves and/or their spouse while reducing taxes on current income, estates and gifts. Two examples are:

Gift Annuities - The Community Foundation offers competitive rates to residents of the state of Indiana who give current gifts but retain a lifetime income. A portion of these gifts may be tax-deductible and income is guaranteed. For more information, read about Gift Annuities on our web site, or for more information and a detailed profile that fits your situation, contact the Community Foundation at (260) 426-4083.

Charitable Remainder Trusts - Deferred gifts may be created so that you or someone you love can receive a lifetime income. At the death of the first beneficiary, the remainder of the trust passes to the Community Foundation to create a fund for whatever charitable purposes the donor has specified. These trusts provide current income tax deductions and/or estate tax deductions.

Other Ways to Make a Charitable Gift and Reduce Taxes

Charitable Lead or "Wait-a-While" Trust - Many individuals with sizable estates wish to take care of their children and grandchildren. However, they worry about the effect of estate taxes on the size of their loved ones' inheritance. If you find yourself in this situation, setting up a Charitable Lead Trust can take care of your charitable interests as well as your family.

You simply donate part of your estate to a trust now, and the income goes to your fund in the Foundation for a designated number of years. When the trust ends, the assets are passed on to your designated beneficiaries, thereby reducing your estate taxes. Your fund supports charity during all the in-between years, and your beneficiaries receive much more than they would have otherwise. Certain lead trusts also make it possible to pass value to future generations at greatly reduced tax levels.

Life Estate Agreement - If your home is a significant asset, but not one your children want, it can be an ideal asset for a charitable gift, ensuing that other assets need not be sold to pay federal estate taxes on the value of the family home.

You deed your home to the Fort Wayne Community Foundation now and retain the right for you and your spouse to live in your home for life. Such a plan permits you to receive a current income tax charitable deduction without a cash outlay. The amount of the tax deduction is the actuarial value of the Foundation's right to receive the property in the future and depends on your age, the age of your spouse, and the value of our home.

A gift of your home now with retained life use results in an estate tax charitable deduction. This deduction is equal to the value of your home at the time of your death, reduced by the value of the right of the surviving spouse to live in the house. If you ever need to vacate your property, you may rent all or part of the property to someone else or sell the property in cooperation with the Foundation.

Similar tax benefits are allowed for a gift of your farm or vacation home with retained right to use it during your life or to have another family member use it for life.