Transcript Division of University Advancement

How Funds Are Raised:
Planned Giving
How Funds Are Raised:
Creating a legacy
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Legacy
1: a gift by will especially of money or other personal
property : bequest
2: something transmitted by or received from an ancestor
or predecessor or from the past <the legacy of the ancient
philosophers>
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Legacy
Do you want to…
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Change lives forever
Make a permanent impact on an organization you cherish
Promote your personal values forever
Make a real and powerful difference in the world
Create a legacy
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Legacy
How can a legacy level gift help?
1. Create an endowment (scholarship, program, or event)
2. Name a building, research project, or faculty
development fund
3. Support a favorite academic program
4. Impact current and operational funding
5. Increase a stabile long-term financial environment
6. Encourage others to give
7. Change lives forever
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Planned Gifts
What Is a Planned Gift?
While Annual gifts and Major gifts are given
“outright”, Planned gifts are established in a
way that is typically fulfilled after a term of
years or following the passing of one or more
individuals.
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Planned Gifts
What Defines a Planned Gift at LMU?
A planned gift to LMU is a gift designating LMU
as the beneficiary (or one of the beneficiaries).
A planned gift may be made either as a
revocable or irrevocable gift, and each type has
different advantages and implications for both
the donor and LMU.
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Planned Gifts
What Do Planned Gifts Fund at LMU?
Just like Major gifts, Planned gifts fund:
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Capital Projects such as new residence halls
New technology for classrooms
Endowed academic chairs
Endowed academic scholarships
Endowed faculty development funds
Many other areas!
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Planned Gifts
What is the Process that Leads to a Planned Gift?
3. Work with University
Advancement at LMU to
initiate your gift
2. Consult with your
financial advisor
1. Identify Values and
Giving Priorities
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Ask yourself: “What kind of giving plan is best
for my specific situation?”
Ask yourself: “What programs or facilities do I
want to support at LMU?”
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Planned Gifts
Part I: The “Revocable” Planned Gift
A revocable gift, such as a will provision, designates
LMU as the beneficiary of an estate, trust or other
instrument.
Advantages: Can be changed or revoked at any time by
the donor
Disadvantages: Does not provide immediate tax
benefits for the donor, and may incur legal fees
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Planned Gifts
Types of Revocable Planned Gifs
1. The Will Provision
• A will is a legal document directing the distribution of your assets at
your passing
• Making a bequest to LMU can simply be through a clause added to
an existing will
• Many people decide to bequeath a percentage of their assets,
rather than a specific dollar amount
• Did you know over 50 percent of Americans do not have a will? Do
you?
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Planned Gifts
Sample Bequest Language
Official Name: Lincoln Memorial University, Harrogate, TN, Claiborne County
LMU is a 501(c)(3) charitable organization under federal guidelines.
Unrestricted Bequest – percentage of estate
"I give (_______) percent of my estate/dollars/property/residue/remainder of my estate) to
Lincoln Memorial University, a non-profit institution in the State of Tennessee, to be used to
further its purposes as the Board of Trustees in their discretion may deem appropriate.“
Gift for Specific Purpose - Restricted
I bequeath to Lincoln Memorial University, Harrogate, TN, the sum of [________Dollars
($_________)] to be added to its endowment, and the net income shall be used [student direct
aid -or- student scholarships -or- student labor grants].
Contingent Gift of Residuary Estate
I devise and bequeath the residue of the property owned by me at my death, real and personal
and wherever situate, to [my wife/husband], if [she/he] survives me. If my [my wife/husband],
does not survive me, I devise and bequeath my residuary estate to Lincoln Memorial University,
Harrogate, TN, for its general purposes.
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Planned Gifts
Types of Revocable Planned Gifts
2. The Revocable Living Trust
• A Trust is a giving instrument in which funds are invested,
managed and dispersed by a trustee according to the wishes of
the donor
• A revocable trust may be altered at any time
• Because of this, it offers greater flexibility for the donor but may
also be subject to taxation
• A living trust offers greater privacy than a will (which is public
record)
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Planned Gifts
Other Types of Revocable Planned Gifts
3. Insurance and IRA Beneficiary Designations
• Many people name LMU as the beneficiary of an insurance
policy or a retirement fund
• Recent tax law changes provide additional benefits for
charitable IRA retirement rollover gifts
• As always, it’s important to consult your tax professional for
guidance in your specific situation
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Planned Gifts
Summary of Revocable Planned Gifts
• Revocable gifts are flexible – they can be changed at any
time
• A revocable gift does not transfer assets until the death of
the donor (or other condition). Because of this, there is no
immediate tax deduction
• A revocable giving instrument like a living trust can protect
your wishes and often avoids probate
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Planned Gifts
Part II: The Irrevocable Planned Gift
• Unlike a revocable gift, an irrevocable gift represents an
immediate transfer of assets using a variety of methods
• Because of this, there is an immediate charitable tax
deduction for the donor
• There are several ways to make an irrevocable planned gift to
LMU:
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Planned Gifts
1. The Charitable Gift Annuity
• A Charitable Gift Annuity, or CGA, is a popular and powerful way to support
LMU
• A gift annuity is a contract between LMU and a donor, in which LMU agrees
to pay a fixed amount in exchange for a transfer of cash or other property
• A CGA’s annuity payments are guaranteed, no matter how the stock market
performs
• A two-life CGA may pass to one additional person before being ultimately
distributed to LMU
• A CGA provides an immediate tax deduction based on the “remainder”
interest at the end of the annuity’s life
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Planned Gifts
2. The Irrevocable Trust
• Some donors choose to establish more elaborate giving arrangements that
provide for additional family members and/or multiple charities. While there
are many variations of irrevocable trusts, the most common categories are
outlined here.
• Trusts can be funded by cash, stock, real estate or other assets
• Since they are irrevocable gifts, they provide an immediate tax deduction, and
they also allow the transfer of assets to bypass capital gains taxes
• Some trusts can provide for up to eight persons before ultimately being
distributed to LMU or other charities
• Trusts offer privacy for an estate, and pass directly to beneficiaries without
probate
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Planned Gifts
Charitable Remainder Trusts
• Two popular types of irrevocable trust are the CRAT
(Charitable Remainder Annuity Trust) and CRUT
(Charitable Remainder Unitrust)
• The CRAT makes a fixed annuity payment, while the CRUT
returns a percentage of total assets within the trust
• Both types of trusts can provide for multiple beneficiaries
with many levels of flexibility
• Both types of trusts offer an immediate tax deduction,
and bypass capital gains taxes
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Annuity Trust (CRAT) vs. Standard Unitrust (CRUT)
Annuity Trust
Unitrust
Suggested minimum for
funding with single lump sum
$150,000 to $200,000
$150,000 to $200,000
Additions allowed
No
Yes, if allowed by the trust document
Type of payment
Fixed dollar amount based on a
percent of the initial contribution
Fixed percentage of market value each year
(minimum 5% and not greater than 50%)
(minimum 5% and not greater than 50%)
Property appropriate for
funding
Cash, readily marketable securities
Cash, readily marketable securities. Illiquid
property could be used if the donor agrees to
make extra contributions to cover fees,
payout requirements, or other expenses
before the trustee sells the liquid assets.
Results if assets appreciate
Beneficiary’s payments stay fixed.
Charity’s remainder interest increases.
Beneficiary’s payments increase. Charity’s
remainder interest increases.
Results if assets depreciate
Beneficiary’s payments stay fixed.
Charity’s remainder interest decreases
and is subject to depletion.
Beneficiary’s payments decrease. Charity’s
remainder interest decreases.
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Planned Gifts
Is a Planned Gift Right For You?
Every gift to LMU is ultimately about supporting the mission
of LMU and helping our students achieve success. Planned
giving provides donors with a way to make a substantial gift
to LMU in a way they might not otherwise have been able
to do. Is a planned gift right for you? Contact the Division of
University Advancement to find out more about planned
giving today!
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Planned Gifts
What projects at LMU need your support?
1. Create and name an Endowed Scholarship
2. Build a new Student Center
3. Construct new residence halls
4. Support accreditation/ upgrades at Duncan School of Law
5. Support The Abraham Lincoln Library and Museum
6. Renovate Duke Hall of Citizenship with HVAC
7. Provide upgrades / technology improvements to DeBusk College of
Osteopathic Medicine
8. Increase research funding
9. Renovate Grant-Lee Hall
10.Renovate Democrat Hollow
11.Construct the Burchett Communications & Technology Center
12.Improve Athletic Facilities
13.Increase Endowment Funds
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It’s all about you!
What do you want your legacy to be?
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