Ways to Give

The information presented on this web site is for general information and educational purposes only. It is not intended to be a substitute for personalized legal and tax advice about the topics discussed. Please contact a qualified legal or tax advisor to obtain professional advice tailored to your individual circumstances and goals.

Immediate Outright Gifts

Gifts of Cash

Cash is the simplest asset for you to donate to your parish, school or agency ("Church") and the simplest asset for the Church to accept and quickly put to good use. You can claim the entire amount of your cash gift as a charitable income tax deduction. The IRS allows you to claim this deduction up to 50% of your adjusted gross income (AGI). If you use appreciated securities or other assets to make your gift, your deduction will be the same, but you will only be able to claim the deduction up to 30% of AGI. You can claim excess deductions over the five tax years following your gift.

Gifts of Appreciated Securities

A popular way to make a gift to the Church and earn some tax breaks is through a gift of appreciated securities. The IRS allows you to deduct this type of gift as a charitable donation. Moreover, you can also avoid capital gains tax on the transfer. This double benefit means that you can leverage a larger donation by using appreciated securities rather than cash to make your gift. Here's how it works:

Your gift will be valued by averaging the high and low prices for the stock on the date of the transfer to the Foundation. If your stock is held by your broker, the date of transfer is the day the shares reach the Foundation’s account. If you hold the certificates yourself and mail them to the Foundation, the day of transfer is the postmark date on the envelope.

You can deduct the full value of your donation, within this limitation: the IRS says that you can deduct gifts of appreciated assets up to 30% of your adjusted gross income. Thus, if your AGI will be $100,000 this year, you will be able to deduct up to $30,000 in gifts of stock. However, a gift in excess of the 30% amount is not wasted because the IRS allows you to carry forward excess deductions through the five tax years following the year of your gift.

Gifts of Real Estate

Gifts of real estate may save you thousands of dollars in income, estate, and capital gains taxes, while providing a substantial benefit to the Church.

The Catholic Foundation can accept gifts of residential, commercial or undeveloped real estate. You will receive a charitable income tax deduction based on the fair market value of the property, with no capital gains liability on the transfer. You are also freed from paying real estate taxes, liability insurance and maintenance costs on the property. In some cases, the Church may use the property for its ministry needs. However, in most cases, the Foundation will sell it, and apply the proceeds to the Church of your choice.

Please note: The Foundation must review and approve the transfer before the gift of any real estate can be completed. You will have to secure an appraisal to establish the property's value.

Gifts of Personal Property

Some donors may opt to make donations of personal property that has value. For example, you may choose to contribute artwork, antiques, jewelry, motor vehicles, equipment and other items to the Church. If you are considering such a gift, please call the Foundation first, as what you choose to donate may impact the amount of your charitable deduction. Please note: You will need to secure an independent appraisal to establish the amount of your deduction.

In-Kind Gifts

In-Kind Gifts, such as labor and materials, can have a major positive impact on the Church. For example, if you own or work for an excavation company, construction, electrical or plumbing company, your company may choose to donate its services and/or materials to the Church. This can be done pro bono or at a reduced rate. Tax benefits may apply for these gifts.

 

Estate Gifts

Bequests in Wills and Living Trusts

A charitable bequest is one of the simplest ways to make a charitable gift. A bequest is a gift given to the Church through one's Will or Living Trust. Charitable bequests can include anything of any value in your estate such as cash, stock certificates, jewelry, real estate, antique furniture, etc.

There are several accepted ways to make a bequest to the Church in your Will or Living Trust: You can name a specific dollar amount, you can designate a specific piece of property (such as your home), you can define your bequest as a percentage of your gross estate, or, you can name the Church as the recipient of your residual estate.

A charitable bequest or trust distribution is deductible for federal estate tax purposes, and there is no limit on the deduction your estate can claim. If you already have a Will or Living Trust, you can amend them to make a gift without rewriting the entire document. An attorney can prepare a Codicil to your Will that adds a new bequest to the Church while reaffirming the other terms of your Will. Similarly, he or she can prepare an Amendment to your Living Trust to add the Church as a beneficiary.

Because it is a legal document, it is important to use the proper legal name of the entity to which you wish to make a gift. Please contact The Catholic Foundation to ascertain the proper name to use when making your bequest.

Gifts of Retirement Assets

When you plan your estate, it may seem natural to designate a family member as your beneficiary, and use other assets to make a charitable gift. But using retirement assets to make your donation to the Church and leaving other assets to your heirs often enables you to give more to your heirs due to the tax consequences of distribution of tax-deferred assets at death.

Since the Church is a non-profit organization, it will not pay income tax on the distribution (nor will the gift be subject to estate tax). The entire amount comes to the Church and your heirs may benefit from a reduced estate tax burden.

To make such a gift, be sure to direct the gift to the Church in your plan's beneficiary designation form - rather than through your Will. If you fail to do so, the assets will be included in your taxable estate If you choose, you may also make the Church a partial beneficiary of your plan and direct the balance to your heirs.

It is important to use the proper legal name of the entity when designating a beneficiary. Please contact The Catholic Foundation to ascertain the proper name to use on your beneficiary designation form.

Gifts of Life Insurance

There are two common ways you can use life insurance to make a gift. First, policies for which the original purpose is no longer applicable (college education for a child who has graduated), can be given to the Church. When you transfer the policy, you receive an immediate tax deduction. Upon your death, the death benefit of the policy will be given to the Church. (Note: if the policy is not paid up, the Church must decide whether or not to keep paying the premiums or cash in the policy.) Second, you can purchase new policies and name the Church as owner and beneficiary of the policy.

By naming the Church as both beneficiary and owner of the policy, all the premiums could be claimed as a charitable deduction. Upon the insured's death, the Church would receive an amount equal to the face value of the policy.

It is important to use the proper legal name of the entity when designating a beneficiary. Please contact The Catholic Foundation to ascertain the proper name to use on your beneficiary designation form.

 

Partnership (Split Interest) Gifts

Charitable Bargain Sales

A Charitable Bargain Sale is a planned gift that enables you to both make a substantial gift to the Church and keep part of the value of your property as cash. By doing so, both you and the Church will benefit. A bargain sale is the purchase of property (securities, real estate, etc.) for less than its fair market value. In such case, the difference between the fair market value and the sales price constitutes a charitable gift, for which the donor will receive a charitable income tax deduction. The charitable bargain sale works like this:

  • The parties mutually agree on a purchase price that is less that the property's fair market value, which has been determined by your independent appraiser.
  • The Church may pay the purchase amount upfront, or issue the donor an installment note for a mutually agreed upon term of years and interest rate.

Not only will the donor receive a charitable deduction, but he or she will also avoid capital gains tax on the portion of the transaction that was a gift to the Church.

Retained Life Estate

A retained life estate deed allows you to donate your personal residence (such as a home, cabin, or farm) while retaining the right to live on and use the property. When you make the gift, you retain the right to use the property for the rest of your life, a term of years, or a combination of the two. In exchange for your remainder interest gift, you receive an immediate income tax deduction.

This creative gift plan transfers your personal residence to the Church but reserves a free lifetime tenancy to you.

You will continue to be responsible for the house's ongoing taxes, structural maintenance and upkeep. Also, the Church mutually agrees up front about what the Church will do if you no longer wish to live in the house after you have donated it to the Church, or if you become physically unable to continue living there. Your gift will provide you with a charitable income tax deduction, based on the fair market value of your house minus the present value of the life tenancy you have retained.

In preparing a life estate deed, you should be advised by an attorney with expertise in the area of charitable estate planning.

Charitable Remainder Annuity Trust

If you are seeking a way to make a charitable gift to the Church while retaining a fixed income for you, your spouse, family members, or other individuals, you might consider a Charitable Remainder Annuity Trust, which is an individually managed trust that combines a charitable gift with regular, predictable income, along with some flexibility in management and investment. In general, here’s how it works:

  • The annuity trust pays its beneficiaries a fixed-dollar income or a fixed percentage of the initial value of the assets that funded the trust.
  • Income from your annuity trust can be paid to you and your other beneficiaries for lifetime, for a term of up to 20 years, or for a combination of both.
  • When your annuity trust terminates – at the death of the last beneficiary or at the end of the trust term – the remaining balance will be available for the Church you designated when you created the trust.

Tax advantages include:

  • No upfront capital gains tax is payable if you fund your annuity trust with appreciated property. So, you can contribute appreciated but low-yielding assets and put the entire value of your gift to work generating higher income for you.
  • Besides avoiding capital gains tax, you also receive a charitable income tax deduction when you create an annuity trust. Your deduction will be based on the full fair market value of the assets you contributed, reduced by the present value of the income interest you retained.

In setting up a Charitable Remainder Annuity Trust, you should be advised by an attorney with expertise in the area of charitable trusts and estate planning. Once your trust agreement is signed, you can fund your annuity trust by transferring assets to your trustee.

Charitable Remainder Unitrust

The unitrust is similar to the annuity trust in many respects. One primary difference is that the payment made to you or your designated non-charitable beneficiary is not a fixed or guaranteed amount.

The unitrust is an individually managed trust paying its beneficiaries – you, your spouse, family members, or other individuals – income as a fixed percentage of the value of its principal, which is revalued annually. In general, here's how a unitrust works:

  • The unitrust pays income for the lifetimes of the beneficiaries, for a term of up to 20 years or for a combination of both.
  • Beneficiaries receive a fixed percentage of the value of the trust’s principal, which is revalued annually.
  • Income in excess of that unitrust amount is reinvested to maintain principal and allow for growth.
  • When your unitrust terminates – at the death of the last beneficiary or at the end of the trust term – the remaining balance will be available to the Church for the use you designated when you created the trust.

The advantages of a unitrust include:

  • If you fund a unitrust with appreciated securities or property, no up-front capital gains tax is payable. You can contribute appreciated but low-yielding assets and put the entire value of your gift to work generating higher income for you.
  • Besides deferring capital gains tax, you also receive a charitable deduction when you create a unitrust. Your deduction will be based on the full fair market value of the assets you contribute, reduced by the present value of the assets you retained.

In setting up a charitable remainder unitrust, you should be advised by an attorney with expertise in the area of charitable trusts and estate planning. Once your trust agreement is signed, you can "fund" your unitrust by transferring assets to your trustee.