Ways To Give
Discover ways to make gifts to Mathews-Dickey you may not have thought possible.
Many different types of gifts can provide for the continuing success of Mathews-Dickey, and at the same time improve your financial situation through tax savings. Many of our supporters choose to make planned gifts in forms other than cash. You will:
- Discover ways to make gifts to Mathews-Dickey you may not have thought possible.
- Learn how to give in ways that can actually “give back” for a time, providing extra income in retirement years or to help fund educational expenses and other needs.
- Add meaning to your gift by using it to honor a special friend or loved one.
- See how to save money on income, gift and estate taxes and redirect those amounts for use in ways you choose.
- Enjoy your giving more, knowing you are investing in Mathews-Dickey in ways that allow you to give the most you can in the most efficient manner.
That’s what effective gift planning is all about. We trust the following information presented here will help you maximize the potential of your resources through preserving financial security for yourself and your loved ones while funding a worthwhile organization.
Mathews-Dickey commonly receives gifts online and in person in the form of cash, checks and direct deposits. Cash gifts can be convenient for many people and are easily recorded through receipts and bank records. It is important to save all receipts to assure maximum tax savings.
The Mathews-Dickey Friends Club
When you join the Mathews-Dickey Friends Club you are helping the Club educate youth on the front end to keep them from falling through the cracks on the back end through leadership and career training experiences; build strong bodies and minds and explore their artistic and cultural aspirations. Click here for the Mathews-Dickey Friends Club page.
Many Mathews-Dickey supporters choose to make their gifts in forms other than cash. Popular examples include:
Life insurance policies
Securities (stocks, bonds, mutual funds)
Other items of value (jewelry, artwork, collections, antiques, automobiles, etc.)
After considering the properties you own, you may find giving something other than cash to be an appealing alternative. Giving non-cash property may enable you to make gifts while conserving cash for other uses and enjoying what may be greater tax savings than those provided by gifts of cash.
If you have considered making charitable gifts as part of your long-term financial and estate plans, you may want to consider ways a primary residence, vacation home or certain farm properties can be used to make a future gift to Mathews-Dickey while enjoying a number of current and future financial benefits.
Through a donation of a remainder in real estate, you can make a gift of your home or other appropriate property now, while retaining the security of knowing you may live there for the rest of your lifetime or other period of time you determine. You continue to enjoy the full rights and responsibilities of ownership.
Because you are making an eventual gift for charitable purposes you are entitled to an immediate charitable income tax deduction for the value of the remainder interest of your gift. You continue to maintain the property, pay the taxes and even receive any income it generates. Because you have provided for the future ownership of the property, however, it will not be subject to the possible expense and delay of probate. It will also not be part of your taxable estate, possibly resulting in what may be significant tax savings for your heirs.
Will and Other Plans
In addition to filling an important role in providing for the future financial security of your family and others, your will can offer a way to make thoughtful charitable gifts as part of your long-range estate and financial plans. It can be satisfying to know that a portion of your property will be put to good use in the future.
A gift made through a will can be convenient to arrange. A simple provision or amendment prepared by your attorney at the time you make or update your will is all that is necessary. Gifts included in wills are popular because they are flexible, easy to arrange and may be changed with your life circumstances.
Ways to give through wills:
Make a gift of a specific amount. A gift of a particular amount may be designated for general use or to fund a special need.
Provide for a gift of a particular property. Real estate, stocks, and other items of value are examples of properties that can be used to fund charitable bequests.
Designate that a percentage of your estate be given to Mathews-Dickey through your will.
Give the remainder, or residue, of your estate — that is, what remains after all other bequests to friends and loved ones are satisfied.
Name charitable interests to receive a bequest in the event other heirs are not there to receive their legacies.
There is no limit on amounts deductible from federal gift and estate taxes for charitable gifts made by will or trust, so no tax will be due on assets given in this way. To plan a charitable bequest, inform your attorney of your wishes and ask for advice regarding the best form for your gift.
Other ways to give through your estate
Many individuals have life insurance or retirement plans with significant balances. In some cases, these assets total more than is needed for a comfortable retirement, and could give rise to future income and estate taxes.
In that case, it may be wise to consider using these funds to make gifts to benefit Mathews-Dickey now or in the future. Contact your life insurance professional or retirement plan administrator for ways to make gifts from these resources today. A simple change of beneficiary form may be all that is required to provide for a gift of life insurance proceeds or what remains in a retirement account. As in the case of gifts through wills, such gifts can be arranged to take place only if loved ones predecease you, or in the event of other circumstances you specify.
Your retirement plan administrator or your life insurance professional can also provide more details upon request.
Options using bank and investment accounts
Many people have bank and investment accounts that they would like to leave directly to family, friends or other charitable interests like Mathews-Dickey at the end of their lifetime. This can often be accomplished using a “pay on death” (P.O.D.) provision for a bank account or a CD or a “transfer on death” (T.O.D.) provision for certain other investment accounts. Simply ask your bank manager or officer of your financial advisor for the appropriate form. You retain full ownership and access to the funds during your lifetime and the person or charity only receives what is left in the account.
Charitable Gift Annuities
Charitable gift annuities are a very flexible way to make charitable gifts to Mathews-Dickey. They can be designed to provide a fixed income for life for you and/or others you choose. They are easy to create and can be funded with gifts of relatively modest amounts.
Here’s how a charitable gift annuity works:
You transfer cash or other assets to Mathews-Dickey. This involves the completion of a simple agreement and can normally be done by mail.
You will receive fixed payments annually (or more frequently, if desired). The amount of your payment is a percentage of your gift at the time your gift is funded and will not change with interest rate and investment market fluctuations.
You will be entitled to an immediate charitable income tax deduction for a portion of the amount used to fund your gift annuity.
A part of each payment is received tax free for a period of time.
If you would like, you can also choose to name another person (often a spouse, parent or sibling) to receive payments with you, instead of you or following your lifetime for the remainder of his or her life.
The assets used to fund your gift annuity will generally be removed from your estate for probate and tax purposes.
Charitable Remainder Trusts
A charitable remainder trust offers a way to make a future gift for philanthropic purposes after first providing income for yourself and/or others you name.
Here’s how a charitable remainder trust works:
A trust is drafted by an appropriate professional advisor.
Assets are transferred to the trust to be managed by you or another person or an entity you choose as trustee.
Payments are made from the trust to you and/or others you name for life or other period of time you determine.
You are entitled to a federal income tax charitable deduction and may enjoy capital gains tax savings in the year you create the trust. Amounts used to fund your trust may not be part of your probate or taxable estate.
When the trust ends, its remaining assets become a gift to one or more charitable interests of your choosing. The gift portion is known as the charitable remainder.
There are two primary types of remainder trusts: the charitable remainder annuity trust which provides you with a level predictable income and the charitable remainder unitrust which provides you with a variable income. Each is described below.
A gift with predictable income
A charitable remainder annuity trust is a way to make a gift while assuring a fixed, regular income. Income from such a trust can be a reliable income supplement in retirement years. The payments received each year must be at least five percent of the amount originally placed in the trust. You determine the exact amount when your trust is created.
A gift with variable income
Like the annuity trust, the charitable remainder unitrust provides for a gift that allows a donor to retain income for life or other period of time. But unlike the annuity trust, the income from a unitrust can fluctuate over time with the value of the assets placed in the trust.
You determine the annual payment percentage when the gift is made. Each year this percentage (at least five percent) of the value of the trust assets is paid to you or others you name. When the value of the investments goes higher, more income is received. The income will be less if the value of the assets declines. If provided for in the trust agreement, additions can be made to a unitrust and an additional tax deduction is allowed for part of any additional amounts contributed.
For those who would like to provide for an income that can grow over time, the charitable remainder unitrust could play a welcome role in long-range plans. Another benefit of charitable remainder trusts is the fact that no tax is payable by the trust at the time investment gains are realized, making it possible to enjoy increased income over time based on tax-free growth within the trust. This can be especially attractive to those who anticipate growth in investments over time.
Income for a period of time you choose
It is also possible to establish a charitable remainder trust for a fixed time period of up to 20 years. Such a trust may be useful if you would like to retain income to meet your needs over a limited time frame. It is also possible to create such a trust to provide income for one or more loved ones for a particular term of years.
Retirement Plan Gifts
Many Americans have taken advantage of tax incentives provided by Congress to encourage saving for retirement through contributions to Individual Retirement Accounts (IRAs), 401(k)s and similar plans.
In addition to income tax savings at the time contributions are made to such plans, the assets in the plans then build tax free over time for future enjoyment.
Amounts held in tax-favored retirement plans are typically not subject to income tax until they are actually withdrawn from the plan by its owner or surviving heirs.
You may find that your retirement plan can also at times be a convenient “pocket” from which to make charitable gifts to Mathews-Dickey each year.
Other retirement plan gift opportunities
If you are over the age of 59½, and can make withdrawals from your traditional IRA or other tax-favored retirement plan without triggering an early withdrawal penalty, you may wish to make withdrawals from retirement plans in amounts sufficient to fund all or a portion of your charitable gifts. Those over the age of 70½ who would like to make gifts in excess of amounts that can be given tax free or would like to give from a retirement plan other than a traditional or Roth IRA may also wish to make their gifts in this way.
Although you will be required to report the income on your tax return, when you itemize your deductions, you are allowed a corresponding charitable deduction for your cash gifts up to 50 percent of your adjusted gross income (AGI).
If you are able to deduct the full amount of the gift/withdrawal, this can amount to a “wash” for federal tax purposes and ensure these funds will, in effect, never be subject to gift, income or estate taxes.
You should seek assistance from your accountant or other advisor when determining the optimum amount to give from retirement plan accounts under federal and state tax laws.
Avoid Double Taxation
You also may want to consider including charitable gifts as part of your plans for the future distribution of any balances remaining in your retirement plans at the end of your lifetime.
Because they are included as part of one’s estate at death the assets in tax-favored retirement plans such as an IRA, 401(k), SEP, and similar plans can be subject to federal and/or state estate taxes. In addition, when heirs receive the balance of retirement plans after payment of estate taxes of up to 40 percent or more, income tax will also be due — up to 39.6 percent or more — depending on state income taxes and other factors. Thus, the combination of income and estate taxes that could eventually be levied on retirement accounts may in some cases amount to the bulk of an account’s value.
Rather than allowing retirement assets to be reduced by a combination of estate and income taxes, you can direct that such assets be used to fund charitable gifts from your estate. This can actually result in more assets being received by loved ones than if retirement assets were left to family and charitable gifts were made from other funds.