Planned Giving: An Investment for the Future
To fund its important programs, the National Kidney Foundation of Maryland depends heavily on private contributions from caring individuals. And every year, more of these donors are discovering the benefits of supporting the NKF-MD through their estate plans.
These donations (often called planned gifts) can offer many advantages:
- Reduce estate taxes
- Provide a life income stream
- Allow you to make a much larger gift than you thought possible
- Receive a current income tax deduction
- Reduce or avoid capital gains tax
- Support the vital work of the NKF-MD
To make all that we do possible, the National Kidney Foundation of Maryland depends heavily on private contributions from caring individuals throughout the country. And every year, more of these contributors are discovering the benefits of supporting the NKF-MD through what has come to be called planned giving.
That means planning your gift with regard for tax and estate implications. It enables you to help NKF-MD and move toward your personal financial goals at the same time. There are many ways of planned giving that are available to you when you give to the National Kidney Foundation of Maryland. They include:
- Gifts For The Present - An outright gift of cash is the simplest and most popular type of charitable gift. It goes to work immediately, meeting current needs or serving as an endowment. You receive an income tax deduction for the full amount you give. For example, if you are in the 31 percent marginal tax bracket, a $5,000 cash gift to the NKF will result in tax savings of $1,550, so the actual cost of the gift to you is only $3,450. An outright gift of appreciated securities such as stocks or bonds provides an extra tax benefit. In addition to receiving an income tax deduction for the fair market value of the security, you also avoid tax on the capital gain.
- Gifts For The Future - A gift that is planned now but does not become available to NKF until a future time is known as a "deferred gift." Two common types are the charitable bequest and the gift of life insurance.
- A charitable bequest to the National Kidney Foundation of Maryland can be as simple as a sentence or two in the body of your will. Your bequest may specify a certain sum of money: "I give to the National Kidney Foundation of Maryland the sum of $ to be used for its general purposes." You may also give a particular asset ("my shares of XYZ stock. . .") or a portion of the residue of your estate after other bequests have been paid ("50% of the rest, residue and remainder of my estate. . ."). You may designate your bequest to be used for a particular aspect of NKF-MD's programs, and you may indicate whether it is for current needs. (Such conditions should be discussed beforehand with an NKF-MD representative to ensure that your wishes can be met.) Because it is revocable, a bequest provides no current income tax deduction, but when a bequest is distributed, the amount will be deductible from your taxable estate.
- A gift of life insurance can provide a significant future gift to NKF-MD at an affordable present cost to you. Many people own some form of life insurance because of its unique ability to meet a variety of needs for financial protection, but its role in planned charitable giving is frequently overlooked. Giving a new or existing policy will provide a tax deduction for the present cash value of the policy and/or the future premiums you pay if the National Kidney Foundation of Maryland is named as beneficiary and owner of the policy. (Simply designating NKF-MD as beneficiary does not result in a tax deduction.)
- Gifts That Give Back - The third category of planned gifts includes those that "give back" by combining a charitable gift with life income for you and/or other beneficiaries you designate. These popular plans can help you make a substantial gift to NKF-MD while still providing for your personal financial needs. They offer significant tax benefits and, depending on the asset contributed, may even increase your cash flow.
- The charitable gift annuity is the oldest, simplest and most popular life income gift. In exchange for a contribution of cash, marketable securities or (in some cases) real estate, the National Kidney Foundation of Maryland agrees to pay a specified life annuity to the donor and/or another beneficiary. Although rates depend on the ages of the beneficiaries, annuities frequently provide greater cash flow than fixed payment investments. A portion of the contribution is tax-deductible in the year of the gift, and a portion of the annuity will be tax-free. With appreciated property, tax on the gain is reduced.
- The charitable remainder trust is a planned giving arrangement in which property is irrevocably transferred to a trustee under a trust agreement. Income (and, in some cases, principal) from the trust is paid to the donor and/or other beneficiaries for life or a term of years. At the end of that time, NKF-MD receives the remaining trust assets. Such trusts offer great flexibility in meeting individual income and estate planning needs. The trust payout rate, set in consultation with NKF-MD, may be a fixed amount or a percentage of the trust assets as revalued annually. At the time of the transfer, the donor receives a tax deduction for the actuarially-determined present value of the remainder interest.
Look over the possibilities and find those that best suit your situation. Use the response form to request further information that you can review with your financial or tax advisor. When you are ready to proceed, please contact Raquel McGuire at 410-494-8545, or email rmcguire@kidneymd.org for help in completing your gift.
The information on this page does not constitute legal or financial advice and should not be relied upon as a substitute for professional counsel. The National Kidney Foundation of Maryland encourages you to seek professional legal, estate planning and financial advice before deciding on a course of action.
For additional information or assistance with any of these gift options, please contact Raquel McGuire at 410-494-8545, or email rmcguire@kidneymd.org.
