You may be surprised to learn all the ways a planned gift benefits you and your loved ones at the same time you’re helping others.
Planned gifts are aptly named because they allow you to determine exactly how you want to support a cause during your lifetime and beyond. What many donors don’t realize is that planned gifts, including those to the Springpoint Foundation, often have direct benefits for you and your loved ones, as well.
Using Springpoint Foundation donation benefits as an example, we explain how various giving options can work to the advantage of both the donor and recipient.
The Foundation, which receives 80% of its funding thanks to residents’ generosity, provides many important resident services and community programs. Like many nonprofit organizations, the Foundation offers a number of giving options depending on donors’ financial goals.
If your wish is to support the Foundation without affecting your finances while you’re living, legacy creation is an approach to consider. This type of Springpoint Foundation donation benefits you because you’re able to leave a lasting and meaningful impact through your will or trust. Often, the gift is in the form of cash, property, or a share of an estate. You can choose to allocate donations to a specific purpose or make an unrestricted donation by designating a specific amount or a percentage of your total estate to the Foundation.
An asset like a retirement plan comes with some strings, like income tax. Naming the Foundation as the beneficiary of your retirement plan, rather than family members, lets you pass on other assets, potentially with fewer tax obligations, to your family. In this scenario, you’re able to continue drawing funds from the plan for your own use, leaving what’s left to the Foundation.
There is one detail to be aware of so you can ensure your Springpoint Foundation donation benefits others as you wish. Ensure your instructions are clear and the Foundation is aware of your intent since retirement plan administrators are not obligated to notify us.
Another potential Springpoint Foundation donation benefit is financial benefits for yourself in the form of tax savings. Gifting stock or appreciated securities can help you avoid capital gains liability and allow you to take an income tax deduction. In this case, you would transfer appreciated stocks, bonds, or mutual fund shares to the Foundation, which the Foundation would in turn sell and convert to usable donation funds. Your donor benefits include an immediate income tax deduction, as well as avoiding the tax you would otherwise owe on the increased value of the asset.
This approach is appealing to many donors because not only does the ultimate value of your gift often exceed what you paid for it, but your deduction amount offsets some or all of the original investment.
Another tax-related giving strategy is establishing a deferred gift annuity. With this example of planned giving, you transfer cash or securities to the Foundation, and at a future date, you begin receiving fixed annuity payments. The balance passes to the Foundation when the contract ends, but in the meantime, payments can provide extra cash during your retirement years.
Life insurance policies are often assets allocated to heirs, but you can actually use a life insurance policy as a gift that doesn’t affect your estate while taking a tax deduction on its value. You can either establish a new policy or donate a paid-up policy you no longer need, and the Foundation will cash it in or hold it and allow the value to grow.
When your donation strategy involves tax benefits, it’s always a good idea to involve a professional financial advisor or tax planner who can advise you based on your specific circumstances.