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Ways to give
There are many ways you can contribute to the class gift for our 50-year reunion, including cash, appreciated securities, bequests, charitable annuities, trusts, and real estate. Here's a list of popular ways to make a gift to Macalester College.
If you would like more detailed information on any of the gift types described here, please contact the Macalester College development office at 1-800-645-3919 ext. 5 or (651) 696-6061.
You can compare the benefits of each type of gift by clicking here.
Outright gifts of cash
You may make cash available for Macalester to use immediately, either for current operations or to be added to the endowment. You will receive a charitable income tax deduction for this gift.
Outright gifts of appreciated securities
Similarly, you may make an outright gift of appreciated securities (stock) to Macalester. Macalester will then sell the stock, and either use the assets to fund current operations, or add the proceeds to the endowment. You will bypass any capital gains tax on the donated stock, and receive a charitable income tax deduction.
Bequests
You may name Macalester as a beneficiary in your will (Òcreate a bequestÓ). You may leave Macalester a specific dollar amount, a percentage of your overall estate, or a specific piece of property. You may also designate Macalester to receive the remainder of your estate, after all other gifts to family and others are distributed. Or you may name Macalester as a contingent beneficiary, meaning that your estate would pass to Macalester if all of your other heirs were to predecease you. Any bequest made to Macalester will result in a charitable estate tax deduction for your estate.
Immediate Charitable Gift Annuities
In this type of gift, you contribute cash or long-term appreciated securities to Macalester in exchange for a one- or two-life gift annuity. Macalester signs a contract with you in which Macalester agrees to pay a fixed annuity amount to you and/or your spouse for your lifetime(s). The funds are invested, and you receive quarterly income payments, a portion of which will be tax-free. At the end of your lifetime, the remainder passes to Macalester. Charitable gift annuities are relatively simple planned gift to establish. In addition to lifetime income benefits, charitable gift annuities also carry with them income tax, capital gains tax and estate tax savings.
Trusts
Charitable Remainder Annuity Trusts
You can fund a charitable remainder annuity trust with cash or appreciated securities. Macalester will manage the investment of the trust assets and pay a fixed income payment to you and/or your spouse for your lifetimes. The amount of your lifetime payments will not be affected by market fluctuations. At the end of your lifetime(s), the remainder will pass to Macalester. Besides a lifetime income, this type of trust also has income, capital gains and estate tax advantages.
Charitable Remainder Unitrusts
A unitrust operates just like an annuity trust except that your lifetime income payments are based on a certain percentage of the fair market value of the trust. The trust is re-valued and the amount of your payments is calculated each year. For instance, you could establish a unitrust which would make a 6% payment to you and your spouse for your lifetimes. Each year, the value of the trust would be determined, and you would receive payments equal to 6% of that valuation during that year. A unitrust has similar tax advantages to that of an annuity trust.
Charitable Lead Trusts
Charitable lead trusts are in essence the ÒoppositeÓ of a charitable remainder trust. You can fund a charitable lead trust with cash or appreciated securities. Macalester will manage the investment of the trust assets and the trust first makes regular payments to Macalester. At the end of a predetermined number of years, the assets pass back to you or to other individuals you determine. The principal benefit of this type of trust is estate tax savings.
Gifts of Real Estate
Outright gift of real estate
You may make an outright gift of real estateÑyour home, vacation property, farmland or investment propertyÑto Macalester. The College will sell the real estate and use the proceeds either to fund current operations or to be added to the endowment. All gifts of real estate are subject to environmental and other reviews, and to the approval of the Treasurer. Donors of outright real estate gifts enjoy income tax and capital gains tax savings. The real estate is also removed from your taxable estate.
Bargain sale of real estate
In a bargain sale, you sell real estate to Macalester at a sale price which is less than the fair market value. Macalester then re-sells the property at fair market value, and the profit is a gift to Macalester. You receive a charitable income tax deduction for the difference between the fair market value of the property and the bargain sale price to Macalester. You will also bypass a portion of the capital gains tax on the sale. Again, the real estate will also be removed from your taxable estate.
ÒLife estateÓ gift
You may also make a gift of a home, but retain the right to live in the home for the remainder of your life. You will be responsible for paying the cost of property taxes, maintenance and insurance during your life. At the end of your life, the full use of the home passes to Macalester, and the College will then sell the property and use the proceeds for its charitable purposes. For this type of gift, you will receive a charitable income tax deduction and may also realize estate tax savings.
Beneficiary Designations
Life Insurance
You may name Macalester as a primary or successor beneficiary of a life insurance policy. You will not receive a charitable income tax deduction for this type of gift, but the gift will generate a charitable estate tax deduction.
Retirement Assets
You may name Macalester as the beneficiary of your retirement plan assets. These assetsÑqualified pension plans, IRAs, Keogh accounts, and similar accountsÑrepresent money that has been set aside and that has grown over time without being taxed. However, in order to make use of the assets, the money must be withdrawn, which triggers income tax. Moreover, if you leave retirement plan assets to your heirs, the assets are first subject to estate tax, and then to income taxÑfrequently resulting in a combined tax burden of 70% or more. Naming Macalester as the charitable beneficiary of these assets allows you to avoid these negative tax consequences and make a significant gift to the College.
This material is intended to provide basic information on gift planning and is not intended as legal advice. We encourage you to consult with your advisors as to the applicability of any of the information you read here to your personal situation. |
