Innovations in planned giving benefit you and the people we serve
There’s always something new on the horizon.
In recent years, Volunteers of America’s national organization, in Virginia, and our local affiliate, here in Brunswick, Maine, have made strides in exploring “planned giving” as a way of helping philanthropic individuals and other donors make larger gifts than they could otherwise make from their income.
Planned gifts take many forms and can be custom-tailored to meet donors’ needs and wishes. The basic idea of a planned gift is that it is a major gift made in life or at death as part of a donor’s financial and estate planning. Volunteers of America has an especially good annuity programs that can provide lifelong income for the donor while benefitting Volunteers of America and other heirs in ways that maximize the gift and minimize its impact on the estate. These include:
Donors can make a gift to Volunteers of America, and in return we make fixed payments (“annuities”) to them for life. At the death of the last beneficiary, we use the balance of the annuity for the charitable purposes that the donor specified when the gift was made. Payments can also start at a specified future date, giving donors a higher income rate and a larger charitable tax deduction.
“Planned giving has a remarkable impact,” says Pat Murtagh, vice president of external relations for Volunteers of America Northern New England. “With annuity programs like ours, in particular, donors can enjoy lifetime income while having a sustained positive impact on their communities. This can be genuinely life-changing for our clients — and for the donors themselves.”
Planned gifts can include cash, appreciated stocks or bonds, real estate, artwork, partnership interests, personal property, life insurance, retirement plans, and more.
David and Alma Kilpatrick of Topsham, Maine, for example, recently gave Volunteers of America a planned gift in the form of an annuity. The Kilpatricks are in their 80s.
“Annuities were new to us,” explains Alma. “We first learned about the program through our church and a luncheon where we met some of the people of Volunteers of America. Once we understood the program, we were very comfortable with it. Then just the other day, we were actually surprised when our first annuity check arrived in the mail!”
The Kilpatricks add that they like the way their planned gift multiplies the effective power of their donation and its ability to help large numbers of fellow citizens in need across the region.
Other popular forms of planned gifts include:
- Bequest Donors can include a provision in their will directing that a gift be paid to Volunteers of America after their death. Donors can give a specified amount of money, other assets, or a percentage of the balance remaining in their estate after other payments have been made. Donors can also tell Volunteers of America to use their bequest for a particular program or activity, if they wish, or allow us to use it at our discretion. Bequests cost donors nothing during their lifetime.
- Charitable lead trust Donors can create a trust that is invested by a third-party expert and pays income to Volunteers of America for a term of years or for the donors’ lifetime. When the trust ends, the remaining balance is returned to the donors or their heirs.
- Life insurance Donors can arrange to have the death benefit of a life insurance policy paid to Volunteers of America as a charitable gift.
- Retirement plan Donors can name Volunteers of America as the successor beneficiary of all or a portion of their IRA, 401(k), or other retirement accounts. Donors continue to take withdrawals from the plan during their lifetime, and they can change the designation of the beneficiary if their circumstances change.
“What many people don’t realize is how important planned gifts are not only to Volunteers of America, but also to themselves, especially during an economic downturn.” says Barbara Draughon, director of development for major gifts at Volunteers of America’s national office in Virginia. “Donors might not be able to increase their cash gifts, but they can add a bequest, a gift annuity, or a charitable trust. Tax benefits to donors from some of these gifts can be useful during a slow economy, while helping the organization build a buffer for the next downturn.”
Planned gifts have a wide variety of tax benefits that vary from gift type to type. Donors can contribute appreciated property, such as securities or real estate, receive a charitable deduction for the full market value of the asset, and pay no capital gains tax on the transfer.
Want to learn more about planned giving? Please contact Patricia Murtagh, our vice president of external relations, at pat.murtagh@voanne.org or 207-373-1140 ext. 221 today.
NOTE: The information in this article is only intended to show some of the ways of making planned gifts and their advantages. Do not take any action without first consulting your tax advisor.