The Planned Giving Insights within this blog are provided through the generosity of our board member, Valerie J. Bowman, CPWA®, CAP®. Ms. Bowman is not compensated for these writings and, like all of our board, is not compensated for her service on the board. Valerie Bowman is a Certified Private Wealth Advisor® professional, a Chartered Advisor in Philanthropy®, and President and CEO of Bowman Wealth Management, LLC.
Hello Valerie – thank you for taking the time to share your insights on planned giving. Can you tell us a little about what planned giving is?
Planned giving at Haven Hills is an area of fundraising that refers to several specific gift types that can be funded with cash, equity, or **property. In brief, a planned giving request is a solicitation of major gifts for Haven Hills, often contributed by an individual donor through a will, bequest, or trust. As a planned giving donor, one recognizes that causes that they care about will continue to exist, even after their passing. Donors are giving because they want to. Haven Hills is asking because we need to help others. We appreciate that donors are both kind enough to give now and curious about how they can give later.
**Note: Donors should refer to the Haven Hills gift acceptance police for details of the specific types of gifts this organization is prepared to receive. Contact the Development Department at 818-887-7481 ext. 121
In addition to sending the, much appreciated, cash donations directly to Haven Hills, what are some other ways for donors to give now?
Donor can establish a donor advised fund (DAF). A donor advised fund is an irrevocable charitable giving account that can be established at a sponsoring organization like the charitable arm of a financial services firm or a community foundation. Once the donor deposits assets into the account, they receive an immediate tax deduction based on the type of asset, and their AGI, adjusted gross income. In most cases, the donor can direct the fund administrator to grant funds from the DAF to a specific nonprofit organization like Haven Hills.
What are some of the planned giving option for donors?
Let me mention some general categories. The specifics of each category should be discussed with one’s financial professionals.
One of the simplest ways to make a gift is through a will or trust
- Simply name Haven Hills as a beneficiary in a will or trust.
Donors can also designate Haven Hills as the beneficiary of the following types of assets:
- Retirement plans, financial account, or annuities
I’ve heard that Life Insurance can be donated as well. Is this correct?
Yes, often life insurance is no longer needed to cover the expenses for which it was originally purchased. Donors can either gift a policy to Haven Hills by naming Haven Hills as the owner and/ or designate Haven Hills as the beneficiary of the life insurance policy. The tax benefits for this type of donation are dependent on many factors and proper council should be sought.
Suppose a donor wants to give a gift of Real Estate
As part of the mission of Haven Hills is to provide shelter to victims of domestic violence, receiving real estate would certainly further that cause. However, we continue to invite donors to review the gift acceptance policy or contact Haven Hills to discuss the details of the property. Different tax deductions are available dependent, among other things, on how the property is used by Haven Hills or if it is sold and proceeds are used to support the mission of Haven Hills. There are many details about the donation of real estate that will impact the donor’s tax deduction. This can be a great option for the donor as it may lead to potential avoidance of capital gains tax if donated to Haven Hills rather than selling the property prior to donating it. In some cases, a charitable trust which can also be utilized to sell the property. I can’t emphasize enough, the importance of speaking to a tax, legal or wealth management professional, and legal counsel to ensure that generous gifts of real estate provide the charitable impact the donor wants, the financial impact they are entitled to, and the freedom of Haven Hills to use the property without incurring any financial responsibilities.
What About Gift of One’s Home?
A donor and their attorney can establish what is called a gift of a remainder interest in a personal residence. Basically, if you own your home you may irrevocably transfer title to Haven Hills, while retaining the right to use it during your lifetime, and continuing to pay the home’s expenses. After which time, Haven Hills will take ownership. The IRS has specific guidelines for the calculation of the tax deduction, and discourages debt-encumbered property, which may cause unwanted consequences for both the donor and Haven Hills.
Is appreciated stock something a donor could gift?
Yes, Amber. I mentioned charitable trust earlier, which, in brief, is a legal document that crates a means to transfer assets to a charity and may be established as a charity itself. There are many different types of charitable trust, which we will discuss, in our next blog. Each has different tax advantages and serves a different purpose. But, to answer your question, yes, donors can donate appreciated securities to Haven Hills outright or through a trust. Again donors should refer to the gift acceptance policy for addition information and specific instructions on transfers through a brokerage account.
In conclusion, these potential legacy gifts will be a lasting tribute to the donor, create fond memories for their family about their generosity, and, of course, evoke eternal gratitude from Haven Hills and the victims of domestic violence.
Income tax deduction for your planned gifts are dependent on may factors including your AGI, adjusted gross income. Please consult your tax professional to determine the tax deduction and savings for your much-appreciated generosity in gifting one or more of the above-mentioned gifts.
**Including language in your will about your desire to give is a simple process.
However, the hardest part of this delayed giving is perhaps gathering all family members and sharing your desire to leave a legacy to a charitable organization, upon your passing.
Providing for the future of a charity does not have to be to the exclusion of your heirs. If you so choose, there are many ways to provide for both, the details of which will be discussed in the next blog. Regardless of how you choose to give, Haven Hills is available to help you decide which giving vehicle best suits your needs and the needs of your family.
“I can testify that it is nearly always easier to make $1,000,000 honestly than to dispose of wisely” -Julius Rosenwald-
Ms. Bowman is a resident of California by way of Chicago, a city that certainly has its share of homelessness. However, upon moving to California she was stunned by an even heightened level of homelessness that appears to be California’s new normal. According to Los Angeles City Women’s Needs Assessment, (2019) 36% of homeless women were victims of domestic violence. Ms. Bowman has both written and spoken about homelessness. She is proud to be part of an organization that provides safety, shelter, and support to victims of domestic violence and proud to serve on the Haven Hills Board.
The information provided is meant to be general, and educational in nature. For specifics of your situation, please consult with your tax, legal, or financial professional, to determine the impact on your estate, gift and income taxes.