A donor can make a gift to The Broward Education Foundation and receive immediate financial benefits, including a lifetime stream of income and a charitable income tax deduction. There are several gift vehicles to choose from, such as charitable gift annuities, deferred gift annuities, The Broward Education Foundation Pooled Income Funds and charitable remainder trusts. Life income gifts may be designated to benefit any department or program at The Broward Education Foundation.

Summary of Financial Benefits:

• A stream of income for the lifetime of the donor and a second beneficiary (often a spouse)
• A charitable income tax deduction
• Relief from capital gains taxes on gifts of appreciated property
• A reduction in federal estate taxes
• Full campaign credit
• Membership in our donor society
• Recognition on The Foundation’s Wall of Honor

In determining which vehicle is most appropriate, the following questions should be answered:

• Will the gift be based on one or two beneficiaries?
• What is the age of the donor and/or the donor's spouse, or the age of the second beneficiary?
• What asset will the gift be funded with—cash, securities, mutual funds, real estate or other?

CHARITABLE GIFT ANNUITY

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A charitable gift annuity is a contract between the donor and The Broward Education Foundation that provides advantages for both. Charitable gift annuities are a solid investment in The Broward Education Foundation’s future as they form a valuable part of our growing endowment. Charitable gift annuities may be funded with cash, securities or property. The minimum gift amount to create a charitable gift annuity is $5,000.

The payout rate on a charitable gift annuity is based on the age of the donor at the time the gift is made. The rates are suggested by the American Council on Gift Annuities (ACGA), a volunteer organization comprised of representatives from charitable and for-profit organizations. The Broward Education Foundation follows the rates suggested by the ACGA.

Summary of Financial Benefits:

• Guaranteed fixed payments for life, a portion of which is nontaxable
• Charitable income tax deduction for a portion of the gift
• Reduced capital gains taxes
• Membership in our donor society
• Recognition on The Foundation’s Wall of Honor

DEFERRED CHARITABLE GIFT ANNUITY

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A deferred charitable gift annuity is similar to a charitable gift annuity except that the payments are deferred to a future date. A donor may defer payments to years when income is needed more, such as retirement. The donor obtains a substantial charitable income tax deduction in the year the gift is made. Because payments are deferred, allowing the principal to grow, the donor enjoys a high payout rate later.

A deferred gift annuity is an excellent way to make a gift and receive a charitable income tax deduction while providing income for the future. Like the charitable gift annuity, the minimum gift amount is $5,000.

Summary of Financial Benefits:

• Lifetime income stream – payments are fixed and a portion is nontaxable
• Charitable income tax deduction for a portion of the gift
• Reduced capital gains taxes
• Membership in our donor society
• Recognition on The Foundation’s Wall of Honor


CHARITABLE REMAINDER TRUSTS

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A charitable remainder trust is a personal management plan that provides both a lifetime income and a charitable income tax deduction to the donor. The donor selects the payout rate, usually between 5% and 7%, which gives the donor, and perhaps the donor's spouse or other beneficiary, an income every year for life. The higher the payout rate, the lower the charitable income tax deduction. If the trust is funded with appreciated securities, capital gains taxes are avoided. The trust may be designated to benefit a particular department or program at The Broward Education Foundation or it may be unrestricted.

There are two types of charitable remainder trusts: the annuity trust and the unitrust.

The charitable remainder annuity trust pays a fixed, guaranteed dollar amount, regardless of the trust's investment performance. The income rate is determined at the time the trust is funded. The annuity trust is best for donors who seek a regular, fixed income and prefer to have the satisfaction of knowing the exact amount of the payment in advance. No additional gifts may be added to an annuity trust.

The charitable remainder unitrust pays the donor a predetermined percentage of the fair market value of the trust's assets as re-valued annually. If the trust's assets increase, the donor receives a larger payment, providing a hedge against inflation. Additional contributions may be made to a unitrust.

Summary of Financial Benefits:

• Lifetime income stream—payments can be fixed or variable, depending on the type of trust
• Charitable income tax deduction for a portion of the gift
• Avoidance of capital gains taxes on the transfer of appreciated property
• Possible estate tax benefits
• Membership in our donor society
• Recognition on The Foundation’s Wall of Honor


CHARITABLE LEAD TRUSTS

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Charitable lead trusts are the reverse of charitable remainder trusts in that a stream of income is first paid to The Broward Education Foundation for a number of years (based on a term or a lifetime), after which the remainder goes back to the donor or passes to another non-charitable beneficiary designated by the donor. The stream of income that flows to The Broward Education Foundation is either a fixed amount or a percentage of the value of the trust property, as revalued annually.

A charitable lead trust is a fully taxable trust; the trust pays both income and capital gains taxes, unlike the charitable remainder trust that is tax-exempt. A donor is entitled to a charitable income tax deduction if the donor continues to be taxed on the trust income.

Many donors use a charitable lead trust to reduce or eliminate the gift tax cost of transferring wealth to children or grandchildren and to give appreciated property to heirs without further gift or estate tax liability. A charitable lead trust can be established during a donor’s lifetime or by a provision in the donor’s will.