With one gift to the RLACF you may recommend grants be made to any number of Non-Profit organizations or projects over any period of time. For each gift, you get one receipt for tax purposes and recognition from all recipients.
The Red Lodge Area Community Foundation (RLACF) fulfills the varied philanthropic interests of the donor by identifying and adapting to the changing needs of our community. Working as partners, we help to assure that the donor’s vision is fulfilled both presently and into the future.
Whether you are planning for year-end giving, or making a charitable bequest part of your estate plan the Red Lodge Area Community Foundation is here to make your job easier.
“Planned” gifts are part of estate and tax planning, and are usually made in consultation with financial and legal professionals.
A Donor generally makes a contribution from his or her assets or estate, rather than from current income
A Donor generally receives current income and tax benefits. The benefit to charity is deferred to a future time, usually at the death of the donor or the donor’s successor. See more explanation under planned gifts, below.
Montanans are generous people. We contribute to charitable causes of all kinds and we go the extra mile to help our friends and neighbors, making gifts of cash or services or contributing in-kind goods to causes important to us and to our communities.
However, there is another way we can support our communities’ Non-Profit organizations. A way which has not always been fully used by our state’s Donors but one which can be very effective. That way gives Donors access to income during their lifetimes, estate and tax planning tools, and builds the strength of our community charities. It is called planned giving.
Why Make a Planned Gift?
• To make a larger contribution to charity than is possible with an outright gift during the Donor’s lifetime
• To enhance the current income value of under utilized or marginally productive appreciated assets
• To minimize capital gains taxes resulting from the sale of appreciated assets
• To reduce estate and related taxes
• To increase annual income to meet living expenses or to increase charitable contributions
• To ensure that charitable intentions of Donors continue beyond their lifetimes
Who Should Make a Planned Gift?
• People in their retirement years who want to support charity, have non-productive assets and need increased income for retirement use or annual giving
• Individuals who want to reduce their taxes
• Younger donors who have made maximum contributions to their retirement plans, want to create additional retirement income, and want to help their communities while receiving current tax relief.
Revocable Planned Gift
The simplest and most common form of planned gift is made through the Donor’s Last Will and Testament. Making a bequest does not reduce current assets, but distributes them to charity after the death of the Donor.
• Existing wills can be easily modified with a codicil that specifies a dollar amount or percentage of an estate to go to charity
• The donor may cancel the bequest or change the beneficiary at any time until death
• Charitable bequests can help reduce estate taxes by reducing the size of the Donor’s estate
Making charities the beneficiary of retirement plans is also becoming increasingly popular. This is because the charity will not have to pay income taxes on IRA distributions which an individual beneficiary would have to pay.
Irrevocable Planned Gifts
These planned gifts are made from current assets through a trust or contract, and usually provide annual income for life to the donor and often a successor beneficiary, such as a spouse. At the death of the last surviving income beneficiary, the remaining amount of the gift goes to charity. Planned gifts are permanent. However, a Donor may reserve the right to change the charitable beneficiary to another tax-exempt beneficiary.
• Planned gifts are usually made by transferring appreciated assets, e.g. securities or land, which have substantially grown in value. The Donor’s tax deduction is based on the market value of the transfer date.
• Planned gifts may produce significant tax savings. They often help a Donor avoid or stretch out payment of capital gains taxes, earn federal and state income tax deductions, reduce the size of the Donor’s estate, and, if given to Red Lodge Area Community Foundation (RLACF) may be eligible for the Montana Endowment Tax Credit. The Montana Endowment Tax Credit allows Donors to pay less in Montana state income taxes when they give a qualifying planned gift to a Montana charitable endowment.
What Kinds of Planned Gifts Are There?
• Gifts which provide current or future income to the Donor with the remainder of the gift going to the Red Lodge Area Community Foundation (RLACF), e.g. Charitable and Deferred Gift Annuities, Charitable Remainder Trusts and Pooled Income Fund.
• Gifts that enable the donor to continue to live in their home or on a farm or ranch. At their death, the residence becomes the property of the Red Lodge Area Community Foundation (RLACF), i.e. a life estate
• Gifts which provide annual income to the Red Lodge Area Community Foundation (RLACF) with the remainder going to the Donor or heirs at the end of a specified number of years, e.g. Charitable Lead Trust
• Gifts of paid up life insurance, which can be used by younger people and those of mode means to make a substantial gift. This can be done by purchasing a new life insurance policy naming the Red Lodge Area Community Foundation (RLACF) as the owner and beneficiary
*Always consult with your CPA, Financial Advisor, or Attorney. This information is courtesy of Montana Community Foundation
From you I receive...to you I give...together we share...by this we live. - Polly McLean
