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Give the Tree and Keep the Fruit
Make a gift that uses your asset to help a ministry of your choice, while you keep the income from the asset. Please contact us if you desire further assistance or explanation of these options by filling out our contact us form or calling 1-800-843-5233 any time between 7:45 a.m. - 4:15 p.m., CT, Monday through Friday.
- Gift Annuity/Deferred Gift Annuity
- This type of gift is appealing to older persons, as the income stream percentage from the charitable gift annuity is generally higher than returns on personal investments. A named ministry would be the final beneficiary.
- An individual gives securities or cash valued at $5,000 or more.
- A donor receives fixed income for life. The rate of income depends on the individual’s age upon first receiving the income stream.
- The income stream is divided into three types of income: tax-free (return of partial principal), capital gain (partial return of any capital gain), and ordinary income.
- A donor receives an immediate tax deduction for the future gift to ministry.
- If securities are given, a donor pays no capital gains tax at the time of transfer.
- A Deferred Gift Annuity has an initial funding threshold of $2,000.
- In a Deferred Gift Annuity, the funds are set aside now so that the donor may receive a high fixed rate of payment beginning at retirement or another future date.
- Charitable Remainder Trust
- This type of gift is suitable for an individual who has appreciated assets (securities or real estate) and does not wish to incur capital gains on the sale of the asset. Also appealing is the possibility of a higher stream of income. In the case of real estate, property management issues are eliminated. A named ministry would be the final recipient of the trust balance.
- An individual may give securities or cash, valued at $20,000 or more, or give real estate valued at $40,000 or more.
- The donor receives a variable payment for life (fixed percentage return), any term of up to 20 years, or for life plus a term of 20 years, for a Charitable Remainder Unitrust (CRUT).
- Conversely, the donor receives a fixed payment for life or a term of up to 20 years for a Charitable Remainder Annuity Trust (CRAT).
- The payment must be a minimum of 5% of the trust’s annual value (for a CRUT) or a minimum of 5% of the trust’s initial value (for a CRAT).
- For securities or real estate, there is no capital gains tax at the time of transfer.
- Usually, a CRAT does not receive real estate.
- A donor receives an immediate tax deduction for this gift.
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- Pooled Income Fund
- This type of instrument is suitable for the donor who wishes to realize income yields off of a charitable fund pool. (An analogous entity would be that of a mutual fund.) After the term of the individual fund agreement, the balance assigned to that donor is given to the designated ministries named in the agreement.
- An individual may give securities or cash valued at $1,000 or more.
- The donor receives all income earned from his/her share of the fund.
- The agreement lasts for the donor’s life and/or the life of the beneficiary.
- A donor receives an immediate tax deduction for this gift.
- If securities are given, there is no capital gains tax at the time of transfer.
- Testamentary Remainder Trust/Pour Over Unitrust (POUT)
- This type of gift is suitable for a donor who desires that his/her heirs do not receive a lump sum inheritance but rather a stream of income for a predetermined amount of years. A named ministry would receive the final balance of the trust.
- A donor can create a trust during his/her life, but it is not significantly funded until the donor’s death.
- In the will/living trust or beneficiary designation forms, some of the donor’s assets ($20,000 or more) “pour over” into this trust at death. This is called a “Pour Over Unitrust.”
- This trust will provide income to surviving family for up to 20 years.
- The arrangement is revocable, which means that the agreement can be changed, revised or eliminated while the donor is still alive.
- Reserved Life Estate
- This type of gift is suitable for a person who wishes to make a gift to ministry of a large asset (their home or farm) but wishes to retain use of that asset for his/her life.
- A donor can give the remainder of a residence or farm (valued at $40,000 or more) while continuing to use the property for life.
- The donor must sign maintenance, insurance and tax agreements to make clear that he/she is responsible for expenses during his/her life.
- There is an immediate tax deduction for this gift.
- Probate and estate tax savings can also be realized as the real estate goes to ministry (by contract) upon the death of the donor.
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