The financial benefits of planned giving
In addition to helping Perkins School for the Blind and the children we serve, planned giving can generate income for you or your family. For more information about planned giving and Perkins, contact us or call 617-972-7328.
If income is one of your goals, consider these options:
Life income gifts
Charitable Gift Annuity
A gift annuity is an agreement between you and Perkins School for the Blind. In return for a gift of cash or other assets, Perkins agrees to pay a fixed payment for life to you or a friend or family member of your choosing. Rates are based on age and currently range from 5.0% for age 60, the minimum age, to 9.5% for ages 90 and above. Rates are subject to change. Please contact us to find your rate. If you are not yet 60 years old, you may want to consider the Deferred Charitable Gift Annuity, which also offers very attractive rates of return.
You can claim a charitable tax deduction. If you fund a gift annuity with long-term capital gain property, you will only have to report some of the gain, and may be able to report it in installments over many years. Income from a gift annuity can be deferred for a period of years. Deferred gift annuities are often set up by donors to supplement retirement income.
A deferred gift annuity is a contract between you and Perkins School for the Blind. You contribute cash or securities to Perkins, and in exchange, Perkins agrees to pay you, or an annuitant, a fixed sum for life. But with a deferred gift annuity, you can specify the date upon which you or your annuitant begins to receive payments, thus giving you the opportunity to generate supplemental income for yourself or your annuitant upon retirement. Deferring income over time generates an annual payment that is often considerably higher than it would be for an immediate-payment gift annuity.
While a deferred charitable gift annuity allows you to defer your annuity payment until needed, you can still enjoy the tax benefits associated with a charitable gift annuity in the year of your gift. Both the tax deduction and the level of annuity payment increase with the length of the deferral.
Charitable Remainder Trusts
Charitable Remainder Trusts are flexible vehicles that allow you to make a charitable gift but retain an income stream (for yourself and/or others) for life or a fixed number of years. At the end of the term of the trust, the remaining trust assets pass to a permanent named fund at Perkins School for the Blind. These trusts are particularly well suited for gifts of cash and appreciated securities or other assets such as real estate or securities producing little or no income. Because the trust is tax-exempt, it can sell the asset without incurring capital gains tax and reinvest for higher yield. This flexible gift planning strategy is best suited for gifts of $100,000 or more and can be established during life or by will.
Charitable Remainder Annuity Trusts
A Charitable Remainder Annuity Trust pays the beneficiary you designate a fixed dollar amount, which is determined when the trust is established. Payments must be at least 5 percent of the trust's initial value and are made from trust income, or trust principal if income is not adequate. You can claim a charitable deduction on your income tax the year that you create the trust. When the annuity trust term ends, the trust's principal passes to Perkins School for the Blind, to be used for the purpose you designate. You may make a gift of cash, appreciated securities or property to set up the trust, either during your lifetime or through your will.
Charitable Remainder Unitrust
A Charitable Remainder Unitrust pays the beneficiary you designate a fixed percentage of the principal of the trust assets (revalued annually). As a unitrust donor, you irrevocably transfer assets, usually cash or securities, to Perkins School for the Blind. You will receive an immediate income tax deduction for a portion of your contribution to the unitrust, and savings on capital gains taxes. The unitrust provides you with the flexibility to make additional gifts to the trust and can provide income for life, which can grow as the funds invested in the trust grow. The percentage payout rate is determined at the time the trust is funded. When the unitrust term ends, the principal passes to Perkins, to be used for the purpose you designate.
Endowments are used to secure the future of Perkins School for the Blind by providing support for students, teachers and academic programs in perpetuity. When you establish an endowment, the funds are invested and only income from the investment is used. This preserves your original gift in perpetuity, guaranteeing your impact on Perkins for generations to come. For this reason, many donors name endowments to honor a family member, to preserve the name of a family foundation, or to create a personal legacy. You can specify how you want the endowment to be used.
The minimum size gift to establish an endowed named fund is $100,000, which can be pledged over a period of five years. You may use either outright or deferred gifts to establish named endowed funds. Planned gifts are especially appealing to individuals who would like to see their support of Perkins endure beyond their lifetime. An endowment can be established through a bequest in a will or living trust, by naming Perkins as a beneficiary to a retirement plan or life insurance policy, through a charitable gift annuity or via a charitable remainder trust. All these methods yield tax savings.
Charitable Lead Trusts
Often considered the reverse of a remainder trust, the charitable lead trust makes annual payments of income to a charity like Perkins School for the Blind. These payments are generally made for a fixed term of years, usually 10 to 25. When the trust terminates, the trust principal plus any appreciation is transferred to your children, grandchildren or other loved ones.
You receive a federal estate tax deduction equal to the estimated value of the annual trust payments to Perkins. Cash or appreciating assets are ideally suited to fund a charitable lead trust because any appreciation in the assets during the term of the trust is not subject to additional estate tax. As a result, you are often able to give your heirs a larger estate after tax than otherwise would be possible.
Donor Advised Funds
A donor advised fund (DAF) is a charitable giving program that allows you to combine favorable tax benefits with the flexibility to support your favorite causes. To establish a DAF, you make a gift of personal assets (cash, stock and other assets) to Perkins School for the Blind, which qualifies you to receive an immediate tax deduction. Your gift will be placed into a donor-advised fund account, where any investment growth is tax-free. Whenever you choose, you can make a grant from your DAF to Perkins. A DAF can be created on behalf of an individual, family or organization. It is a great way to begin or continue a family tradition of philanthropy.