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Understanding How Endowment Giving Works

An endowment gift is a way to perpetuate values or beliefs and make a critical difference in our community.  Endowment giving may be achieved by a direct gift, a bequest through an individual's will or by a deferred lifetime gift.  Whether you give during your lifetime or through a bequest, endowment giving offers tax benefits, free management services, and expert advice to help you and your advisors maximize your tax-favored charitable giving.  Your gift to an endowment may be structured to realize tax advantages and your personal financial objectives.  There are several techniques for making your endowment gift significant.

A Direct Gift provides immediate benefits from the income produced by the gift to the individual day school endowment foundation of your choice.

A Deferred Gift made through Income for Life Endowment Funds, provides you, your spouse or other loved ones with income payments during your lifetime and becomes an unrestricted endowment foundation for Jewish day school education after you're gone. These funds can be tailored to suit your personal needs, as you decide how the income will be distributed, to whom, and over what period of time. Charitable Remainder Unitrusts provide you and/or your loved ones with income, based on the annual value of the trust, for a specific period of time or for life.  Similarly, Charitable Remainder Annuity Trusts provide your beneficiaries with fixed income payments for a specific period of time or for life, Charitable Gift Annuities also provide fixed income payments, enhanced by special tax benefits.

In all cases, at the conclusion of the term of the trust or annuity, the remainder becomes part of the Unrestricted Endowment Fund - your personal legacy to the day schools whose services form the lifeblood of our community. Whether you choose to give a direct or deferred gift, you decide how your gift should be allocated.

Gift Planning Options
From direct gifts to bequests, many gift vehicles enable you to tailor a gift to meet your specific needs.  Most planned gifts receive favorable tax treatment, and all give you the satisfaction of investing in our community's future. The type of asset and the way you give are important factors in maximizing the tax advantages of your gift.  Gifts of cash and publicly traded appreciated stocks, bonds, and mutual funds are routinely received.  Gifts of real estate, private companies, life insurance, and qualified retirement accounts are also acceptable.

Gifts of Appreciated Stocks, Bonds, and Mutual Funds:
Gifts of appreciated assets that have been held for more than one year are fully deductible - based on the fair market value (FMV) of the gift.  Up to thirty per cent of your adjusted gross income for that year can be claimed as a deduction for the FMV of the gift, and any excess can be carried forward up to five additional years.  These types of gifts generally enable you to save twice - on federal income tax and capital gains tax.  You get a charitable deduction for the full FMV of the gift, and you can generally avoid the capital gains tax that would be due if you sold the appreciated asset.

Gifts Through a Will or Trust:
Gifts by will and/or living trust are an important part of philanthropy, often allowing individuals to make a gift to an institution that they cannot make during their lifetime.  These gifts are fully deductible for estate tax purposes, and a bequest may be included in a new will or added to an existing will through a simple codicil.

A specific bequest states a specific amount or asset to be donated to one or more endowment funds.  It may be a gift of cash, securities or a gift of real estate or tangible personal property.  A residuary bequest names a Day School Endowment Foundation to receive all or a percentage of the remainder of the estate, after all debts, taxes, expenses and other bequests have been paid.

Retirement Plan Gifts:
Retirement plan assets left to children, grandchildren and other beneficiaries at the death of the account owner are often subject to both income tax and estate tax.  In the highest income and estate tax brackets, 72% of all funds (72 cents on the dollar) may be taken in taxes.  With the growth in retirement and pension plan investments, many benefactors are now making a gift of their excess, or remaining, retirement funds when they are no longer needed.

At the turn of the new century, we face challenges that require our unwavering commitment to Jewish survival and the shared Jewish future of our children and grandchildren. 

The Day School Endowment Program will stand as a lasting testament to our divine, Torah rooted purpose - to leave this world better than we found it.  Join us as we light the candles by which future generations will learn.