Planned Giving:  Gifts that Pay The Community Foundation and Preserve Assets for Heirs


There are three types:

Charitable Lead Trust
A Charitable Lead trust allows your clients to contribute income to their Community Foundation fund for a fixed number of years.  They will make payments immediately (in a fixed amount or a percentage of the assets) to a fund at The Community Foundation.  In the most common type of Charitable Lead Trust, when the trust's term expires the remaining assets are returned to your clients or to their beneficiary.

In short, Charitable Lead Trusts are an excellent vehicle for making an immediate gift to a donor advised fund at The Community Foundation while allowing your clients to transfer assets to others after a period of time free of estate and gift taxes.



Beneficiary Designations:  Life Insurance and Retirement Plan Assets
One of the easiest ways to make a substantial gift is to donate a life insurance policy.  Your clients may give a policy that's no longer needed, take out a new policy or name The Community Foundation as a beneficiary of an existing policy.  What's more, a gift of life insurance can translate into valuable income- and estate tax savings.

Retirement plan assets that pass to your clients' heirs can be subject to exhorbitant estate- and income taxes -- sometimes totaling more than 70% of the assets!  To avoid this, many donors designate The Community Foundation as the beneficiary of their retirement accounts, and direct other types of assets to their heirs.



Bequests:  Two Types
Bequests can be much more than a Last Will and Testament.  Your clients can specify a specific bequest amount, a percentage of your estate or identify a certain asset or assets for giving.  Name The Community Foundation as a "residuary beneficiary" of all or part of their estate after other bequests have been made.  Your clients also can designate The Community Foundation as a "contingent beneficiary" in case they outlive their bequest's other beneficiaries.

Bequest to an Agency Endowed Fund
Make a bequest to an Agency Endowment Fund (housed at The Community Foundation), which collects and invests contributions from multiple donors.  Earnings from the fund's principal are used to support the programs and/or operations of a nonprofit organization.  The Agency Endowment Fund frees small nonprofits from the administrative and investment burden of their assets.

Bequest Through a Charitable QTIP Trust
This second type of bequest can be made through a Charitable Qualified Terminable Interest Property (QTIP), which allows your clients to direct the income (and principal, if needed) from the trust to their spouses for his or her life.  At the end of the trust's term, the remaining assets pass to a fund of your clients' choosing at The Community Foundation.  If your clients create the trust to take effect at their death for the benefit of their spouses, the trust is completely free of estate- and gift taxes.

For More Information
Kenny Emson
Senior Vice President, development and Donor Services
(202) 263-4767
kemson@cfncr.org