Planned giving offers donors a unique opportunity to support NARSOL’s Foundation while also securing income for themselves or their loved ones. Several giving vehicles are designed specifically to pay income to donors, blending philanthropy with smart financial planning. Here’s an overview of the most common income-generating planned giving options, how they work, and their key benefits.
Charitable Gift Annuities (CGA)
A Charitable Gift Annuity is a simple contract between you and NARSOL’s Foundation. You make an irrevocable gift of cash or appreciated assets (such as stocks), and in return, the Foundation pays you (or a designated beneficiary) a fixed income for life. After your lifetime, the remaining funds support NARSOL’s mission.
- How it works: You transfer assets to the Foundation, and in exchange, you receive regular, stable payments for life.
- Benefits:
- Guaranteed, fixed income-payments never fluctuate, regardless of market conditions.
- Immediate charitable income tax deduction for a portion of your gift.
- Potential to reduce capital gains and estate taxes.
- Satisfaction of making a lasting impact on a cause you care about.
Charitable Gift Annuities are ideal for donors seeking security and predictability in their retirement income while making a meaningful charitable contribution.
Charitable Remainder Trusts (CRTs)
Charitable Remainder Trusts come in two main forms-Annuity Trusts and Unitrusts. Both allow you to make a significant gift while retaining income from the donated assets.
- Charitable Remainder Annuity Trust (CRAT):
- You contribute cash, securities, or other assets to an irrevocable trust.
- The trust pays you (or another beneficiary) a fixed dollar amount annually for a set term or for life.
- After the trust term, the remaining assets go to NARSOL’s Foundation.
- Benefits include a steady, predictable income, immediate tax deduction, and potential avoidance of capital gains on appreciated assets.
- Charitable Remainder Unitrust (CRUT):
- Similar to a CRAT, but instead of fixed payments, you (or your beneficiary) receive a percentage of the trust’s value, recalculated annually.
- This means payments may increase over time if the trust’s investments perform well.
- Offers flexibility and a hedge against inflation.
CRTs are well-suited for donors who want to make a major gift, receive income, and potentially reduce taxes, all while supporting NARSOL’s future.
Pooled Income Funds (PIFs)
A Pooled Income Fund operates much like a mutual fund managed by NARSOL’s Foundation. Your gift is combined with those of other donors and invested. You, or your chosen beneficiaries, receive a proportional share of the fund’s income for life. After your lifetime, your share of the fund is used to advance NARSOL’s mission.
- How it works: You contribute cash or securities to the fund, receive variable income based on the fund’s performance, and claim an immediate charitable tax deduction.
- Benefits:
- Income stream for life, which may vary based on investment returns.
- Immediate charitable tax deduction and potential capital gains tax savings.
- Remaining assets benefit NARSOL’s Foundation after your lifetime.
Pooled Income Funds are a great choice for donors interested in investment-based income and maximizing their charitable legacy.
Comparison Table: Income-Generating Planned Gifts
| Giving Vehicle | Income Type | Payment Amount | Tax Benefits | Remainder Benefits |
|---|---|---|---|---|
| Charitable Gift Annuity | Fixed for life | Determined by age/gift | Income tax deduction, capital gains | To NARSOL after death |
| Charitable Remainder Annuity Trust | Fixed for term/life | Set percentage of initial gift | Income tax deduction, capital gains | To NARSOL after term |
| Charitable Remainder Unitrust | Variable | % of trust value | Income tax deduction, capital gains | To NARSOL after term |
| Pooled Income Fund | Variable | Share of fund earnings | Income tax deduction, capital gains | To NARSOL after death |
Why Consider a Life Income Gift?
- Financial Security: Receive predictable or investment-based income for life or a set term.
- Tax Advantages: Immediate charitable deductions, potential capital gains and estate tax savings.
- Philanthropic Impact: Leave a legacy that supports NARSOL’s mission for years to come.
- Flexibility: Choose the giving vehicle that best fits your financial goals and charitable intentions.
If you’re interested in exploring these planned giving options, we encourage you to consult with your financial advisor or reach out to NARSOL’s Foundation for more information. Together, we can help you create a giving plan that supports your financial well-being and advances the cause you care about most.