Major and Planned Giving

You make a gift to Denison, and in exchange, receive a fixed annual dollar amount for life. The principal remaining at your death would then pass to Denison.

Example: Anne Bateman, age 78, gives $10,000 in cash to Denison in exchange for a gift annuity. She receives an income tax deduction of $4,697, based on her age. She will begin receiving income checks of approximately $215 each calendar quarter for the rest of her life. When she passes away, the remaining principal will go to Denison.

This type of gift might appeal to you if you're in the 40- to 60-year age bracket, have a high current income, need to benefit now from a current tax deduction, and are interested in augmenting potential retirement income.

The deferred-payment gift annuity involves the current transfer of cash, marketable securities or, under some circumstances, tangible personal property or real estate, in exchange for which the charitable organization agrees to pay the donor an annuity starting at a future date — usually at the donor's retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.

You realize an immediate charitable deduction for the gift portion of each transfer to the deferred gift-annuity plan. A portion of each annuity payment, when the payments begin, will be a tax-free return of principal over the life expectancy of the annuitant. When appreciated, long-term, capital-gain securities are transferred, any reportable capital gain is spread out over the donor-annuitant's life expectancy.

Example: Dr. Evelyn Garwood, 45, decides to make annual cash contributions of $10,000 to Denison in exchange for deferred-payment gift annuities. Payments are to begin upon her retirement in 20 years and continue for the rest of her life.

The tax and financial benefits of this arrangement to Dr. Garwood are as follows: 

• She will receive an annual annuity payment of $25,070 to begin when she reaches the age of 65 and to continue for the duration of her life.
  
• She will be allowed charitable deduction totaling $111,922 over 20 years--which represents more than 55 percent of her total contributions of $200,000. (The annual deduction will vary from $6,499 for the first year to $4,349 for the last year.)
  
• Unlike a qualified retirement plan, there are no upper or lower limits on her contributions or other restrictive requirements on the design of the plan.

You create a trust, and income from the trust is paid to beneficiaries you specify. Beneficiaries receive income for life or for a specified number of years, and at the end of the trust term the assets of the trust pass to Denison.

Example: George and Mary Carlson purchased growth stock for $20,000 ten years ago. It is now valued at $100,000, but the annual dividends are only $1,500. Now that they are both age 65, they would like to augment their retirement income. To do this, they transfer the stock to a charitable remainder unitrust with a six-percent payout rate.

In the first year, they will receive a $6,000 payment — four times the dividends they have been receiving, and those payments will increase in time if the assets of the unitrust appreciate in value. Moreover, they avoid tax on their profit in the stock and they receive an income tax deduction of $29,391. In their 28-percent tax bracket, this saves them $8,229 in income taxes (28 percent of $29,391).

This type of trust is the converse of the Charitable Remainder Unitrust or Annuity Trust. Instead of paying income to non-charitable beneficiaries with the principal eventually passing to Denison, a Lead Trust pays the income to the University for a specified term of years with the principal eventually reverting to the donor or passing to other non-charitable beneficiaries. Under certain conditions the Lead Trust will generate an immediate income tax deduction. Please contact Denison for more information on the technicalities of this plan.

A Charitable Lead Trust is especially appropriate for donors who wish to transfer property to family members without the heavy gift and estate tax burdens incurred with a direct transfer or for those who wish to support Denison by transferring assets during high income years but have them returned for retirement. The minimum trust amount is $100,000.

This fund pools gifts (cash and securities) from donors for investment purposes, and beneficiaries receive a proportionate share of the net income earned by the fund for life. Denison receives the principal value at the death of the beneficiaries.

You may give the property to Denison while retaining the right to occupy the residence or operate the farm. Such a gift of a remainder interest provides an income-tax charitable deduction for the present value of the remainder interest that frees up tax dollars into spendable income without causing any disruption in the donor's lifestyle. In addition, this plan permits you to escape any potential capital-gain tax on the built-in appreciation.

Example: Sally Holloway, 75 and recently widowed, has lived in her present home for 25 years and has no plans to move. To obtain present tax relief without altering her lifestyle, however, she gives her home to Denison while retaining the right to live in the home for life.

At the time of the gift, the residence is appraised at $250,000. This gift arrangement will provide an income-tax charitable deduction of $113,608 (the value of the charity's remainder interest.) Since Sally's tax bracket is 28 percent, her total tax savings will be $31,810 (28 percent of $113,608). This is the amount by which her income tax will be reduced over the period she reports the deduction.

In the event she decides to move in the future, she will have several options: rent the property and collect the rent, give her life interest in the home to Denison in exchange for a stream of payments for life, or simply give her life interest outright and receive another deduction.