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Overview (see also, Endowment Resolution)
There are many Trinity members who have already discovered the power of giving. They have found that there are organizations throughout the area that are providing wonderful programs and services that enhance the quality of life for all of us. They know these organizations, whether they give children a place to play and learn, or provide shelter for the homeless, or enrich our lives through the arts, or help the disabled lead fuller lives, or provide medical services, count on their generosity to carry out their missions. They also know the satisfaction that comes from supporting organizations that enhance the quality of life for all of us.
What is an Endowment Fund?
Stated quite simply, an endowment fund is a way to ensure that your gift provides revenue for your desired charitable purpose forever. The concept is as ingenious as it is simple. A gift to an endowment fund is never spent. Instead, it is invested; each year a portion of the earnings is made available to be spent for charitable purposes through grants. The remaining portion of the earnings is returned to the fund to increase the fund’s value and provide for future spending. Over time, the amount of money available for grants will far exceed the value of the donor’s original gift. And because the gifts into the fund are never spent, the fund will provide support for the charitable cause forever.
How Does an Endowment Fund Work?
When a donor starts a fund, it is invested to grow in value. Every year some of its growth is used to provide charitable grants and the rest is retained as a hedge against inflation. The resulting endowment grows over time.
Ways to Give
You may choose to give to an existing endowment fund or create a new one. Gifts of all amounts are welcomed. Trinity’s Endowment Fund offers a variety of tools and gift vehicles for those who wish to provide for the future of Trinity Presbyterian Church and to create a lasting legacy. The most widely used include:
Cash Gifts (see the link at the top of the page to donate on-line)
You may make a contribution of any size to Trinity’s Endowment Fund. Whether in honor of or in memory of a friend or loved one, or to meet personal charitable wishes, cash gifts help the Endowment Fund grow and expand its support of the community.
Publicly Traded Securities
Contributions of securities are attractive to people who have held stocks or bonds for a long period of time. Gifts of appreciated securities enable you to make larger contributions to the Endowment Fund at reduced cost to you, thereby benefiting you, the Endowment Fund and the community. Such gifts generate a double tax benefit. In addition to receiving an income-tax charitable deduction for the full fair-market value of the property, the donor escapes any potential tax on the capital-gain element in the gifted property. (Note: to qualify for this double tax benefit, the property must have been held for more than one year.)
Real Estate and Property
If held for more than a year, these gifts usually provide the same tax benefits as gifts of securities.
Gift Annuities
During their lifetimes, donors receive income from their gifts. Cash or appreciated securities are given to the Endowment Fund and the donor receives income for life. In addition to an immediate tax deduction, a portion of the income received is tax-free. After death, the remaining portion of the gift becomes a permanent fund within the Endowment Fund. Donors may offer direction about types of charitable programs or a particular charity the funds will support.
Bequests
A testamentary gift is a specific bequest in your will or testamentary trust. After providing for your loved ones, such a gift may be for a specific amount or a percentage of an estate’s value and are exempt from estate tax.
Charitable Remainder Trusts
These trusts are arrangements between a donor, a trustee and the Endowment Fund. The donor transfers cash, property or highly appreciated securities to the trust and can take an immediate income tax deduction. The donor retains the right to its income or specifies who is to receive the income and at what rate. After the death of the last income beneficiary, the Endowment Fund receives the remaining assets to meet the donor’s wishes by supporting Trinity.
Life Insurance
You may have owned a policy for years, but now the protection is no longer needed. You may donate the policy to the Endowment Fund and receive an immediate tax deduction, usually an amount equal to the cash surrender value. Or you may name the Endowment Fund as the owner and beneficiary of a life insurance policy in which the face value ultimately goes to the Endowment Fund. Your continued premium payments on the policy are also tax-deductible.
Retirement Plan Assets
These assets may be a particularly effective way to fund a charitable bequest. Depending on the size of your estate, income and estate taxes may consume a large portion of this asset. Naming the Endowment Fund or a Charitable Remainder Trust as the beneficiary for all or some of the assets remaining in your plan at your death can substantially reduce or eliminate your tax liability.
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