Trust DivisionThrough the Community Foundation of Warren County, a donor can create a personal philanthropic legacy tailored to his/her specific needs and interests. The fund may bear the name of the donor, a loved one, or it may remain anonymous. You may specify general or specific charitable purposes. Funds established during your years of employment can provide immediate tax advantages. Grants are awarded in the names of the donors’ funds to their designated charities.
You may choose from the following eight fund types:
2. Field of interest
3. Donor Designated
4. Donor Advised
7. Agency Endowments
8. Life and other planned gifts
1. Unrestricted These funds are typically created by visionary philanthropists with broad charitable interests. They offer current and future trustees of the Foundation maximum flexibility to respond to changing needs of the community, emergencies and to support the creation of innovative responses to community problems. Approximately 48% of gifts to CFWC are fully unrestricted or “Donor Advised” (see #4) and provide the Foundation with important flexibility. Donors who create one of our seven other types during their lifetimes can, if they choose, specify that their named fund become unrestricted after their deaths.
2. Field of Interest This fund allows a donor to support a particular broad charitable cause, such as education, the arts, health, youth or the disabled. The Foundation then seeks out worthy projects to support within this defined field of interest. Donors who create field of interest funds during their lifetimes often enjoy participating in the process of identifying worthy projects.
3. Donor Designated These funds are normally created to perpetually benefit one or more specific charities. Semi-annual grants will be made in the name of the fund for as long as the receiving organization remains in operation and is consistent with its original charitable purpose. If not, the Board may redirect distributions to a charitable interest reflecting the donor’s original intentions —“for good…forever.”
4. Donor Advised These funds are often an attractive alternative to the creation of a private foundation. Donors receive a tax deduction for the original, and any subsequent, gifts when made. Once the fund is established, the donors may designate deserving charities to benefit from fund income or, if desired, principal. Grants are then made, in the name of the donor’s fund, to the charities designated by the donor. Investments, paperwork and grant monitoring are all handled by the Foundation, with recognition flowing to the donor.
5. Geographic Donors whose charitable interests are limited to a particular geographic area within Warren County can establish geographically restricted funds to benefit those townships or communities.
6. Scholarships The Community Foundation of Warren County currently administers many different scholarships. These funds allow a donor to define a scholarship advisory committee and guidelines for candidate selection. The CFWC also has a standing Scholarship Committee, familiar with educational needs and requirements, which is available for this purpose. Scholarships can benefit a particular educational institution, field of study or be left to the discretion of the scholarship committee. Many individuals and professional advisors find the creation of a scholarship fund within a community foundation the simplest and most cost effective manner to fulfill the intentions of the donor.
7. Agency Endowments This type of fund is established when a non-profit organization agrees to transfer all, or part, of its endowment or assets to a self-designated fund within the Foundation. Individual donors can also establish agency endowments to benefit the charitable organizations of their choice.
8. Life Income and Other Planned Gifts Life income and other planned gifts create “win-win” opportunities for individuals and local charities. These may be created during one’s lifetime or by bequest. In most cases, the Foundation’s size, permanence, flexibility, and knowledge of local needs can provide value-added service to individuals considering this option. Contact your financial advisor for more information regarding life income and other planned gifts.
Most commonly used are these five life income and planned giving options:
1. Charitable Gift Annuity Trust
2. Charitable Remainder Annuity Trust (CRAT)
3. Charitable Lead Annuity Trust (CLAT)
4. Life Estate
5. Life Insurance
Should you wish to further explore any, or a combination, of these options, we invite you to contact the CFWC directly. Our Executive Director would be glad to provide you with further information, and would work closely with you, your accountant and/or financial advisor, in fulfilling your charitable intentions.
The following types of assets are commonly used for charitable giving:
2. Appreciated Securities
3. Mutual Funds
4. Real Estate
5. Tangible Personal Property
6. Life Insurance
7. Qualified Retirement Plan Assets
1. Cash Cash, usually in the form of a check, is the most common form for charitable gifts. Cash gifts enable donors to claim a current income tax deduction of up to 50 percent of their adjusted gross income in the year the gift is given with a five-year carry-forward period.
2. Appreciated Securities Donors who contribute long term appreciated securities to the Foundation get a double federal tax benefit. Gifts of appreciated securities are deductible at their full market value if they have been held longer than twelve (12) months. Fair market value is the average of the high and low trades on the date of the gift. The capital gains tax on the stock’s appreciated value (the difference between the stock’s cost and its present fair market value) is completely avoided. The fair market value of the donated stock qualifies as an income tax deduction up to 30 percent of the donor’s adjusted gross income, with a five-year carry-forward if required.
3. Mutual Funds These funds can be an excellent asset to contribute to the Foundation. The fair market value of a mutual fund is its public redemption price on the valuation date. Gifts of mutual funds are deductible at their fair market value up to 30 percent of the donor’s adjusted gross income, with a five-year carry-forward if required. The donor must hold the property more than a year prior to the gift to receive the favorable treatment.
4. Real Estate Gifts of real estate include a house or personal residence, farm, vacation home, commercial buildings, and income producing or non-income producing land. These gifts are deductible up to 30 percent of the donor’s adjusted gross income. The deduction must be in the year of the gift with a five-year carry-forward period if required. The donor must hold the property more than a year prior to the gift to receive the favorable treatment.
5. Tangible Personal Property Gifts of tangible personal property include art, antiques, collectibles, jewelry, rare books, stamp and coin collections, etc. When gifted to a public charity, these items are deductible at their full market value if the use of the property is related to the tax-exempt purposes of the charity. The donor must hold the property more than a year prior to the gift to receive the favorable treatment.
6. Life Insurance Gifts of life insurance allow donors to make a future major gift to the Foundation at a relatively modest cost. Donors can name the Foundation as the owner and beneficiary of existing policies that they no longer need. Alternatively, donors may purchase new policies and name the Foundation as the owner and beneficiary. This type of donation entitles the donor to a federal income tax deduction in the amount of the cash surrender value of the policy in the year the gift is made.
7. Qualified Retirement Plan Assets Retirement plan assets (such as IRAs) can make excellent charitable gifts. Qualified retirement plans enjoy favorable tax treatment prior to retirement, but are severely taxed at the death of the plan participant. Plans may be subject to income tax, estate tax and an excess accumulation tax, which can total 80 percent or more. Estate income taxes can be avoided if the plan participant makes a gift to charity at death by beneficiary designation.