Planned Giving

People often tell us, I wish I could give more. The truth is that there are many ways friends can do more if gifts are carefully planned. The term “planned giving” refers to charitable gifts that require some financial, estate and tax planning before they are made. Planned gifts are popular because they can provide valuable tax benefits and/or income for life while helping a person positively impact organizations they support.

What are the potential benefits of planned gifts?

  • increase current income for yourself or others
  • reduce your income tax
  • avoid capital gains tax
  • pass assets to your family at a reduced tax cost
  • make significant donations to the Northwest College Foundation

For more information, please call 800-498-3914. We also recommend that you consult with your tax or legal advisor before making a planned gift.

Types of
planned gifts

When a donor names the Northwest College Foundation as a beneficiary in a will, it is a bequest. The donor’s estate will receive a charitable estate tax deduction when the gift is made.

In return for a donation of cash or securities, the foundation agrees to pay a fixed payment for life to the donor or to a friend or family member of the donor’s choosing. The donor can claim a charitable tax deduction. If a donor funds a gift annuity with long-term appreciated property, the donor will have to report only some of the capital gain, and may be able to report it in installments over many years.

Income from a gift annuity can be deferred for a period of years. Deferred gift annuities are often set up by younger donors to supplement retirement income.

This trust makes payments, either a fixed amount (annuity trust) or a percentage of trust principal (unitrust), to whomever the donor chooses to receive income. The donor may claim a charitable income tax deduction and may not have to pay capital gains tax if the gift is of appreciated property. At the end of the trust term, the foundation receives whatever amount is left in the trust.

Charitable remainder unitrusts provide some flexibility in the distribution of income, and thus can be helpful in retirement planning.

This trust makes payments, either a fixed amount (annuity trust) or a percentage of trust principal (unitrust), to the foundation during its term. At the end of the trust term, the principal can either go back to the donor (a grantor lead trust) or to heirs named by the donor (a non-grantor lead trust). The donor may claim a charitable income tax deduction for funding a grantor lead trust or a charitable gift tax deduction for funding a non-grantor lead trust. Since lead trusts are typically used to pass assets to heirs, non-grantor lead trusts are far more common than grantor lead trusts.

A donor may make a gift of a personal residence or farm to the foundation and retain the right to live there for the remainder of his or her life. The donor receives an immediate income tax deduction for the gift. At the donor’s death, the foundation can use or sell the property.

A donor can give a life insurance policy to the foundation or simply name the organization as the beneficiary. For the gift of a paid-up policy, the donor will receive an income tax deduction equal to the lesser of the cash value of the policy or the total premiums paid. To qualify for the federal charitable contribution deduction on a gift of an existing policy, the foundation must be named as owner and beneficiary.

Retirement accounts are often exposed to income taxes and estate taxes, at a combined marginal rate that could rise to 75 percent or even higher on large, taxable estates. Naming the foundation as the beneficiary of an IRA, 401K, Keogh or other retirement plan can result in favorable estate tax reductions.

The Trapper Legacy Society recognizes NWC alumni and friends who have made an estate commitment or a deferred gift to the foundation. Members will receive an invitation to our annual Foundation Gala, a Trapper Legacy Society pin, and special listing in the foundation’s Honor Roll of Giving, unless you wish to remain anonymous.

Anyone who has made an estate provision that includes the foundation, and who wishes to become a member of the Trapper Legacy Society, is asked to inform the foundation in writing. The size of the eventual gift does not need to be disclosed at that time.