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After a potential donor to Methodist University has determined
that he/she should consider a gift and the purpose toward
which the gift is assigned, the next consideration is how
the gift can be generated.
Obviously the most popular and logical answer to the "how"
question is a gift of cash or appreciated securities. These gifts
are, for the most part, available immediately to be used as the
donor suggests and are tax-deductible at the time they are made.
Often a gift or appreciated stock is particularly rewarding because
it serves as a two-fold tax savings. First, the donor normally avoids
capital gains tax on the increased value of the stock and second,
the donor typically receives an income tax deduction for the fair
market value of the stock.
Gifts of cash and/or appreciation securities can be used as support
for Methodist University's annual fund and for investment in any of
the other projects and programs. That is, the donor's gift may be
used in the operating budget and/or as support for scholarships,
endowments, naming opportunities and the other initiatives mentioned
In addition to the outright gifts described above, Methodist University
welcomes planned, deferred and estate gifts that may represent the
donor's desire to provide larger, penultimate-type gift arrangements.
- Gift of Property with Retained Right to Use:
A donor may gift his/her residence or other property to Methodist
University and continue to occupy same for lifetime of self and
spouse or for a set period of time. The donor typically receives
an immediate tax Deduction for the gift. Moreover, the property
will not be a part of the donor's estate. Similar arrangements
are available for a vacation home (or second home).
- Life Income Gifts:
A donor may make a life income gift to Methodist University and
receive income for the gift. Annuity trusts, unit trusts and gift
annuities are one of the many vehicles that are life-income gifts.
- Charitable Gifts Annuity:
Donor transfers assets to Methodist University and the College
agrees to make regular, fixed payments to donor for lifetime.
Benefits include: immediate tax-deduction and possible savings
on estate taxes and favorable capital gains tax consideration
when appreciated property is given.
- Deferred Charitable Gift Annuity:
Similar to above except donor(s) defers receipt of income
for a term of years even though there is immediate tax deduction.
May allow donor to receive tax deductions during high-income
years, yet defer income on annuity until income and tax bracket
- Charitable Remainder Annuity:
Donor creates a Charitable Remainder Annuity Trust with irrevocable
gift of cash, securities, or property to Methodist University.
Donor and/or designated beneficiaries receive fixed dollar
income, at least annually, for lifetime. May also be arranged
for a fixed period up to 20 years. Methodist University receives
assets after lifetime.
- Charitable Remainder Unitrust:
Similar to Charitable Remainder Annuity Trust in terms of
structure. However, the Unitrust pays a percentage of assets,
as valued annually, rather than fixed amount.
- Charitable Lead Trust:
Different from other trusts in that Methodist University receives
annual income for a specific period, after which assets return
to donor or, in most instances, to a child or family member
in next generation.
(IMPORTANT: DONOR SHOULD ALWAYS CONFER WITH ATTORNEY AND/OR
FINANCIAL ADVISOR BEFORE ESTABLISHING TRUST. Methodist University'S
PLANNED GIVING COUNCIL ALSO HAS EXPERTISE IN THESE GIFT ARRANGEMENTS.
ALL WILL EXCERCISE CONFIDENTIALITY IN DISCUSSING OPPORTUNITIES,
TAX BENEFITS AND OTHER ISSUES.)
- Life Insurance:
A gift of life insurance is a simple way to make a significant
gift to Methodist University. If the donor assigns ownership to
Methodist University there is an immediate tax deduction. With
paid-up policy the deduction is equal to replacement value, unless
value exceeds cost or pay basis. Then, deduction is limited to
tax basis. If premiums remain to be paid, donor's deduction is
equal approximately to cash surrender value. Donor, however, may
continue to pay premiums and be entitled to charitable contribution
- Wills and Bequests:
Perhaps the easiest and most popular procedure for a significant
deferred gift to Methodist University is through a codicil or
bequest in a donor's will. There are several types of gifts through
- Donor designates a specific gift to the College that may
be funded with cash securities or property.
- Donor provides residing bequest and assigns residue to Methodist
University after all other bequests have been made.
- Contingency bequests assign funding to Methodist University
only after other bequests fail to qualify for whatever reason.
- Donor may also make a bequest with a testamentary trust.
However, trust may only be for Methodist University (or other
charity) or for a charitable remainder or lead trust to meet
tax benefit requirements.