A Disciples Overview of

Ways to Give

Ways to Give

ade in the image of God and in response to a God who provides in abundance including the gift of Jesus Christ we also are called to be givers. Making charitable contributions can be a creative process that adapts to our changing needs while providing an outward expression of thanksgiving. This booklet provides some brief explanations and processes so that, as a faithful Christian, you can make the best decisions on the types of gifts to provide for the church and for ministry. This guide will help you provide wonderful support for ministry while also illustrating personal benefits, including: Fulfilling personal philanthropic and legacy goals Making tax-efficient gifts and realizing benefits from reduced income taxes and bypass of capital gains taxes Providing the right assets to pass on to family members and heirs Receiving a stream of payments for life from a life-income gift. When considering any type of gift, it is important to consult your own financial and legal advisors.

Outright Gifts Today

gift of cash is the most common and easiest method of making an outright and immediate gift to the church or other charity. If you itemize your income taxes, your gift by cash, check or debit/credit card will let you receive a tax deduction for the full value of your gift. The annual limitation on the use of charitable deductions for cash gifts is 50% of your adjusted gross income. You must use the deduction to the fullest extent possible each year, with any unused amounts carried over for up to five additional years. EXAMPLE: If you are in the 33% marginal tax bracket, the net cost of a $1,000 gift is only $670 after your $330 federal tax savings. A gift of appreciated property, such as stocks or bonds or real estate, can be a popular alternative to cash. These gifts can generate an additional tax benefit: a charitable income tax deduction for the full-market value and avoidance of any tax on the capital gains. Note: To qualify for this additional benefit, you must have held the property or securities for more than one year. EXAMPLE: John bought some stock two years ago for $2,000. Today, the stock is valued at $20,000. Because John is in the 33% tax bracket, his gift to the church of the stock provides him with a $20,000 deduction, saving him $6,600 in income tax. In addition, John does not have to pay taxes on the $18,000 gain on the appreciation, saving him $2,700 more in taxes. The
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net cost of this $20,000 gift is $10,700. The full fair-market value of a gift of long-term appreciated property is deductible up to 30% of your adjusted gross income. The same five-year carryover applies to these 30% gifts. A gift of tangible property, such as an antique or special Bible or candlesticks, in some cases, may be an appropriate gift for the church. However, these types of gifts must follow the standard for related use. If the use of the contributed property is related to the exempt purpose of the charity, the donor is entitled to a charitable deduction on the fairmarket value of the property, subject to the 30% ceiling. If the use of the contributed property is unrelated to the exempt purpose of the charity, and the charity would sell the property and use the proceeds, the donor is only entitled to a deduction for the actual original cost of the item. It is important to check with tax and legal advisors before contributing tangible personal property.

Christian Stewardship involves not only giving the tithe, but also saving and investing for the future (not eating all the sheep) and equipping and blessing future generations.
Anonymous

Planning for Future Giving

hile outright gifts to the church are an important part of our financial stewardship, Scripture reminds us that we also have an obligation to future generations of Christians. Putting a plan in place that provides for a future gift at the end of our earthly lifetimes provides a legacy to those who will follow in the faith.

The Will or Living Trust

One of the best ways to make a gift can be to include the church in your estate plans, either through your Last Will & Testament, or through a Living Trust. These gifts, taken from your estate at your death, provide a lasting sign of your faithfulness to your family and generations to come. While drafting these documents can be daunting at first, you are actually helping your loved ones by creating a plan that distributes your assets as you wish. When you include a gift to the church, your bequest goes to the church free of tax. You can give a specific amount, a percentage of your estate, or even a specific asset. Plus, by giving tax-burdened assets to the church, you have the opportunity to bequeath other assets to your surviving loved ones. A will or living trust allows you to: Provide for your family Determine the guardian(s) for any minor child(ren) Distribute your assets according to your wishes Save on possible estate taxes
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 Leave a legacy to the church without giving up assets during your lifetime. To make sure your goals are accomplished, you should obtain professional legal counsel from an attorney who specializes in estate planning. You may want to complete an inventory of your estate before meeting with your legal professionals. To receive a free inventory workbook, contact the Christian Church Foundation at (800) 668-8016 or at www.christianchurchfoundation.org.

Retirement Plan Assets

Most retirement plan assets, such as traditional IRAs and other employee benefits that allow pretax contributions, can be heavily taxed when left in the estate at your death. Any amount remaining in a retirement plan account may be subject to estate tax and income tax. If you can make other provisions for your family, the most tax-effective option would be to use your retirement plan assets for your charitable giving to the church. The church, because it is a tax-exempt charity, would not have to pay income taxes on your gift of retirement plan assets. Additionally, the value of the gift of your retirement assets could qualify for an estate tax charitable deduction. Putting this into place is simple: Instruct the administrator of your retirement plan of your intentions and complete whatever beneficiary assignment form is required. If it is a plan you administer personally, notify the custodian in writing and keep a copy with your other valuable papers.

Choosing The Option Th

Your Gift Outright Gift of Cash Outright Gift of Securities Outright Gift of Personal Property

Gift Retirem Asse

Your Goal

Make a quick, easy and immediate gift

Avoid tax on capital gains from appreciated securities

Share your collection or other personal item

Avoid taxation assets he tradition IRAs an other employe benefit p

How to Make a Gift

Contribute Write a appreciated check or stock or make a cash securities donation held for now more than one year

Donate tangible personal property related to the taxexempt function of the church

Name th church a whole o partial b ficiary o remaind assets af lifetime

The Benefits

Immediate income tax Immediate deduction income tax deduction Property removed Property from removed estate from estate Avoids capital gains tax

Charitable income tax deduction based on the full market value

Allows to make a future from tax assets, a lowing y to pass m tax-effec assets to heirs

hat Matches Your Goals

Gift of Life Insurance Gift of Real Estate
Make a gift of property no longer needed and generate an income tax deduction

of ment ets

Charitable Charitable Gift Remainder Annuity Trust

Make a gift and receive steady payments for life that are partially tax free

Transfer n on paid-up poleld in icy that is nal no longer nd necessary for family ee needs. plans

Make a gift and secure a stream of income

Transfer ownership of unneeded he policy for as the immediate or Donate the tax beneproperty to deduction of the the church or change der of beneficiary fter to church for charitable legacy

Establish a charitable gift annuity contract with the Christian Church Foundation that pays a set amount for life

Create a trust that pays income annually; the principal is retained and at the end of the term of the trust, the gift flows to the church

s you e the gift xable alyou more ctive o

Current income tax deduction when ownership changes Future flexibility when beneficiary is the church

Partial in Immediate come tax income tax deduction deduction Fixed Reduction payments or eliminafor life of tion of capione or two tal gains tax persons

Variable or fixed income for life Immediate charitable income tax deduction

Life Insurance as a Gift

Individuals purchase life insurance policies for a variety of reasons, including a way to provide for family members in case of an untimely death or to cover outstanding debts and funeral expenses. If the reasons the policy was originally purchased are no longer valid, or if all of the coverage provided is not needed, the life insurance policy can be a good gift to the church. By making the church the owner of the policy, you will receive a charitable income tax deduction for the policys fair market value or cost basis, if lower, on the date of the gift. If you name the church as the beneficiary of all or part of the policy, while retaining its ownership, you will receive an estate tax deduction for the insurance proceeds that come to the church.

Life-Income Gifts
Tax laws in the United States provide incentives so that individuals will consider planned gifts for charities. Some of these gifts are called life-income gifts because they have the ability to pay the donor or other individual(s) for life, or a set term of years, with the charitable residual at the end of life or term directed to the church. The two most common are the Charitable Gift Annuity and the Charitable Remainder Trust. Note: The Christian Church Foundation, on behalf of the Christian Church (Disciples of Christ), administers Charitable Gift Annuities and Charitable Remainder Trusts. Both of these instruments have minimum gift requirements and necessitate completion of certain forms. Because
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the Foundation was established to facilitate these types of gifts, Foundation staff have expertise in gift administration and compliance with various legal and state requirements. To learn more or to receive a free, confidential proposal, contact the Foundation at (800) 668-8016 or at www.christianchurchfoundation.org. You are encouraged to seek your own legal and financial counsel before completing any planned gift.

Charitable Gift Annuity

The Charitable Gift Annuity is a contract between a charity and a donor. In exchange for an irrevocable gift of cash or appreciated securities, the charity contractually agrees to pay the annuitant a set percentage of the value of the original gift. The maximum percent payable is determined by the American Council on Gift Annuities and is set by the age of the annuitant at the time the contract is established. Donors also may select a lower payout rate that will likely result in a larger gift for charity at the termination of the contract. Key elements of a Charitable Gift Annuity include: A gift annuity can be completed for one individual or two. Gift annuity payments are guaranteed for as long at the annuitant(s) is (are) alive. At the death of the last annuitant, the charitable remainder goes to the church or other charitable beneficiary identified by the donor. The older the annuitant when the contract is issued, the higher the payment rate. The payment amount is fixed. Because the charitable gift annuity is part gift and part annuity, the donor receives a charita9

ble income tax deduction for part of the gift. During the annuitants normal life expectancy, a portion payments is considered a return on principal and may be free of tax. If appreciated securities are used to fund the charitable gift annuity, a portion of the capital gains tax can be bypassed. Note: The minimum gift amount for a charitable gift annuity with the Christian Church Foundation is $2,500. EXAMPLE: Ralph and Sally, both 79, funded a Charitable Gift Annuity using $20,000 from a Certificate of Deposit that was paying about 2%. At their age, the Charitable Gift Annuity payout rate is 6.1%, providing them with $1,220 annually, some of which is free of tax. In addition, they receive an immediate tax deduction of $7,930. When either Ralph or Sally dies, the payments will continue to the survivor for the rest of his/her life. When the survivor dies, the charitable remainder estimated to be about half of the initial gift annuity contract goes to the church ministry of their choosing.

Deferred Charitable Gift Annuity

A deferred charitable gift annuity is very similar to the regular gift annuity, except the start of the payments is delayed to a specific future date. This type of plan may be useful for a person wanting to make a gift but wanting to use the future payments to enhance retirement income.

Charitable Remainder Trusts

The Charitable Remainder Trust provides significant financial- and estate-planning flexibility.
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Property cash, securities or real estate is irrevocably transferred under a legal trust agreement that specifies how and when trust income and principal are to be distributed. The trust may be created to become effective during life or at death (testamentary). Under certain circumstances, additional gifts may be added to the trust. The charitable remainder unitrust provides a variable stream of payments to the beneficiary(ies). The payout rate must equal a fixed percentage of at least 5% of the fair market value of the trust, which is revalued annually. The payout rate is usually 5-7%. The trust may be set up for lifetime(s), or for a fixed term not to exceed 20 years. At the end of the term of the trust, the remainder goes to the church or other charity identified by the donor. Note: Charitable Remainder Trusts are legal documents, and require assistance from appropriate legal counsel. The Christian Church Foundation provides legal boilerplates to legal counsel to help in creation of these trusts. The minimum gift for a Charitable Remainder Trust with the Foundation is $100,000. Charitable Remainder Trusts provide a great deal of flexibility because of the variations available. You should always consult your own legal and financial advisors when contemplating this and other charitable gifts. To receive a free, confidential Charitable Remainder Trust proposal, contact the Foundation at (800) 668-8016 or at www.christianchurchfoundation.org.
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Planned Gifts & Permanent Funds

he Christian Church Foundation encourages individuals to express their Christian faith by being good stewards of their accumulated assets and putting an estate plan into place that will allow the churchs future ministry to expand. However, the Foundation also realizes donors may have multiple interests, or are fearful their congregation may not have the processes in place to be a faithful steward of these gifts. One solution is to create a named permanent fund at the Christian Church Foundation. Designed to fund ministry in perpetuity, the Foundation manages permanent funds on behalf of the whole church. Donors can complete a simple Permanent Fund Gift Agreement that allows them to name the fund and the charitable beneficiary(ies) of the income distributions from the fund. The beneficiary can be a single congregation or multiple ministries or institutions of the Christian Church (Disciples of Christ). The fund can be started and gifts added during lifetime, or the Foundation can be named the charitable beneficiary of a bequest or life-income gift. A permanent fund can be started with a minimum of $1,000. To learn more about establishing a named permanent fund, contact the Foundation at (800) 6688016 or at www.christianchurchfoundation.org.

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The Christian Church Foundation helps Disciples make a difference forever and discover the joy of serving Christ through sharing their resources.
The Christian Church Foundation is not a legal, tax, investment or accounting consultant. We encourage you to seek the services of appropriate professional advisors.

130 East Washington Street P.O. Box 1986 Indianapolis, IN 46206-1986 (317) 635-3100 (800) 668-8016 FAX (317) 635-1991 www.christianchurchfoundation.org
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