You are probably familiar with the outright gifts donors make through the various appeal campaigns. Then there are the non-gifts, which cover grants and revenues from events, conferences, sale of t-shirts and other miscellaneous items, etc.
Sometimes donors make bequests in their wills or name the Foundation as beneficiary of a life insurance policy. These are always pleasant to receive and are considered planned gifts.
Another growing area of planned giving is charitable gift annuities and trusts. The USM Foundation manages charitable gift annuities, deferred charitable gift annuities, charitable remainder unit trusts (CRUT) and charitable remainder annuity trusts (CRAT). Below is a brief explanation of each of these giving instruments:
Charitable Gift Annuities: A charitable gift annuity is a simple contract through which a donor and/or his or her designated beneficiary is provided with a stream of fixed payments for life in exchange for a gift. With a Deferred Gift Annuity, the annuitant is allowed to receive payments at a future date predetermined by the donor. The date chosen must be at least one year from the contribution date, but the payout schedule offers the same flexibility as the Charitable Gift Annuity. The remaining funds are moved to an operating account or endowment account, based on the donor's wishes, upon the passing of the donor.
Charitable Remainder Unit Trust (CRUT): A Unitrust, also called a Charitable Remainder Unitrust or CRUT, requires that a fixed percentage (minimum 5%) of the annual value of trust assets be paid to the income beneficiary. For example, a CRUT with a value of $2,000,000 and a 5% payout would pay $100,000 to the income beneficiary in that year. If the investment performance for that year was 10% and the value of the trust on the valuation date was $2,200,000 the income beneficiary would receive $110,000 in that year.
Another benefit of the Charitable Remainder Unitrust is that it will allow for additional contributions. The Unitrust will generally produce higher amounts of income but a smaller tax deduction. Again, the remaining funds are moved to an operating account or endowment account, based on the donor's wishes, upon the passing of the donor.
Charitable Remainder Annuity Trust: A CRAT is a vehicle that entails a donor placing a major gift of cash or property into a trust. The trust then pays a fixed amount of income each year to the donor or the donor's specified beneficiary. When the donor passes away, the remainder of the trust is transferred to the charity.
If you are interested in any of these planned gift options for yourself or a family member or a potential donor, you should speak with your institution's Office of Institutional Advancement.