National Ground Water Association

Planned giving options information

Outright gifts

• Cash — The most frequently used asset for all forms of charitable gifts.
• Marketable securities — Appreciated securities may be given with substantially reduced after-tax cost to the donor.
• Real estate — Due to historically rapid escalation in values and the capital gain exposure of the owner, real property is quite frequently used to make a planned or charitable gift.
• Tangible personal property — Special rules apply about the appraisal of such property, but with the rapid appreciation in collectibles, such property is increasingly used for charitable gifts.
• Life insurance — Life insurance policies that are no longer needed for family security or for their original purpose, form an excellent basis for establishing a planned gift, and when transferred irrevocably, result in tax deductions approximating replacement value. A new life insurance policy based on the more recent interest-sensitive insurance will create a much larger gift than imagined, and payment of premiums through a charitable organization are tax deductible.

Gifts of income and remainder interests

• Charitable gift annuity — The donor receives a fixed amount for life based on age, with a charitable deduction.
• Pooled income fund — The donor receives a life income from an investment fund composed of the donor's gift pooled with other gifts. Income is a variable amount based on pooled funds that may fluctuate. This is taxable.
• Charitable remainder annuity trust — The donor receives a fixed amount of income based on the asset's initial fair market value and beneficiary's needs, with a percentage minimum. The allowable charitable deduction is generally for a percentage of the initial gift amount and there is no capital gains tax if appreciated securities are used. NGWREF receives the remainder, which is whatever is left when the trust ends.
• Charitable remainder unitrust — The donor receives a variable amount of annual income based on a fixed percentage of changing market value of assets. While there is a percentage minimum, the actual percentage is based on the needs of the beneficiary. The charitable deduction is generally for a percentage of the gift amount.
• Revocable charitable trust agreement — As yearly income, the donor receives the total net earnings during the life of the trust. There are no income tax savings or deductions as the gift is not "completed" during the donor's lifetime.
• Charitable lead trust — Established to pay income to a charitable institution for a number of years, after which the principal reverts to the donor or heirs when the trust ends.

Gifts by will

• Outright bequests — Donors of modest means, as well as the wealthy, can make gifts from their estates by way of a will. This can be done when the will is written or revised, or by the addition of a codicil to an existing will. An outright bequest is one that passes at the time of estate settlement directly to the Foundation for its immediate use. It could be a definite amount of money, a fraction or percentage of the total estate, a fraction or all the residuary estate, or specific property.
• Bequests through testamentary trusts — Many estate planning objectives can be accomplished through the testamentary gift of a charitable remainder. This is especially useful when the testator wishes to benefit NGWREF by legacy, but is first obligated to provide for members of his family or other individuals during their lifetimes. A testamentary trust accomplishes both of these objectives.
• Contingent bequests — In drafting a will, it is usually desirable, after naming the primary beneficiaries, to specify NGWREF as the final contingent beneficiary.