WHY OUR FOUNDATION ASKS FOR YOUR GIFTS
Charitable giving to the Missouri Slope Lutheran Care Center Foundation enables our organization to continue providing a high quality of care in the midst of future uncertainties. It is possible that operating shortfalls may occur since revenues are determined mostly by the North Dakota reimbursement system and Medicaid regulations. Your gifts may also be used to purchase “off-budget” equipment or to provide special opportunities for residents and staff. The financial support received through charitably-minded individuals to our foundation is greatly appreciated.
Originally organized in 1968, the M-Club Foundation assists the Care Center in attaining its overall mission by providing funds for specific equipment or projects. Donors may designate contributions in honor of a living person, a special event or in memory of someone.
Annual giving levels include:
Memorials and other gifts to honor individuals are always appreciated and provide a lasting tribute to your loved ones while at the same time meeting a worthy need.
PLANNED GIVING OFFERS MANY OPPORTUNITIES
For charitably-minded people, there are numerous planning arrangements available. Through careful gift planning, individuals can often increase their ability to benefit society. Planned gifts may help the individual achieve some or all of the following financial objectives:
- Increase annual income
- Supplement retirement income
- Reduce income taxes
- Reduce or eliminate capital gain tax
- Diversification of invested assets
- Management of invested assets
- Reduce estate taxes
- Replace gifted assets for heirs
CATEGORIES OF PLANNED GIFTS
There are a variety of “vehicles” and assets that are appropriate in various situations. Most planned gifts fall into three broad categories:
•Major outright gifts during life
•Irrevocable life income gifts
•Gifts which take effect at death of donor
MAJOR LIFETIME GIFTS
Typically, assets which have increased in value (and are held for over one year) are beneficial to give during one’s lifetime since the donor receives a double tax benefit. One can usually deduct the fair market value of the gifted asset, while avoiding a potential capital gain tax. For some individuals, an additional benefit is the removal of the asset from estate taxation.
Appreciated Stock and Securities
Many individuals have investment assets which are worth more than their “cost basis”. These assets, which include listed securities, mutual funds or even closely-held business interests, are excellent candidates for lifetime giving.
Farms, commercial and residential properties and “second homes” have often appreciated in value over time. Additionally, building depreciation deductions lower the owner’s cost basis, creating additional tax liabilities when the asset is sold. For these reasons, real estate gifts are often contemplated by well-advised donors.
Examples include stamp collections, automobiles, musical instruments and the like. As with real estate and closely-held business interests, there are appraisal requirements for larger gifts of personal property.
Many individuals find that they no longer need the protection offered by an “old” policy and will gift the policy to a non-profit organization. Alternatively, one can purchase a new policy and donate its ownership to charity.
These tax-favored plans are available to donors who desire to make an irrevocable gift. Such an agreement will benefit one or more charities at their death (or at a specified future date), while the donor (and/or other selected beneficiary(s)) usually retains the right to an income stream during one or more lifetimes. These agreements are often funded with highly appreciated assets (worth more than their cost) such as real estate or stock. Increased income, income tax deductions, avoidance and/or deferral of capital gains tax and estate tax relief are potential benefits to donors.
Charitable Gift Annuity
The donor makes an irrevocable gift to a charity and in return receives fixed annuity payments for one or two lifetimes. The income beneficiary(s) is selected by the donor. Most charities use a rate table (based on age) suggested by the American Council on Gift Annuities. These rates are more favorable to elderly individuals, yet protect the interests of charities. Donors receive an income tax deduction for a portion of the value of the gifted asset. In addition, the income beneficiary(s) receives partially tax-free income for a period of years, and the donor receives capital gain tax benefits if the gift is funded with appreciated property.
A variation of this gifting method is the deferred gift annuity. Here, the income payments begin in a later year, typically with a higher return rate. Often, donors choose to defer their income until retirement age.
Charitable Remainder Trust
Donors make a substantial irrevocable gift to a trust that they have established and the selected beneficiary(s) receives annual payouts in either a fixed amount or based on a fixed percentage of the year-end value of the trust assets. Selected charities typically receive the trust assets either upon the death(s) of the income beneficiary(s) or after a selected term of years. Some donors utilize part of the enhanced income they receive from the trust (as well as tax savings) to purchase life insurance to replace the gifted asset for the benefit of family members.
Leaving A Legacy
Many donors make revocable (can be changed) commitments to charitable organizations. The donor receives no income tax advantages from such gifts. However, estate tax benefits may occur for those donors who wish to maintain control over their assets until they are directed to charities at their death.
It is important that we maintain an up-to-date will or living trust directing the disposition of assets at our death. Many Americans distribute a portion of their assets to charities as their final act of philanthropy. It is possible to favor charities with either a specific asset bequest, a fixed dollar amount or a percentage of the “residual value” of one’s estate.
Many assets may be directed at death through means which avoid probate. Retirement accounts, life insurance proceeds, financial accounts and other assets often pass through beneficiary designation. Changing one’s beneficiary designations to include charities (all or in part) represents a simple but compelling way to direct one’s assets for the public good.
Beneficiary designations on retirement plans (IRAs, 401(k)s, etc.) allow individuals to give charity all or a portion of their retirement fund at death. It is also possible to name a charitable remainder trust to receive retirement fund assets and name one’s spouse as the trust’s income beneficiary. In either case, the donor has directed to charity an asset on which his or her heirs would have been subject to income taxation in future years.
NORTH DAKOTA TAX CREDIT FOR PLANNED GIFTS
This tax credit provides for an attractive opportunity for ND Taxpayers to contribute to the charitable organizations they support and enjoy the benefits of this tax credit. Please discuss the various planned gift opportunities available for the purposes of this credit with your attorney or financial advisors.
NEW TAX CREDIT BRINGS GREAT TAX INCENTIVE FOR BUSINESS GIFTS TO MSLCC’S QUALIFIED ENDOWMENT FUND.
Are you an owner of a North Dakota Business?…or are you a beneficiary of a trust or estate which derives income taxable in North Dakota?…If so, you have been presented with an unprecedented tax incentive if you make gifts to help secure the future of a qualified North Dakota nonprofit organization through a gift to its qualified endowment fund.
The 2007 North Dakota legislature passed Senate Bill 2363, which allows a significant income tax credit for certain gifts to be “permanent, irrevocable” endowment funds of qualified North Dakota charitable organizations. This legislation pertains to gifts made in a taxable year beginning after December 31, 2006. Qualified donors will likely find that well over 50% of their gifts will be “subsidized” through State and Federal tax incentives! Please visit with your financial advisor regarding this opportunity for a valuable income tax credit.
For information on how you can help us fulfill our important mission, please contact us at Missouri Slope Lutheran Care Center at 701-223-9407.
Gifts to Missouri Slope Lutheran Care Center (or its Foundation) are tax-deductible under Federal income tax law.
Disclaimer: The concepts described herein are intended to provide information of a general nature only. They should not be construed as legal, tax and/or financial advice. Readers are urged to consult with their own professional advisers for their specific situations.