Occupational Development Center

1. Occupational Development Center 640 Martha Ave Lancaster, PA 17601 (717) 397-4269 www.odcenter.org "Working to Build Independence Since 1948"

2. Planned Giving This power point presentation is not professional tax or legal advice; consult a qualified tax advisor about your specific situation.

3. What is Planned Giving? • Planned Giving is a means of “leaving a legacy” • Giving which requires more planning than writing a check • Planned Giving assists donors in making major gifts • Charitable gift that requires some planning before they are made • Provide a future income to the non-profit

4. A planned gift can: • Give you a tax advantage • Fit appropriately with your estate plans & concerns for heirs • Compliment your lifestyle goals • Match your wish to “leave a legacy” to the cause you care about

5. What does a planned giving donor look like?

6. Statistics • There are approx. 1,010, 400 charitable organizations in the United States. • 89 % of households give. • The average contribution for contributors is $1,620. • It is estimated that charitable contributions will total between $21.2 to $55.4 trillion in between 1998-2052.

7. Most Common used Planned Giving Vehicles: • Charitable Gift Annuities • Deferred Gift Annuities • Pooled Income Funds • Charitable Remainder Trusts • Annuity Trusts • Unitrusts • Charitable Lead Trusts • Bequests • Life Estate • Life Insurance

8. Charitable Gift Annuities • Known as, “the gift that gives something back” • Simplest, most popular forms of life income gifts • They are an agreement in which you transfer cash or other assets to a charitable organization in exchange for its promise to pay you a fixed annuity for life • CGA’s are appealing for donors aged 70+

9. Benefits of a Charitable Gift Annuity: • Income for life paid annually, semiannually, quarterly, or monthly • A fixed rate that is often greater than money market rates • An immediate charitable income tax deduction for 35-50% of the gift amount • The opportunity to support a charity

10. Deferred Gift Annuities • A deferred gift annuity is similar to a charitable gift annuity, except that the payments are deferred to a future date. • Appealing to donors aged 25-60. • Excellent way for a younger donor to make a gift and receive a charitable income tax deduction while improving income for the future.

11. Benefits of Deferred Gift Annuities • Immediate charitable income tax deduction based on the market value of the assets you contributed, minus the present value of the life-income interest you retained • Guaranteed income in the future, often at retirement • Part of each annuity payment to you comes tax-free as the return of principle • A deferred annuity may be created with a gift of $10,000 or more.

12. Pooled Income Funds • A Pooled Income Fund is a trust that is established & maintained by a public charity. It is similar to a mutual fund comprised of gifts that are pooled & invested together. A Pooled Income Fund allows you to do 3 things: • Ensure a perpetual income • Claim a current tax deduction • Make a future gift to charity

13. Charitable Remainder Trusts An irrevocable trust naming individual beneficiaries for life; and one or more qualifying charities, as recipients of the remainder upon the last to die of the individual beneficiaries. A CRT provides a lifetime income and a charitable deduction. A minimum of $100,000 is recommended to establish a Charitable Remainder Trust

14. Advantages of a Charitable Remainder Trust • You will receive an income for life. • A CRT allows you to make a guaranteed significant gift to the charity, here and now. • A CRT offers freedom from investment decisions. • A CRT ensures that your wishes will be carried out exactly as you have specified. • A CRT ensures your gift is not subject to probate, estate taxes, or possible challenges to your will. • A CRT provides immediate tax benefits.

15. Annuity Trusts & Unitrusts • Annuity Trusts pay a fixed, guaranteed dollar amount regardless of the trust’s investment performance. • Annuity Trusts pay donor fixed payout dollar amount representing percentages of the trusts assets on date established. • Unitrusts pay the donor a pre-determined percentage of the fair market value of the trust’s assets as revalued annually. • Unitrusts pay income to donor for life or a term of years, and then the remainder goes to charity.

16. Charitable Lead Trusts • A Charitable Lead Trust pays income to charity, and the remainder to grantor or heirs. • Unlike a Charitable Remainder Trust, a CLT is not subject to a min. payout of 5%. A Charitable Lead Trust is a fully taxable trust while a Charitable Remainder Trust is a tax-exempt trust.

17. Bequests • A Bequest is a gift or legacy left by a will or through a trust, typically personal property, or assets. It may be a specific dollar amount, a percentage of the estate, or a remainder after other distributions have been made. • There are three types of Bequests: • Specific • Residuary • Contingent

18. Life Estate • Deed your property now to the non-profit organization • Retain a life estate in the property • You pay maintenance, taxes, and other costs of home ownership • You get an income tax deduction now • Your favorite charitable organization receives the proceeds from your home upon your death(s)

19. Life Insurance Trust • Life Insurance is a trust that has an individual’s life insurance policy as its principle asset. • Options include naming your charity of choice as the beneficiary of the death benefit or transferring ownership of its existing policy to the charity of choice.

20. Ways to Fund a Planned Gift • Cash • Pledge • Securities • Life Insurance • Tangible Personal Property • Real Estate • Retirement Assets

21. Beneficiary of your IRA Designate the non-profit as beneficiary Why? If you designate your children as beneficiaries, taxes can eat up 75% or more of the value of the IRA! $1,000,000 example -Federal Estate Tax -State Inheritance Tax -Federal Income Tax -State Income Tax

22. ODC FOUNDATION Primary Goals of The ODC Foundation are to: - Maximize the current and long-term impact of charitable donations in furtherance of the ODC Mission - Provide donors with significant financial advantages; tax benefits; convenience; professional management, versatility; recognition and/or anonymity - Educate the Lancaster community and other constituencies regarding “ways to give” to the ODC Foundation - Secure a financial future for the Occupational Development Center. Whether contributing to an ODC event, making an unrestricted or restricted gift, or setting up a trust, everyone can make a difference. All gifts are tax deductible to the extent permitted by law.

23. Aristotle • “To give away money is an easy matter and in any man’s power. But to decide to whom to give it, and how large, and when, and for what purpose and how, is neither in every man’s power nor an easy matter.”

24. Contact Information: • For more information about making a planned gift to the Occupational Development Center, please contact: Cheryl Kmiecik, PR & Development Manager (717) 397-4269 cherylk@odcenter.org

25. Planned Giving Sources: • www.osufoundation.org • www.willplan.org • www.plan.gs (quiz) • The Journal of Wealth Management for Estate Planning Professionals Since 1904 • Planned giving for Small Nonprofits - Ronald R. Jordan & Katelyn L. Quynn • Planned Giving Workbook – Ronald R. Jordan & Katelyn L. Quynn • Philanthropy Statistics from the 2007 National Philathropic Trust • Giving & Volunteering in the U.S. 2001, Independent Sector • Center on Wealth and Philanthropy • Internal Revenue Service • Planned Giving Handouts were produced by:http://purdue.giftlegacy.com/Planned Giving-for Beginners.pdf

26. Occupational Development Center www.odcenter.org Phone: (717) 397- 4269 Fax: (717) 397- 4260