Ways of Giving
WAYS OF GIVING
Gifts for the Present
The best way to have an immediate impact on Bering Omega Community Services’ work is to make a current gift. Every dollar provides current support to our Network of Care. You will have the satisfaction of seeing your gift in action and knowing that the mission of Bering Omega Community Services is carried out each day because of your generosity.
There are a number of gifts that can be made.
• An outright cash donation is the easiest and most popular method. You may receive an income tax charitable deduction for the full amount you contribute. *
• An outright gift of appreciated property, such as a publicly traded securities, real estate or even closely held stock, provides an extra tax benefit if you have owned the asset more than a year. In addition to receiving an income tax deduction for the full fair market value of the asset, you also avoid tax on the capital gain.*
* Note: The income tax charitable deduction that may be reported in any one year is limited to 50 percent of your adjusted gross income (AGI) for gifts of cash and 30 percent of AGI for gifts of long-term appreciated property. In either case, however, any excess deduction is eligible to be carried forward up to five additional years, subject to the same percentage limitations each year. Please consult your tax or financial professional.
• In some instances, it may also make sense to donate other types of assets. Giving a new or existing life insurance policy will provide a charitable income tax deduction equal to the lesser of the policy’s value or your basis in the policy. You may also receive a charitable income tax deduction for the future premiums you pay on the policy. However, Bering Omega Community Services must be named as beneficiary and owner of the policy. (Simply designating Bering Omega Community Services as beneficiary does not result in income tax deductions but can offer estate tax benefits.)
• Additional possibilities include items of tangible personal property such as books, jewelry or paintings or intangible property such as copyrights or patents. The tax aspects associated with contributing assets such as these will vary depending on your particular circumstances.
• Charitable lead trusts are appropriate for donors who are facing a large estate tax. The best way to give depends on your specific situation and should be discussed with your attorney, accountant or financial advisor.
Gifts for the Future
• A deferred gift is a gift that is planned and arranged now but does not become available to Bering Omega Community Services until a future time. Two common types of deferred gifts are charitable bequests and beneficiary designations. Both allow you to retain assets in case you may need them during your lifetime.
o A charitable bequest to Bering Omega Community Services can be as simple as a sentence or two in your will or living trust agreement. Your bequest may specify a certain sum of money or a particular asset.
Example: “my shares of XYZ stock” or my collection of paintings by Famous Artist.”
Another possibility would be a portion of the residue of your estate after other bequests have been paid.
Example: “50 percent of the rest, residue and remainder of my estate.”
• Yet another option is a contingent bequest where Bering Omega Community Services receives a bequest if a named person does not survive you.
Note: Even if you already have a will, it can often be revised to include a charitable bequest by means of a document known as a codicil. Similarly, a living trust agreement can usually be amended easily. In any event, be sure to consult with your attorney regarding appropriate documentation of bequests and other estate planning arrangements.
• Beneficiary designations may be made with respect to several different assets. Typically, this involves completing a form obtained from the entity that maintains a particular asset or account on your behalf. The easiest way to donate is to designate Bering Omega Community Services as a beneficiary of all or part of the balance. All bequests and beneficiary designations should be made to Bering Omega Community Services. This gift shall be used for the further benefit of the Network of Care provided by Bering Omega Community Services.
• One particular choice is a payable upon death designation with regard to a bank account or transferable upon death instructions for brokerage accounts. Many people also designate that some or all of the proceeds of a life insurance policy be paid to a charitable organization such as Bering Omega Community Services.
Gifts that give back
• Some gifts actually return the favor by combining a charitable gift with life payments for you and/or other beneficiaries you designate. These attractive plans can help you make a substantial gift for the eventual benefit of Bering Omega Community Services while still providing for your personal financial needs. They offer significant tax advantages and, depending on the asset contributed, may even increase your cash flow.
• A charitable gift annuity is the oldest, simplest and most popular life payment gift. In exchange for a contribution of cash, marketable securities or certain other assets, you and/or another beneficiary receive a specified life annuity that is contractually guaranteed. Rates depend on the ages of the beneficiaries but frequently provide greater cash flow than fixed payment investments. Part of your contribution is tax deductible in the year the gift is made and a portion of the annuity will be tax-free. If appreciated property is contributed, tax on the gain is reduced.
• A charitable remainder trust is a planned giving arrangement in which property is irrevocably transferred to a trustee under a trust agreement. Income (and, in some cases, principal) from the trust is paid to you and/or other beneficiaries for life or a term of years. Bering Omega Community Services then receives the remaining trust assets. Such trusts offer great flexibility in meeting individual income and estate planning needs. The trust payout rate may be a fixed amount or a percentage of the trust assets as revalued annually. At the time of the transfer, you receive a charitable income tax deduction for the actuarially determined present value of the remainder interest.
• A gift of real estate with retained life interest “gives back” in a some-what different way. You may donate a personal residence or a farm to Bering Omega Community Services, but retain the right to occupy or use it for the balance of your life. You receive an income tax deduction for the present value of the remainder interest and avoid any potential tax on capital gain.
GIFTS AT A GLANCE
• Giving Wisely: Assets can be given outright or used to fund a life-income gift.
• Gift of Cash: Did you know that this simplest gift maximizes your charitable deduction and delivers immediate benefits to Bering Omega Community Services?
• Appreciated Securities: Did you know that the IRS still allows you one of its most significant tax breaks for these gifts?
• Gifts of Artwork and Collectibles: Did you know that you can enliven and beautify Bering Omega Community Services’ facilities and also secure an income tax deduction?
• Bequests: Did you know that this most fundamental planned gift delivers critically important support to Bering Omega Community Services every year? Contact us for descriptions of the various types of charitable bequests.
• Gifts of Retirement Plans: Did you know that your retirement plan can deliver more benefit to Bering Omega Community Services than to your heirs?
Gifts in Partnership with Us
• Charitable Gift Annuities: Our simplest life-income gift delivers the highest annual payments and significant tax benefits for you. In return for your gift, Bering Omega Community Services pays you an annuity; you receive an income tax deduction, avoid up-front capital gains tax on your gift transfer, and pay no income tax on part of the payments you receive from Bering Omega Community Services.
• Deferred Gift Annuities: Did you know that there is a life-income gift designed to build younger donors’ retirement earnings? Deferring the start of your annuity until retirement or later gives you a large income tax deduction now and an additional source of income when you need it later.
• Charitable Remainder Unitrusts: Did you know that this powerful life-income gift is our most creative planning tool for donors? The unitrust pays you a fixed percentage of principal and reinvests excess income. You have flexibility in determining who will manage the unitrust, the length of the income payout and the number of income beneficiaries, and which assets will be placed in the trust.
• Charitable Remainder Annuity Trusts: Did you know that you can combine flexible management of your gift with a predictable fixed-income payout? The annuity trust is individually managed, and can pay fixed income for life or a term of years to multiple beneficiaries.
• Charitable Lead Trusts: Did you know that one of our gifts reduces the cost of transferring assets to your family – while delivering immediate benefits to Bering Omega Community Services? The lead trust holds appreciating assets for a term and pays income to Bering Omega Community Services, then passes the principal to your family. The gift plan freezes the taxable value of appreciating assets but passes on to your family the full market value after the period of income to Bering Omega Community Services.
• Retained Life Estates: Did you know that you can give Bering Omega Community Services your house and continue to live there rent-free? Contact us to learn the tax details.
FREQUENTLY ASKED QUESTIONS
Q: What are the three kinds of gifts I can make to Bering Omega Community Services?
A: General speaking, during your lifetime you can make an outright gift of cash, securities or other
property (e.g. real estate, personal property).
Upon your death you can make a gift through your will or with a distribution from a retirement plan or
life insurance policy.
You also have the option of making a gift that returns lifetime income to you, your spouse, or other
individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.
Q: What sorts of assets can I use to make a gift?
A: Almost anything: cash, publicly traded securities, life insurance, the balance of your retirement
account. Other assets can be very valuable but are more complicated to administer and must be
reviewed by us before we can accept them as gifts: real estate, closely held stock, artwork and
Q: What tax deduction will I receive for my gift?
A: It depends on the form your gift takes.
• Outright gifts to Bering Omega Community Services generate a full income-tax charitable deduction to the extent allowable by law. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains – a great tax benefit!
• Gifts of personal property such as art, books and collectibles are fully deductible and will be accepted by us if they are relevant to our mission. The Resource Development department can advise you on this point.
• Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however.
• If you have made Bering Omega Community Services the irrevocable owner and beneficiary of a life insurance policy during your lifetime, you may deduct annual gifts that offset premium payments.
• The charitable deduction for a gift that returns income to you, such as a charitable gift annuity or a charitable remainder trust is the fair market value of the gift asset minus the present value of the income interest you retain.
Q: Can Bering Omega Community Services serve as the executor of my estate?
A: No. State law, the limitations of our corporate power, and our internal policies prevent us from taking
such a role in your affairs.
Q: I want to set up a life-insurance policy, name Bering Omega Community Services as beneficiary,
but retain ownership of the policy. Can I deduct the premium payments I make?
A: No. The IRS would not consider that a “completed gift” – they’d say that, as the owner of the policy, you
could change the beneficiary designation to a friend or family member. Bering Omega Community
Services must be made the irrevocable owner of the policy for gifts offsetting premium payments to be
Q: Can I transfer my IRA to Bering Omega Community Services to set up a life-income gift, and
avoid income tax on the transfer?
A: Congress is looking at new legislation for IRA charitable distributions. Please contact our Resource
Development department for the latest information on proposed legislation.
Q: I’d like to donate a painting. Will you determine its value for my income tax deduction?
A: No. We can’t. The IRS requires that donors of artwork and collectibles secure an independent appraisal
of the items to establish fair market value. The appraisal has to be related to the gift, too – an insurance
appraisal won’t suffice. The Resource Development department can assist you on this point.
Q: I’m establishing an unitrust. My bank will serve as trustee, and I’m naming Bering Omega
Community Services as the remainder beneficiary. Will Bering Omega Community Services still
recognize me as a donor?
A: We are grateful that you have named us as a beneficiary, and we recognize you as a donor to Bering
Omega Community Services. The charitable portion of your gift is deductible for income tax purposes.
GIFT PLANNING – DEFINITION OF TERMS
Actuarial – As used in planned giving, refers to the factors used to calculate the value of lifetime payments to individuals or organizations.
Appreciated Property – Securities, artwork, real estate, or any other property that has risen in value since the donor acquired it. Generally, appreciated property may be donated to us at full fair market value with no capital gains cost.
Annuity – A contractual arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift annuity is a gift to us that secures a fixed lifetime income to the donor and/or another individual.
Adjusted Gross Income (AGI) – The sum of an individual’s taxable income for the year the total at the bottom of the first page of the 1040. Individuals may deduct charitable cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities and appreciated property up to 30% of AGI.
Appraisal – An assessment of the value of a piece of property. Donors contributing real or tangible personal property (art, books, collectibles, etc.) to us must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.
Basis – The donor’s purchase price for an asset. Mrs. Smith bought stock for $50 per share and sold it for $225. Her cost basis in the stock is $50 per share.
Beneficiary – The recipient of a bequest from a will or a distribution from a trust.
Bequest – A transfer of property to an individual or organization under a will.
Capital Gains Tax – A federal tax on the appreciation in an asset between its purchase and sale prices.
Cost Basis – See Basis.
Endowment Fund – The permanently held capital of a non-profit used to support ongoing projects and meet institutional opportunities.
Estate Tax – A federal tax on the value of the property held by an individual at his or her death (it’s paid by the estate, not the recipients of the bequests). In contrast, state inheritance tax is applied to the value of bequests passing to beneficiaries; it is also paid by the estate before the distributions are made.
Executor – The person named in a will to administer the estate.
Fair Market Value – The price that an object of property would bring on the open market.
Grantor – The individual transferring property into a trust.
Income Interest – In a trust, the right to receive income payments for lifetime or a term of years.
K – 1 (also W – 2) – The IRS forms that we send our life income gift participants noting the income paid them by their planned gifts during the tax year.
Life Income Gift – A planned gift that pays income to the donor and/or other beneficiaries for lifetime, then distributes the remainder to us.
Personal Property – Securities, artwork, business interests and other items of property as opposed to real property, used in planned giving to refer to land and the structures built on it.
Remainder – In a trust, the portion of the principal left after the income interest has been paid to the beneficiary (ies). A charitable remainder trust pays income to the donor or other individuals and then passes its remainder to us.
Remainderman – A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.
Testator – The individual making the will.
Trust – A transfer of property by the grantor to the care of an individual or organization, for the benefit of the grantor or others.
Trustee – An individual or organization carrying out the wishes of the person who established the trust, paying income to the beneficiaries and preserving the principal for ultimate distribution.
For more information to help you plan wisely so that you can leave a legacy that benefits both you and Bering Omega Community Services please contact:
VP of Resource Development
Bering Omega Community Services
1429 Hawthorne St.
Houston, TX 77006
WE URGE YOU TO SEEK THE ADVICE OF YOUR LEGAL OR TAX PROFESSIONALS.
“We are, after all, only trustees of the wealth we possess… Without the community and its resources… there would be little wealth for anyone. If it be known that a generous measure of the wealth one accumulates is ultimately to be devoted to community use,
it may be deemed honorable.”– John Ruskin