Types of Gifts

There are a number of ways to provide support for the Foundation, while gaining potential tax benefits. An outright gift or bequest is a typical means of contributing to the endowment. Contributions may be in the form of cash, real estate, appreciated securities (stocks, bonds, mutual funds), or a life insurance policy. Generally, such gifts afford significant tax benefits for the donor. Indeed, gifts of appreciated assets can both avoid capital gains taxes and provide a charitable deduction at the market value.

Bequests

A bequest to the White Salmon Valley Education Foundation is a gift conveyed in a donor's will as part of the disposition of his/her estate. It may be a specific amount or percentage of the estate, real estate, certain types of tangible property, or the remainder of a trust. A bequest is not subject to federal estate tax or state inheritance tax. A will is, of course, essential if one wishes to make a bequest.

Life Insurance

Many people find that, as their family responsibilities diminish, they no longer require the protection of life insurance. In such a case, the Foundation may be made the beneficiary of a donor's life insurance policy. The donor receives an immediate charitable income tax deduction for the "present value" of the policy (typically the cash surrender value) and saves estate taxes. If the donor continues to pay the policy premiums to maintain the policy in force, he/she is entitled to an income tax deduction for each year the premiums are paid. A donor may also make the Foundation the beneficiary of a new insurance policy and save on both income and estate taxes.

Appreciated Securities

There are special advantages to donating appreciated securities to the White Salmon Valley Education Foundation. If a donor is liable for capital gains taxes resulting from the sale of appreciated securities, he/she can reduce the tax liability by contributing them to the Foundation. While a contribution from current income may provide a charitable deduction up to as much as 39.6%, depending upon a donor's tax bracket, a donation of appreciated securities-e.g., stock or mutual fund shares-will earn a tax deduction for the full fair market value of the gift and avoid the capital gains tax.

Real Estate

Gifts of real estate are another way to benefit the Foundation, and can result in significant tax and investment benefits. They may be made by bequest or lifetime transfer. An outright gift of real estate will be accepted and subsequently sold, unless there is a special investment reason for holding it. The transfer to the Foundation will provide an immediate income tax deduction for the fair market value and will avoid capital gains tax on the appreciated value.

A donor may also choose to transfer to the Foundation real estate, which will be sold to fund a life income trust to provide income to the donor and one other beneficiary for life. The donor establishes a rate at which the trust will pay income. Upon the death of the last named beneficiary, the remaining principal reverts to the Foundation.

There are other types of charitable real estate gifts that can be considered. It is important to note that all proposed gifts of real estate are subject to due diligence by the Foundation before final acceptance can be assured.

Charitable Trusts

The Foundation will also permit a donor to establish a charitable remainder trust, which will provide life income for the donor. The donor receives an initial charitable deduction for the present value of contributed asset, as well as an agreed-upon amount of income from the Foundation's investment of the asset. There are various types of trusts, and a prospective donor should consult with a financial advisor to determine the most appropriate trust plan.