Planned Giving
Leave a legacy that lasts...
Glossary of Planned Giving 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 benefactor acquired it. Generally, appreciated property
held by the donor for a year or more may be donated 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 that secures fixed
lifetime payments to the benefactor 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. Benefactors 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 benefactor’s purchase price for an asset, possibly adjusted to
reflect subsequent costs or depreciation. If Mrs. Quinn bought stock for $100
per share and sold it for $175, her cost basis in the stock is $100 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, above.
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
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 (known in some states
as the "personal representative").
Fair Market Value
The price that an asset would bring on the open market.
Grantor
The individual transferring property into a trust.
Income Interest
In a trust, the right to receive payments from the trust for lifetime or
a term of years.
K-1 (also 1099-R)
The IRS forms that we send our life-income gift participants detailing
how payments they received from their gifts during the year will be taxed.
Life Income Gift
A planned gift that makes payments to the benefactor and/or other beneficiaries
for lifetime, then distributes the remainder to us.
Personal Property
Securities, artwork, business interests and items of tangible property – as
opposed to "real property," used in planned giving to refer to land
and the structures built on it.
Personal Representative
See Executor, above
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 benefactor 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.
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