I Want To...

Make a Charitable Gift

You may be able to make a charitable gift and increase your annual income, especially if you have low-interest CDs or stocks that pay low annual dividends.

Charitable Gift Annuity

A charitable gift annuity offers you a way to support Smith and lock in a fixed, high rate of return in place of the low rates CDs and money market accounts are paying. Rates are based on age.

Charitable Remainder Trust

You can diversify your income with minimal capital gains taxes. Transferring appreciated assets to a charitable remainder trust can alleviate your capital gains tax issues and diversify your income-producing investments—all while making a charitable gift and receiving a charitable income tax deduction.

Real Estate

You can turn real estate into income. If you plan to downsize from your primary residence or have vacation property that you no longer want, these real estate assets could be used to fund a charitable remainder trust that produces income for your lifetime or for a loved one.

Charitable Gift Annuity

A charitable gift annuity can create income directed to whomever you designate. The annuity rate is determined by the person's age. You can claim a charitable tax deduction in the year you fund the gift. (Note: only a portion of the gift is deductible, since it is only partially charitable.)

Pooled Income Funds

If you have children older than 50 but not yet 60 years of age, gifts through Smith's pooled income funds may satisfy your objectives. In donating securities through a pooled fund, you may give away all of your capital gain in those assets and you may receive a charitable tax deduction.

Charitable Remainder Trust

You may wish to help fund an education for a child or grandchild. A charitable remainder trust can help reach that goal and reduce your taxable estate in the process.

Note: A trust that pays income to a grandchild will involve gift and/or generation-skipping tax considerations when the trust is funded.

Charitable Gift Annuity

If you wish to provide a legacy for your relatives but also have a deep desire to create a scholarship fund at Smith, you may consider a charitable gift annuity. After your death, your bequest to Smith will initially be used to fund charitable gift annuities for your relatives. After their deaths, the principal of your bequest will create a fund at Smith in memory of someone special.

Deferred Payment Gift Annuity

As you plan for retirement, consider whether these long-term goals are important to you:

• A high rate of retirement income
• An immediate federal income tax deduction
• A meaningful gift to Smith

One of the most useful life income gift arrangements for retirement planning is the deferred payment gift annuity.

Charitable Remainder Trust

Can your valuable antique finance your retirement? Yes, if you donate the item to a charitable remainder trust. The trustee will sell the asset and invest the proceeds in order to generate income for you (or the beneficiary you choose). After the beneficiary's death, the remaining principal will go to the charity or charities you specified.

There may be a time when you wish to offer financial assistance to a family friend or someone important in your life. Whether providing a pension for a long-time nanny, housekeeper or groundskeeper, or offering assistance to a friend who has come upon hard times, Smith's life income gift arrangements offer a tax-effective and discrete way to help.

Through a life income gift arrangement, as in a pooled income fund, charitable gift annuity or charitable remainder trust, you provide an income stream for your friend while ensuring that the principal will ultimately benefit charity.

You can create a current stream of income for Smith and/or other charities for a period of years, after which the remaining trust principal passes to the parties you designate—usually children or grandchildren. Smith benefits immediately through annual payments from the trust, and trust assets can continue to grow before they pass to the next generation.

Charitable Lead Trust

A charitable lead trust can effectively transfer assets from one generation to another at significantly reduced gift and estate taxes, preserving more of your assets for the purposes you choose.

Because an amount has been distributed to charity, the gift or estate taxes due on the transfer to heirs can be greatly reduced. If such a trust is created during the donor's lifetime, gift tax may be due when the trust is established, depending upon how much income will go to charity. Any appreciation in the trust passes to heirs with no additional tax due. Assets donated to the trust may be sold or held intact if they can produce the required income stream. Donors sometimes use businesses or closely held stock to fund these trusts.

The simplest gift to Smith is a check made payable to "Smith College." It is also easy to use a credit card via Smith's secure Web site.

Charitable Gift Annuity

CDs coming due? In the current low interest rate environment, it may be advantageous to convert the cash in your low interest CDs into a higher-rate charitable gift annuity.

Are you reluctant to make changes in your investment portfolio because of capital gains? Do you hold a large position in family stock? Have you been given stock with a low basis?

Charitable Remainder Trust

Many donors are amazed at the diversification they achieve (without capital gains tax pain) when they fund a charitable remainder trust that returns lifetime income to them and passes to charity at their death. Transferring appreciated assets to a charitable remainder trust can alleviate your capital gains tax issues and provide a way to diversify your income-producing investments—all while making a charitable gift and receiving a charitable income tax deduction.

In uncertain economic times, with low dividend and interest yields and an unstable stock market, real estate is one class of assets that has held its value.

There are many ways to structure a gift of real property for a charitable organization. Whether your objective is to dispose of property that you no longer want or need, downsize from a primary residence, live in your house and achieve an income tax deduction, or even receive a stream of income in exchange for the property, chances are there is an arrangement that might work for you.

An Outright Gift

You may deed Smith your property with no strings attached, gain an income tax deduction for the appraised value of the home, and designate how you would like your contribution to be used to further Smith's mission.

A Gift at a Bargain Price

If you'd like to make a gift to charity but you need some of the proceeds from the sale of your home, you can agree to sell Smith your home at a bargain price. This is called a bargain sale.

A Gift Subject to a Life Estate

It's possible to continue to live in your home during your lifetime and irrevocably deed it to charity at your death. The gift arrangement is called a retained life estate. A donor can claim a federal income tax deduction for a portion of the value of the property, and remains responsible for all the taxes, maintenance and insurance while she is alive. If at any time the donor decides to move from the property, the gift can be accelerated and an additional income tax deduction may be taken.

A Gift With Income Stream

If you don't mind moving from your home, and don't need the proceeds to purchase another residence, but you do want to secure an income stream, you may donate the property to a charitable remainder trust or a charitable gift annuity.

Have Your Cake and Eat it Too

If you wish to obtain an income stream but you can't afford to give up the entire principal of your house or you don't want to move from your house, there is one additional gift that Smith will consider with you. It is a combination of a retained life estate and a charitable gift annuity. This combination gift arrangement would allow you to remain in your home and receive fixed annuity payments for your lifetime.

Do you own paid-up life insurance that is no longer needed for its original purpose? Are your children self-supporting? Have you sold your business? Consider your insurance policy an asset that is easy to give away to charity! You would be allowed a charitable income tax deduction for the cash surrender value of the policy.

Other assets to consider are real estate, works of art or your existing life income gift. It is possible to surrender your life income interest in your pooled income fund, charitable remainder trust or gift annuity and gain gift recognition and an additional tax deduction for the future income stream that you have given up.

Is a tax-deferred retirement account a good asset to pass on to your heirs? In many cases the answer is no. At your death, any unused retirement assets are subject to two potential tax liabilities:

• Income taxes at the beneficiaries' own tax rates
• Estate taxes

Total taxes on the IRA assets can be extremely high—even up to 80 percent. You can avoid this depletion by naming Smith College (or another charity) as beneficiary of your IRA and directing other, less tax-encumbered assets to heirs. This strategy can result in more assets reaching your heirs.

An article (PDF) by the manager of estate planning for Mellon Private Asset Management, outlines the elements of using retirement assets to fund a charitable gift.

Your antique highboy or American Primitive painting could be a wonderful charitable gift. In fact, donating a valuable item to charity can help reduce your taxable estate.

If your gift of tangible personal property is for a purpose related to Smith's educational mission, we will be happy to talk with you about it. Books, artwork and equipment can be highly welcome additions to Smith's academic offerings and physical resources.

If you currently receive payments from a life income gift that you no longer need, you can renounce your remaining life interest in that gift and receive an immediate income tax deduction for the present value of the income you're giving up. Smith will also give you gift credit, which counts toward your class goal and toward the campaign.

Making a will is a wonderful way to take stock of your values and priorities. The first step is usually to ensure that your loved ones are provided for. You then have the opportunity to consider whether you might leave a legacy to your favorite charities.

Life insurance that is not needed by family members can be designated for Smith and other charities.

Retirement assets are easily designated for charity. You can name a charity to receive 100 percent or a portion of your retirement account upon your death.

You can benefit Smith (or other charity) after your death through a trust.