![Planned Giving](/peth04/20041108030657im_/http://www.loc.gov/philanthropy/planned/giving_title.gif)
What is a planned gift?
A planned gift is simply the
process of making a charitable donation in a manner that can financially
benefit both the donor and the institution receiving the gift. It may
be helpful to talk to a member of the Library's Planned Giving Office,
your personal financial advisor, or an attorney to decide what assets
to donate, when to make the donation, and where the assets should
be transferred. The information found on this Web site will give you some
basic information about the options and financial benefits of various
types of planned gifts.
Why should I make a planned gift?
Private philanthropy has become one of America's most
valued traditions. Each year millions of people find creative ways to
contribute to their favorite non-profit organizations. The reason for
making a gift to the Library of Congress may be different for each donor
to honor a loved one, to support a tradition of excellence or to
express gratitude for a service well-performed. Whatever the motivation
for your gift, a planned gift can give you the assurance that you are
being a good steward of your assets by increasing the benefits for yourself,
family members, and the organization receiving the gift.
What are some of my planned giving options?
Select from the following:
- Outright Gifts
- Bequests
- Charitable Remainder Trusts
- Charitable Lead Trust
- Matching Gift Programs
The manner in which you make an outright gift
of assets, such as highly appreciated securities, can have a substantial
impact on both your own tax liability and the amount the institution
receives. For example, if you were considering gifting shares of stock
worth $10,000 with a cost basis of $1,000, you may be hesitant to sell
them and give the proceeds to the Library because of the capital gains
tax. If you sold the stock you might create a tax liability of $1,800
leaving only $8,200 for the charitable gift. On the other hand, transferring
the stock worth $10,000 directly to the Library provides the possibility
of avoiding any tax on the capital gains, allows you to the fullest
extent of the law to take a charitable contribution for the full
value of the stock, and most likely increases the amount the institution
realizes from the gift.
Donors making a smaller outright gift may target it
to support any of the continuing programs funded by the Library's existing
various donor funds. These ongoing programs, reaching across all areas
of the Library, include scholarly initiatives, musical concerts, special
publications, exhibitions, educational outreach, conferences and symposia,
and fellowships.
Major donors, in consultation with the Library, may
wish to establish a new program immediately with an outright gift and
make a provision to endow it later through another planned gift such as
a bequest or a Charitable Remainder Trust.
Bequests
Over the years, the foresight of individuals who have
made a bequest to the Library of Congress by including a gift to us in
their will, have been the lifeblood of the Library's growing endowment.
Bequests allow individuals to support ongoing Library initiatives with
assets they may need for their own use during their lifetime (e.g. a house).
Many of the Library's current programs started as the idea of someone
who could not make a major donation during their lifetime, but were able
to make it a reality through a bequest. Working with you and/or your representative,
the Library can assist you in drafting language for your will that will
ensure that your bequest is used for the purpose you intended and that
it merges your philanthropic interests with the Library's needs.
Charitable Remainder Trusts
A Charitable Remainder Trust allows a donor to transfer
assets, usually cash or securities, to a trustee of choice such as a bank
trust department. During the life of the trust, which may range from a
few years or for a lifetime, the trustee invests the assets and provides
annual income to the donor or other income beneficiaries the donor names.
At the end of the trust's life, the trust's remaining assets pass to the
Library of Congress to be used for the purpose defined when the trust
was created.
The Charitable Remainder Trust can be set up two ways.
The first, called an annuity trust, provides a fixed amount of income
each year. The second, called a unitrust, provides a variable amount of
income each year based on the annual value of the trust.
As a planned gift, a Charitable Remainder Trust gives
you the possibility of converting non-income producing assets to income
producing assets without creating any taxable capital gains, increasing
your current income, and taking an immediate charitable tax deduction
for assets the Library will receive at some later date.
Charitable Lead Trusts
There are two types of Charitable Lead Trusts, a Grantor
Charitable Lead Trust and a Non-Grantor Charitable Lead Trust. The first
permits a temporary transfer of assets, usually cash or securities, to
a trustee such as a bank trust department. During the life of the trust,
usually based on a specific number of years up to twenty, the trustee
invests the trust's assets and provides an annual income to the Library
of Congress to support a particular program or initiative. When the trust
ends, its payments to the Library stop and the trust principal
including any accumulated assets are returned to its owner.
The Non-Grantor Charitable Lead Trust is the same except
the assets are transferred to someone else such as a family member. At
the end of the trust, the assets, including any appreciation, are distributed
to the family members or other named beneficiaries.
As a planned gift, the Charitable Lead Trust allows
you to support the Library with income you currently do not need (e.g.
investment income not needed during your working years), but which you
may need at some later date (e.g. during your retirement).
Matching Gift Programs
By checking with your employer, former employer, or
a board you may serve on, you may discover that the company or organization
will match the contribution you make to the Library of Congress. Many
companies offer a matching gift program including some that will double,
triple and in some cases, quadruple your own gift.
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