Messenger - Vol. 1, No. 1, Page 45 Fall 1991 1990-91 Report of Private Support How to make your gift to the University of Delaware The lasting strength and continuing growth of the University depend greatly on the generous support of alumni and friends. Your gift plays a vital role in helping the University achieve its teaching, research, and public service missions today-and in the future. There are a variety of common ways in which gifts may be made to the University. By carefully planning your gift, you may be able to take advantage of substantial tax and financial benefits. These advantages may allow you to support the University to a much greater extent than you believed possible. In planning your gift, you may find that it is advantageous to contribute assets other than cash. You may also structure your gift to take effect in the future, and you can even retain an income stream from the gift asset for your lifetime and/or the lifetime of another person. As you plan your future gift, we hope you will speak with representatives about your plans and about the purposes which you would like your gift to serve. How do I make a gift of cash Your gift is tax deductible up to fifty percent of your adjusted gross income, when you itemize. If you cannot make use of the entire deduction in the year of your gift, you may carry it forward for up to five additional years. Checks should be made payable to the University of Delaware. A cash gift of $1,000 provides a charitable income tax deduction of $1,000. If you have a marginal tax rate of 28 percent, the actual cost of the gift to you is only $720, due to the tax savings provided by the charitable deduction. May I donate stock? Yes, this can be a very attractive method of giving. There are two benefits for most donors for gifts of appreciated securities held long term (i.e. held at least one year and a day for assets acquired after 1987): 1. An income tax charitable deduction for the full fair market value of the securities, and 2. Avoidance of tax on the appreciation in value. The deduction is limited to 30 percent of adjusted gross income in the year the gift is made, with a five-year carry forward of any excess. (The appreciation portion of such gifts may be subject to the alternative minimum tax. Please consult your tax advisor regarding this matter.) What other assets may I give? You may donate other capital assets, such as stock in closely-held companies, real estate, royalty interests, patents and tangible personal property (works of art, collections, books, jewelry, etc.). Federal income tax savings may be generated by virtue of the charitable contribution deduction, and future estate taxes and administrative costs may be reduced significantly. What about life insurance? You may generally donate insurance by naming the University irrevocably as the owner and beneficiary of a policy on your life. The present cash surrender value of the policy generally has been deductible as a charitable contribution. Your continued payment of the premiums also has generally been deductible. A paid-up policy generally yields a charitable deduction equal to its replacement value. Can my company make a gift? Yes, your company-a partnership or corporation-can make a gift to the University in your name, realizing tax savings for the company. How do matching gifts work? Many companies have programs through which the company matches your gift to the University. Some companies will double or triple the amount of your gift; some match life-income gifts, as well as outright gifts. There is usually a ceiling on the amount a company will give in one year. By planning your contributions over a number of years, you may be able to add a significant number of corporate dollars to your own. How do I go about making a gift through my will? The University receives vital support through charitable bequests from generous alumni and friends. A charitable bequest may provide substantial estate tax savings. You may name the University as a beneficiary or contingent beneficiary, and it is also possible to provide under your will for the University to receive the gift only after the gift assets have been used to provide lifetime income for a family member or other individual. How does a life income gift work? The University's life income plans include the pooled income fund, the charitable remainder unitrust and the charitable remainder annuity trust. All of these plans enable a donor to make a substantial gift of income-producing assets, while retaining income from those assets. Under life income plans, the donor irrevocably transfers assets to the University as trustee (or to an independent trustee) and receives income for his or her lifetime, or for the lifetime of any other beneficiary the donor designates. At the end of the surviving beneficiary's lifetime, the remaining trust assets are available to the University for its general educational purposes. Income distributions may also be limited to a term of years. These life income plans offer a number of attractive benefits. A portion of the gift's value, depending upon the terms of the trust and the ages of the income beneficiary(ies), is a tax deductible contribution. In addition, donors may actually increase their spendable income through careful planning of a life income gift. There are also potential gift tax and estate tax benefits. A donor may also contribute a residence or farm while retaining the right to occupy the property for life or for a term of years, and receive an income tax charitable deduction at the time the arrangement is made. A person who has included the University as a beneficiary in a will, but who anticipates no lifetime need for the principal of the fund, may find it more advantageous instead to give all or a portion of these assets to the University now under one of these life-income plans. If you are considering a gift to the University and have any questions, please call or write: Louis J. Beccaria, Ph.D. Director of Development Academy Building University of Delaware Newark, DE 19716 Phone: (302) 451-2104 For more information on bequests, life-income gifts, or gifts of capital assets, please call or write: Paula M. Tilmon, Esq. Development Associate, Planned Giving Academy Building University of Delaware Newark, DE 19716 Phone: (302) 451-2104