The Endowment Fund and Planned Giving
“. . . remembering the words of the Lord Jesus, for he himself said, “It is more blessed to give than to receive.’”– Acts 20: 35
The endowment fund of Grace Episcopal Church is a perpetual fund established by the Vestry and administered by the Endowment Committee. The objective of the Fund is to conserve the principle and make use of only the investment income. Distributions from the Fund shall be used for needs that fall outside the Church’s Annual Operating Budget including: Capital Improvements, Debt Reduction, Building Programs of Grace Episcopal Church, Educational Scholarships or Grants to members of Grace Episcopal Church and Outreach.
The purpose of planned giving is to accumulate financial assets, the income from which will be used for the long-term needs of the parish.
Planned giving is a way for you to help ensure the future of Grace Episcopal Church and its ongoing missions while providing for your needs and those of your loved ones. With careful planning a donor has the opportunity to minimize income and estate taxes, provide more for his or her heirs and ultimately make a larger gift to the church than would otherwise be possible.
Planned giving can take many forms. On the following pages of this brochure a few of the more common opportunities are outlined. In some cases the best solution may be simply to provide for Grace Episcopal Church in your will. In other cases there may be a significant benefit from one of the other options suggested in this brochure.
Scripture reminds us that everything we have comes to us as a gift.
Members of Grace Episcopal Church’s Endowment Committee look forward to discussing these giving and legacy opportunities with you and, pursuant to your instructions, with your financial advisors. We would be pleased to provide personalized illustrations to address your particular needs. Please do not hesitate to call upon any of the members of the Endowment Board. For Endowment Committee member names please call the church office.
All gifts to Grace Episcopal Church are subject to acceptance by the Gift Review Committee, which consists of the Rector, the Wardens and the Treasurer.
This page is intended to be only an introduction to planned giving. Please consult with your financial advisors before making any decisions. Tax effects discussed in this brochure are based on general principals of correct tax law at time of printing, which may change. Tax results vary depending on individual circumstances. Donors should obtain tax advice from a qualified professional as to the specific tax consequences of their donation. 05/2008
Perhaps the easiest and most common way to make a planned gift is through your will.
Wills are frequently updated to reflect changes in tax law and changes in the donor’s overall estate plan, providing an opportunity for bequests. For example, under present law the federal exemption amount changes every year until 2011.
Bequests contained in a will reduce the size of the estate subject to federal and state tax. Bequests of appreciated property result in an additional benefit in that the capital gain tax is avoided.
In your will you may give to the church a set amount of money, a percentage of your estate or a specific asset. The church may be made a contingent beneficiary, to receive funds after providing for others to your satisfaction.
Language for including Grace Episcopal Church in your will may be as succinct as the following statement:
I give and bequeath to the unrestricted Endowment Fund of Grace Episcopal Church in Asheville, NC ______________________ (state amount, carefully identify the asset, or state the percentage of the estate).
Life Income Gifts
Life Income Gifts will provide income to you for the remainder of your life. A significant tax benefit is created now and in the future Grace Episcopal Church will receive a generous bequest. Here are some examples:
Charitable Gift Annuity <> A charitable gift annuity may be established with the service provider of your choice. This method offers some of the following benefits:
• The donor and/or a designated beneficiary will receive a fixed monthly distribution for the remainder of his or her life and/or that of the designated beneficiary. A portion of these distributions may be exempt from income tax.
• The donor will receive a current federal income tax deduction for a portion of the gift. The amount of the deduction will be based upon the age of the donor and/or beneficiaries.
• A portion of the gift is excluded from estate taxes.
• If the gift is funded with appreciated property, capital gains taxes will be avoided.
Pooled Income Fund <> A pooled income fund is much like a charitable gift annuity. The funds, however, are invested in a broader range of assets, and the distributions to the donor and/or designated beneficiary will vary based on the performance of the pooled income fund.
Charitable Remainder Trust <> A charitable remainder trust typically involves larger sums of money ($100,000 or more) and is similar to a pooled income fund. In addition, •It provides income for life, a current income tax deduction, relief from capital gains taxes if funded through appreciated property, and a possible reduction in estate taxes.
• The charitable remainder trust may receive additional contributions over time.
• A portion of the charitable remainder trust assets may be retained as a hedge against inflation.
• The donor may select any qualified trust company to act as trustee.
Life insurance is a convenient way to make a gift to Grace Episcopal Church. Examples of the use of life insurance for planned giving include:
• Purchasing a new policy and making Grace Episcopal Church the owner and beneficiary of the policy. This may make a larger gift to Grace Episcopal Church possible. All premium payments qualify for a tax deduction.
• Making Grace Episcopal Church the owner and beneficiary of an existing policy. The donor receives a tax deduction in the current year equal to the value of the policy and a tax deduction in subsequent years for future premium payments.
• Making Grace Episcopal Church a contingent beneficiary of an existing policy. The church would receive the proceeds of the policy if the designated beneficiaries pre-decease the insured.
• Using life insurance in conjunction with another planned gift. For example, life insurance can be purchased with the income from a life income trust, which allows a gift today while preserving the value of the estate.
Real estate, stocks and bonds, and other tangible property such as art, antiques and jewelry make wonderful charitable gifts. In some cases the gift will be outright, while in other cases the donor will receive a benefit for the remainder of his or her life. For example:
• Through a charitable life estate contract, you may deed your home or other real estate to Grace Episcopal Church and still continue to live on the premises and/or receive income from the property for as long as you or your beneficiary lives. The donor receives a significant tax deduction now and excludes the value of the property from his or her estate.
• Appreciated property may be donated directly to the church, avoiding capital gains taxes.