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Planned Giving for Financial Advisors

Gifts That Pay Your Client Income (and provide an income tax charitable deduction)

If your client wants to make a charitable gift but would also like to create an income stream, consider a "life income" planned gift. Each of these vehicles will give your client a current income tax charitable deduction, an income stream for life, and the satisfaction of creating a meaningful gift to Harper College Educational Foundation.

The plans described here all have one substantial advantage over "investment" vehicles you read about elsewhere: these plans produce generous charitable gifts to Harper College Educational Foundation and allow your client to do well by doing good.

In the current economic climate, many of these gifts will produce a better return on your client's money than any of the traditional investment vehicles that are often used to generate retirement income. These gifts often provide a steady rate of return as well, removing the risks of other investment options from your client's retirement plan.

They work like this:

  • Your client makes a gift of cash, appreciated securities, business interests, and/or real estate to create a life-income gift plan.
  • The plan pays your client (or the designated beneficiary) income for a term of years or for life.
  • At the end of the gift term, the remainder will be distributed to Harper College Educational Foundation to be applied to the purposes your client designated.
  • Your client realizes one or more tax benefits from making the gift and, sometimes, continue to receive tax benefits in the form of non-taxable income for a specified period of time.

Your client will get an additional source of lifetime income and an immediate tax deduction for the charitable portion of her gift, and she'll avoid part and defer part of the recognition of capital gain on appreciation.

Options

  • Charitable Gift Annuities

    Contractual arrangements with Harper College Educational Foundation that give your client secure, stable income for life backed by Harper College Educational Foundation’s assets. There are several varieties:

    • Charitable Gift Annuity — Immediate. Your client wants annuity payments to begin immediately.
    • Charitable Gift Annuity — Deferred. Your client is younger or wants to defer the start date of annuity payments until retirement or another set time when supplemental income will be needed (like when a child goes off to college).
    • Charitable Gift Annuity — Flexible. Similar to a deferred gift annuity but your client wants the flexibility to decide later what date the annuity payments will begin.
    • Charitable Gift Annuity — Commuted Payment. Instead of payments that continue for life, your client wants to compress annuity payments into a brief period, e.g. to cover four years of a child's college education or to fill the gap between retirement and when pension payments begin.

  • Charitable Remainder Trusts

    Your client can appoint a trustee to manage assets in a trust that will make regular distributions for life or a period of years. Your client has the security of a payment stream and great flexibility in naming beneficiaries and trustees. There are several types of charitable remainder trusts:

  • Pooled Income Funds

    Your client can pool a contribution with those of other donors, and receive distributions of net income from the fund. There are generally three types of pooled income funds:

    • Growth Pooled Income Fund. Your client wants a stream of income that can grow over time by investing in growth investments.
    • Balanced Pooled Income Fund. Your client wants a stream of income that is stable but will also grow over time.
    • Standard Pooled Income Fund. Your client wants the maximum amount of income, so the fund in invested almost completely in income producing assets.

  • Testamentary Life Income Gift

    Your client can also create a life income gift through the estate plan that will benefit the spouse or heirs.