Invest in Charity: A Donor's Guide to Charitable Giving


A Complete Guide to Personal Philanthropy

Are you one of the newly wealthy with an interest in "giving back" . . . an heir to money you'd like to share with a favorite cause . . . or simply someone who would like to do good in your community? There are more opportunities than ever for people of every financial station to make a difference through charitable giving. But how do you choose among the many options available, and how do you know which type of gift is best for you?

Invest in Charity: A Donor's Guide to Charitable Giving will teach you everything you need to know to devise and follow an effective charitable giving plan. It explains how to find the right charity; understand the tax, estate, and financial considerations; and select a gift–whether it's a one-time cash gift or a lifelong annuity. Covering everything from researching the legitimacy of a nonprofit organization to navigating the tax and estate laws that apply to you, this guide will help you make your bequest with complete confidence that it's right for your charity and for you.

RON JORDAN is Director of New Mexico State University s planned giving program. He has been a member of the bar since 1975 and is a graduate of the New England School of Law. As an assistant professor at the university, he teaches courses on financial planning and consumer economics. Previously, he taught courses in federal income taxation and estate planning. Jordan is the former Director of Planned Giving at Boston University. He also consults with nonprofit organizations.

KATELYN L. QUYNN is Director of Massachusetts General Hospital s planned and major gift program. She was named Planned Giving Professional of the Year in 1996 and is a past board member of the National Committee on Planned Giving. She graduated from Tufts University and Boston University School of Law.


Chapter 1. Engaging in Philanthropy.

Philanthropy in the United States.

Who Are the Nation's Past and Future Donors and Where Do You Fit In?

Donor Motivations: Why Make a Gift?

Getting Started.

The Donor's Action Plan.

Chapter 2. Selecting a Charity to Benefit from Your Philanthropy.

501(c)(3) Charities.

You and Charity.

What Does Philanthropy Mean to You?

Charities A to Z.


Due Diligence.

Visit the Charity.

Web Resources.

Chapter 3. About the Charity.

Frequently Asked Questions.

The Process.


Vice President for Development (Advancement). Board of Trustees (Directors).

Development Office.

Annual Giving.

Major Gifts.

Planned Giving.


Gift Accounting and Processing.

Computer Services.

The Charity's Gift Review Committee.

The Charity's Investment Policies.

The Charity's Portfolio.

Separately Invested Endowed Funds.

Spending Provisions.

Management Fees and Expenses.


Chapter 4. Professional Advisors, Family Members, and Your Philanthropy.

Professional Advisors.


Financial Advisor.

Stockbroker/Mutual Fund Companies.

Certified Public Accountant.

Trust Officer.

Insurance Agent.

Development/Planned Giving Professional.

What to Ask When Selecting an Advisor.

Charitable Giving and Family Dynamics.

Working with Friends and Mentors.


Chapter 5. How Will the Gift Be Used? Endowed Funds.

Frequently Asked Questions.

Unrestricted Gifts.

Restricted Gifts.

Current Use Awards.

Endowed Funds.

Creating an Endowed Fund.

Financing Your Endowed Fund.

Fund Description.

Mechanics of a Fund Description.


Chapter 6. Types of Charitable Gifts.

Frequently Asked Questions.

Annual Gifts.


Major Gifts.

Planned Gifts.

Gifts in Kind.

Structured Gifts.

Negotiating Gifts.

Making the Right Decision.


Chapter 7. Basic Income Gifts: Charitable Gift Annuities, Deferred Gift Annuities, and Pooled Income Funds.

Frequently Asked Questions.

Charitable Gift Annuities.

Deferred Gift Annuities.

Pooled Income Funds.


Chapter 8. Trusts.

Frequently Asked Questions.

Parties to a Trust.

Trust Powers.

Gifts to a Minor and the Uniform Transfer to Minors Act.

Gifts to a Minor and a Minor's Trust.

Revocable Inter Vivos Trust (Living Trust).

Charitable Remainder Trusts.

Qualified Terminable Interest Property (QTIP) with Remainder to a Nonprofit.

Charitable Lead Trusts.

Nongrantor Charitable Lead Trusts.

Nongrantor Charitable Lead Annuity Trusts.

Nongrantor Charitable Lead Unitrust.


Chapter 9. Gifts Through Your Estate.

Frequently Asked Questions.

Tax Law and Charitable Gift Planning.

The Will.

Parts of a Will.

Suggested Language for Charitable Bequests.

Legally Binding Documents for Bequests.


Property Held Out of State--Ancillary Administration.



Chapter 10. Incorporating Charitable Giving and Retirement.

Frequently Asked Questions.

Using Planned Giving Vehicles to Assist in Retirement Planning.

Retirement Vehicles for Charitable Giving.

Tax Consequences of Charitable Gifts of Retirement Accounts at Death.

Types of Retirement Plans.

Ways to Transfer Retirement Assets to a Charity.

In Summary.


Chapter 11. Private Foundations, Supporting Organizations, and Donor-Advised Funds.

Frequently Asked Questions.

Private Foundations.

Supporting Organizations.

Donor-Advised Funds.


Chapter 12. Gifts of Securities.

Frequently Asked Questions.

Securities Held by the Donor's Stockbroker or Banker.

Securities Gifted Via DTC.

Securities Held in the Donor's Possession.

Donor Wishes to Give Part of a Stock Certificate.

Value of the Gift.

Date of the Gift.

Your Charitable Income Tax Deduction.

Gifts from Dividend Reinvestment Plans.

Series EE and HH Bonds.

Zero Coupon Bonds.

Gifts of Shares of a Mutual Fund.

Closely Held Stock.

Valuation of Closely Held Stock.

Restrictions on Transfer.

Gift of Closely Held Stock -- An Arm's-Length Transaction.

Closely Held Stock and Debt.

Transfer to a Charitable Remainder Unitrust.

S Corporation Stock.

Preferred Stock -- Section 306 Stock.


Chapter 13. Gifts of Real Estate.

Frequently Asked Questions.

Factors to Consider.

Outright Gifts of Entire Property or Fractional Interest.

Gift of a Personal Residence or Farm with a Retained Life Estate.

Gifts of Real Estate to Fund Charitable Gift Annuities.

Charitable Deferred Gift Annuity.

Gift of Real Estate to a Charitable Remainder


Conservation Easements.


Chapter 14. Gifts of Noncash Assets: Tangible Personal Property, Intellectual Property, and Inventory.

Frequently Asked Questions.

Tangible Personal Property.

Definition of Tangible Personal Property.

Transfer of Personal Property.

Related Use.

Gift of a Future Interest in Tangible Personal Property.

Unrelated Use.

Intangible Assets.


Tax Considerations for Gifts of Noncash Assets.

Substantiation Requirements.


Gifts of Art Worth $25,000 or More.

Tax Deductibility of Appraisal.

Form 8282.


Chapter 15. Gifts of Life Insurance.

Frequently Asked Questions.

Ways to Use Life Insurance.

Charitable Income Tax Deduction for an Outright Gift of a Paid-up Policy.

Outright Gift of a Partially Paid-up Life Insurance Policy.

Charitable Income Tax Deduction for a Partially Paid-up Policy.

Charitable Income Tax Deduction When Donor Makes Premium Payments.

Short-term Endowment Policies.

Insurance Used in Asset Replacement Arrangements.

Funding a Charitable Remainder Net Income Unitrust/Flip with Life Insurance.

Reporting Requirements.


Chapter 16. Tax Consequences of Charitable Gifts.

Frequently Asked Questions.

Federal and State Income Taxes.

Fair Market Value.

Cost Basis.

Deductibility of Tangible Personal Property.

Acceleration of Deduction and Alternative Valuation.

Deduction Reduction Provision.

Pledge and Promissory Note.

Benefits to Donors.

Ordinary Income Reduction Rule.

Income in Respect of a Decedent.

Deductibility of Charitable Contributions for Business Organizations.


Capital Gains Taxes.

Federal Estate and Gift Taxes.

Legislative Proposals.

Gift Tax Annual Exclusion.

Payments for Tuition and Medical Bills.

Gifts by Husband and Wife/Unlimited Marital Deduction.

Streams of Income and Gift Tax Consequences.

Sale of a Personal Residence.

Gifts of Real Estate Subject to a Mortgage.

Tax Implications of a Bargain Sale.

Substantiation Requirements.


Partial Interests.


Chapter 17. Consumer Issues and Charitable Giving.

Philanthropy Protection Act of 1995.

Truth in Philanthropy.

Donor Rights: The Planned Gift Should Be Compatible with the Donor's Goals.

The Charity's Responsibilities.

Unfair and Deceptive Practices.