Becoming a Donor / Ways to Give
Cash Gifts
Cash gifts In any amount are appreciated by the Trustees of the Endowment Fund and by those Kappa Sigma undergraduates who benefit from the generosity of its members. Gifts can be made by check, check debit or credit card charge. The Kappa Sigma Endowment Fund is a 501(c)3 charitable organization meaning your gift is tax deductible.
Example: Mike makes a donation of $10,000 to the Endowment Fund. Assuming a 35 percent top tax bracket his actual out of pocket cost is $6500. Depending upon the tax laws of his state the savings could be higher. Click on the link below to make your donation online.
Donate by use of credit card or bank account debit.
Appreciated Stock Gifts
Many donors have elected to support the Kappa Sigma Endowment Fund with gifts of appreciated stock. This can result in significant tax savings to the donor.
Example: Thomas donates stock valued at $100,000 that he bought twelve years ago for $20,000. He donates the stock to the Kappa Sigma Endowment Fund. This results in a $100,000 deduction from his taxable income for the year In which the stock is donated. Assuming a 35 percent tax bracket, Thomas' tax saving for the year amounts to $35,000. This is subject to the maximum charitable donation in a single year rule. Thomas should first consult his tax advisor.
Gifts of Property
Gifts of property are another way to support the work of the Kappa Sigma Endowment Fund. These gifts are subject to acceptance by the Trustees and for recognition purposes are based upon the appraised value.
Example: Charles owns a rental home that he bought fIfteen years ago for $40,000. The property is now appraised for &85,000. He deeds the property to the Endowment Fund and receives a deduction from his taxable income that year of $85,000. Assuming that Charles is in the 35 percent tax bracket this amounts to an income tax saving of $29,750. Depending upon the tax laws of his state the total tax saving could be more. Charles should first contact his tax advisor.
Planned Giving
A Kappa Sigma alumnus who wishes to help insure the future well being of the Order should consider the possibility of "planned giving". Brothers who participate in one of these plans become members of the Kappa Sigma Heritage Society, are recognized in the Caduceus and at Conclaves. They also receive a distinctive lapel pin. There are many options available to achieve this goal that are explained below.
Life Insurance
A popular method of supporting the work of the Kappa Sigma Endowment Fund in the future is naming the Endowment Fund as beneficiary of a life insurance policy. Thus, when the donor joins the Chapter CelestIal the Endowment Fund will receive the death benefits from the policy. There are two ways this can be done. First, the donor can simply name the Endowment Fund as the beneficiary and pay the premiums directly to the insurance company. The second method is to name the Endowment Fund as beneficiary, donate the policy to the Endowment Fund, and make regular contributions to the Endowment Fund in the amount of the premiums. This method can result in significant tax savings for the donor.
Example: Roger buys an insurance policy in the amount of $100,000 with the Kappa Sigma Endowment as the beneficiary. He donates $500 per quarter to the Endowment Fund which is the amount of the premiums. Ha receives a $2000 deduction from his gross income each year. Assuming he is in the 30 percent tax bracket, his income tax saving is $600 per year.
Naming the Kappa Sigma Endowment Fund as Beneficiary in your will
The Kappa Sigma Endowment Fund is recognized by the Internal Revenue Service as a 501(c)3 charitable organization and thus bequests to the Endowment Fund are free of estate tax charges. There are certain restrictions as to the amount of an estate that qualifies for this treatment. Therefore donors should consult with their tax advisor.
Charitable Remainder Trusts and Other Life Income Gifts
You may make a life income gift to the Kappa Sigma Endowment Fund by irrevocably transferring money, securities or other property to a trustee. The trustee may be yourself, a financial institution or the Kappa Sigma Endowment Fund.
The trustee manages the investment of the trust assets and pays an income to you, your designated beneficiaries, or both. The income payments continue for the remainder of the beneficiary's life or in case of unitrusts or annuity trusts for a term of up to 20 years. Thereafter, the remaining trust principal goes to the Endowment Fund to support the educational programs administered by the Fund.. There are several principal types of life Income gifts. One of them should be ideally suited to your particular circumstances. They are described below.
The landmark Tax Reform Act of 1969 defined charitable remainder trusts as a way of charitable giving that has since benefited thousands of educational, charitable and religious institutions and tens of thousands of their donors. Unlike tax shelter investments that serve little economic purpose except tax avoidance, these charitable giving plans enable you to make substantial gifts to charitable organization(s) and assure you a life income as well as tax benefits.
The charitable remainder trust is an extraordinary plan. You transfer assets to this type of trust in return for income for a period of years or your lifetime. This income may be paid to you, your spouse or another Individual. At the death of the surviving beneficiary, the remaining principal in the trust is transferred to the charitable organization(s) of your choice.
You can design your trust to fit your own special needs. First, you decide how much you would like to put into the trust. Second, you determine the income you would like to receive from the donated assets. The rate of return you select must be at least 5 percent. Usually the rate selected is between 5 and 7 percent. The best rate for you will depend upon the number of beneficiaries you select and their ages. Third, you decide whether you want the income amount or the income percentage to remain constant each year.
There are two types of charitable remainder trusts:
Annuity Trust
This type of trust will pay you, year after year, the same dollar amount you chose at the outset. The income payments are fixed, based on the starting valuation.
Example: Paul transfers $100,000 to fund her annuity trust and receives $6000 per year for life, payable in quarterly installments of $1500 each. He prefers having a payout that will not change, regardless of the yield or the value of the trust's agreement. If necessary some of the distribution can be paid from principal, though this would reduce the amount of your ultimate gift. On the other hand, any yield in excess of the payout is retained by the trust, thus increasing the ultimate gift.
UniTrust
This type of trust will pay you each year a fixed percentage of the fair market value of the trust's assets, as revalued annually. This means your income is variable. If the value of the trust increases, so does your income and, ultimately, your charitable gift. A unitrust must distribute at least 5 percent of the annual market value of the assets In the trust.
Example: Luke funds a unitrust with $100,000 and arranges payouts each year equal to 6 percent of the value of the trust assets, The first year, he receives $6000, One year later the assets are worth $110,000 so Luke receives $6600 for the upcoming year. Luke realizes that if the fair market value is less at the start of the succeeding year, the payout for that year will decrease.
Excellent tax benefits
Look at the major and wide ranging tax savings you can realize when you create a charitable remainder trust. First, when you fund the trust, you immediately obtain the benefit of a sizeable income tax charitable deduction. This is equal to the present value of the remainder interest ultimately payable to the Endowment Fund, based on Internal Revenue Service tables of life expectancy.
You can fund your charitable remainder trust with cash, securities or other property. Highly appreciated assets that generate low current income are an ideal funding medium. While you would be reluctant to sell such assets directly because of the tax you would pay on the gain, you can transfer them to the trust without incurring capital gains tax. The trust could then sell the assets without incurring any tax and reinvest the proceeds in order to secure a higher current income yield.
Example: John, age 75, owns stocks with a market value of $100,000, but they pay dividends at a rate only 2 percent. He decides to transfer these securities to a charitable remainder annuity trust that will pay him 7 percent, thus increasing his annual income by $5000. If he sold his stocks instead, he would pay a large tax on his capital gain. Their cost basis is $30,000, compared to the current market value of $100,000, resulting in a gain of $70,000. At a federal capital gains rate of 15 percent, the resulting tax would be $10,500. This would leave him with only $89,500 to invest, so he would have to find stocks that pay a dividend of more than 8 percent in order to receive the same income.
Other options may be available for planned giving. For further information contact the Kappa Sigma Endowment Fund at 434/979 5733 or consult your tax advisor.
Please note that the Kappa Sigma Endowment Fund is in NOT providing tax advice or legal advice. For further tax advice or legal advice contact your tax advisor, financial advisor or attorney.