Planned Giving, also known as Legacy Giving or Gift Planning, is a gift which enables philanthropically minded donors to make larger gifts to the charities they support than they would ordinarily make from their discretionary annual cash flow. Unlike a donation to an annual fund, where the donations are typically smaller in size and used for the immediate needs of the charitable organization, a planned gift is a major gift made during the donor’s lifetime, or after their death, and is a part of their overall estate plan. Common types of planned gifts include:

• Outright gifts of cash or securities.
• Gifts that pay income to the donor for their lifetime or a stated term of years in return for a contribution to a charitable trust.
• Gifts payable at the donor’s death such as a bequest under their will or living trust or naming the charity as a beneficiary of a portion of a life insurance policy or retirement plan.
• Lifetime gifts from your retirement plan.

Gifts That Pay Income For Life:

Charitable Remainder Unitrusts (CRUTs) and Charitable Remainder Annuity Trusts (CRATs) are irrevocable trusts that pay an income stream to the beneficiary (usually the donor) for life and, at the death of the donor, terminate and pay the balance remaining in the trust to the designated charitable beneficiary. These trusts are generally funded with appreciated securities, which the charity liquidates without having to pay capital gains tax. The funds are reinvested, and the donor receives payments based on the market value of the portfolio. The payments can be fixed or fluctuate, based on the value of the portfolio, depending on which type of charitable trust you elect to create. The donor can reserve the right to change the charitable beneficiary should they choose to do so.

Benefits:

• For a Charitable Remainder Unitrust, you, or a trust beneficiary you select, will receive income for life based on a life(s) or a term of up to 20 years. Payments are based on the fair market value of the assets, valued on an annual basis, so the payment will fluctuate. Should the market value rise, you will benefit from the increase in value at the time of valuation. Should the market value decline your payment will decrease based on the value at the time of valuation.
• For a Charitable Remainder Annuity Trust, you, or a trust beneficiary you select, will receive a fixed income for life based on a life(s) or a term of up to 20 years. The annuity payment is based on the initial fair market value of the assets contributed.
• You avoid capital gains tax of the sale of appreciated assets you contribute to the trust.
• You receive a charitable deduction for the charitable remainder portion of the gift.
• At the end of the term the charitable beneficiary receives what remains in the trust.

Gifts From Your Retirement Account:

You can name Prancing Horse as a beneficiary of all, or a portion, of your IRA, 401(k) or other qualified retirement plan after your lifetime. This gift may not be subject to income or estate tax because Prancing Horse is a 501(c)(3) tax-exempt organization.

Benefits:

• During your lifetime you continue to take regular withdrawals from the funds.
• You may remove, or change, the charitable beneficiary at any time should your personal or family circumstances change.
• You could avoid the double taxation that could occur if you designate your heirs as beneficiaries.

Gifts of Appreciated Securities:

In lieu of a cash gift to Prancing Horse, you can donate appreciated securities such as stocks and mutual funds.

 Benefits:

• You receive a charitable deduction on your itemized individual income tax return.
• You avoid capital gains by making a direct gift of the securities rather than selling them and using cash for the gift.
• You don’t have to use annual discretionary cash to make gifts.

Donor Advised Fund:

Many brokerages offer Donor Advised Funds, either directly through the brokerage or via a community foundation. The donor makes an irrevocable contribution to their donor advised fund, receives a charitable deduction in exchange, and makes charitable gifts to qualified charities from the funds on their timetable.

Benefits:

• You and/or your family member(s) can recommend distributions to charities you support.
• The funds can endow and continue to support your charities after your death.
• Using a Donor Advised Fund affords the donor an opportunity to engage younger generations in philanthropic giving.