Donate

A donor-advised fund, or DAF, is a charitable fund that you can set up with a qualified sponsoring organization (such as the Northern Colorado Community Foundation or possibly your own financial services firm) to support your favorite charities, such as the Friends. You can contribute cash, securities or other assets to your DAF, generally resulting in an income tax deduction, and you can request that grants be made from time to time from your DAF to the Friends and other favorite charities. It is important to check with legal and financial advisors to learn how to set up and benefit from a DAF.

During your lifetime, if you are over 70 ½ years old, you may make a direct gift from your IRA to your favorite charity without incurring income tax. This IRA Qualified Charitable Donation can count toward your annual required minimum distribution.

You can also name the Friends as a direct or contingent beneficiary of your IRA, payable at your death. Final distributions paid to charities are not subject to income tax, in contrast to IRA distributions paid or transferred to individuals upon your death. Check with your legal and financial advisors to see whether either type of IRA gift might be of interest to you.

You can give real estate or interests in real estate (for example, royalty interests) to the Friends without being subject to income taxes on unrealized gain. The Friends, as a 501(c)(3) nonprofit affiliated with the Community Foundation of Northern Colorado, has the expertise to help process such a donation. You can do the same at death through the provisions of your Will or Trust. It is important to check with legal and financial advisors about this type of gift.

You can give appreciated stocks, bonds, mutual funds and other financial investments directly to the Friends without incurring income tax on unrealized gain. The Friends, as a 501(c)(3) nonprofit affiliated with the Community Foundation of Northern Colorado, has the expertise to help process such a donation. Check with your financial and legal advisors as well as the Friends before attempting to transfer any of these assets.

Also, any of these types of assets held through an investment advisor can be directed to the Friends at your death by naming the Friends as a beneficiary on your investment account. These payouts are typically made soon after death with a minimum of complexity. Final distributions made to a charity should be income tax free. Again, check with your legal and financial advisors.

Charitable annuities involve the donor making a sizeable gift to a nonprofit which then purchases a qualified annuity. The donor receives regular payments throughout his or her remaining lifetime, and at death, the balance of the annuity is paid to the nonprofit.

Several types of charitable trusts are also possible. They can either provide income to a donor (or other recipient, including a nonprofit) during the donor’s life, or at the donor’s death, depending upon the type of trust set up to administer such a gift. These are more complicated gift vehicles, and experienced legal advisors should be consulted to discuss any of these trust options.

One of the easiest ways to benefit the Friends is to name the Friends as a direct beneficiary on your life insurance policy. Shared beneficiaries are often listed on life insurance policies, and even a gift of five or ten percent can show your support for the Friends. Proceeds are typically paid to beneficiaries soon after a person’s death. Life insurance proceeds are usually not subject to income tax. You can also transfer your existing life insurance policy to the Friends with possible tax benefits. Check with your insurance agent and other advisors.

In addition to IRAs (see above), non-IRA retirement plans (for instance, 401(k) plans) can also be a good vehicle for making gifts at death without subjecting the recipient charity to income tax. You can name the Friends as a beneficiary on your plan as a total or partial beneficiary, or as a contingent beneficiary. Check with your legal or financial advisors to learn more.

In your Will or Trust you can name the Friends as a direct or contingent beneficiary of your estate. You can give the Friends a gift of a certain amount or instruct that a percentage of your estate be paid to the Friends after your death. Many options for benefiting the Friends can be accomplished through these estate planning documents. Check with your estate and legal advisors for details.