how to make a donation

Planned Giving

In addition to the proceeds from the annual AT&T Pebble Beach National Pro-Am and the Wal-Mart First Tee Open at Pebble Beach tournament, the Monterey Peninsula Foundation is supported by a variety of funding sources such as individual donations and corporate contributions.

Through the Monterey Peninsula Foundation, individuals and corporations have chosen to give something back while at the same time increasing the effectiveness of their philanthropy.

Gifts to the Foundation are an investment in the future and the Foundation prides itself on the stewardship of donation income. Every dollar received goes to support the mission of the Foundation.

Making a donation through a planned gift is a great way to create a legacy of support for our charities while providing for your own future. Planned giving allows donors to make a significant impact on those in need over an extended period of time. Additionally, there are certain benefits from planned giving such as:

• Potentially increasing income
• Providing a way of satisfying personal, financial and charitable goals
• Receiving substantial tax benefits.

Ways to Give

There are many ways to structure charitable giving. Some of the most common methods of giving include:

Outright Gifts

Outright gifts can be made at any time. Cash donations are common but many other types of assets can be donated outright.

Wills & Bequests

A bequest is a gift of property or assets to a beneficiary as defined in a will. There can be long-term tax benefits because charitable bequests can reduce estate taxes. If the bequest involves appreciated assets, there can also be other tax benefits as well.

Specific language is used to affect a bequest. Please consult your attorney to make sure your wishes are carried out properly.

Using funds from a retirement account to make bequests is often a good strategy. If there is a balance in your retirement account at your death, not only is there a potential income tax burden, but there may be estate taxes as well. Estimates are that taxes could eat up as much as 70-75 percent of retirement assets under certain circumstances. Careful planning concerning retirement funds needs to be done.

Another option to consider is gifting any life insurance policies that are no longer necessary to meet family needs.

Charitable Gift Annuity

One of the simplest and most popular charitable gifts is a charitable gift annuity, which can provide tax benefits now and a lifetime income for the donor and a beneficiary if desired. This is first and foremost a gift. The designated charity accepts the gift and in return obligates itself to pay a fixed and specified dollar amount to the annuitant (donor) or annuitants for life.

A gift to fund a charitable gift annuity immediately becomes the property of the charity and is an irrevocable gift. The charity is legally bound to fulfill its commitment to pay the annuitants for life. Some states have regulations regarding the issuance of charitable gift annuities.

A portion of each payment under the gift annuity contract is treated as non-taxable return of capital. The remainder of each payment is treated as taxable income. The amounts are determined at the time the annuity contract is signed. If the gift involves an appreciated asset, the recognition of the capital gain portion of the gift is prorated over the life expectancy of the donor.

There are two types of charitable gift annuities – immediate and deferred. An immediate annuity begins paying income immediately after the annuity agreement is signed.

A deferred charitable gift annuity begins the income payments at a specified date in the future. A gift is made and the charitable organization promises in return to pay the donor an income stream that begins on a specified future date. The payment rate is generally higher for a deferred annuity as the donor’s age when the payments begin is the age used to calculate the rate.

An attractive benefit of a deferred gift annuity is that it enables a donor to make a gift now as well as take a charitable income tax deduction now, which might be while the donor is in a higher tax bracket. Income may be deferred, for instance, until after retirement, when the rate of tax will presumably be lower. Deferred gift annuities are creative ways to delay income to pay for future expenses, supplement your retirement income, or provide help with assisted-care living arrangements that may be inevitable.

Gift Annuity Benefits

• As a portion of the annuity is a gift, you’ll receive an income tax deduction for the gift if you itemize.
• A portion of the annual annuity income is exempt from Federal taxes.
• You may save tax on the capital gain (profit from an investment).
• You avoid estate taxes, probate, and costs on the amount involved.
• The charity will have the use of the funds after the beneficiary’s lifetime.
• The payments are fixed and will not fluctuate with interest rates.
• Your annuity is as safe as the organization you donate to since the total assets of the organization stand behind their agreement to make payments to you.

Generally the funds used to set up a charitable gift annuity may be structured as an unrestricted gift or to fund a particular item or program that is important to you (with the consent of the charity).

Charitable gift annuities are the gifts that keep on giving. Rates on charitable gift annuities are based on age and whether the contract is immediate or deferred.

Appreciated Stock

The gift of an asset, often common stock or mutual fund shares, is a valuable way to make a contribution and receive tax benefits based on the value of the asset(s). Appreciated assets have a higher market value than their basis or tax purpose value (in most cases, their cost). If sold by an individual at a price higher than their basis, such assets would potentially generate a taxable capital gain (either long-term or short-term depending on the holding period).

If you transfer the appreciated asset, you can receive a charitable tax deduction based on the current market value of the gift and avoid tax on any capital gains. The designated charity can then sell the asset for the full market value and, as a nonprofit, does not have to pay tax on any capital gains.

While appreciated assets often involve gifts of stock, other marketable assets, such as land, antiques, and homes can be utilized as potential gifts with the possibility of valuable tax benefits. However, these other assets are reviewed on a case-by-case basis. For more information about gifts of appreciated assets, please contact us so we can respond to your specific needs.

Retirement Assets

Contributions to retirement plans, such as IRA’s, 401K’s and 403B’s, provide an excellent opportunity for long-term growth because they grow tax-free. The money in retirement plans are taxed only when they are withdrawn. Additional savings can occur if the recipient is in a lower tax bracket when the funds are withdrawn (for example, during retirement) than when the investments were growing.

However, you should carefully plan any withdrawals from your retirement accounts. Not only is there a potential income tax burden, but if there is a balance in your retirement account at your death, there may be estate taxes as well. Estimates are that taxes could eat up as much as 75-80% of retirement assets under certain circumstances.

Retirement plan funds (IRA, 401K, 403B, etc.) are an excellent asset to fulfill bequests. By designating the Monterey Peninsula Foundation as a beneficiary (it can be a contingent beneficiary after the death of a spouse), funds pass to the Foundation free of taxes. It is possible to set up the Monterey Peninsula Foundation as the recipient of the entire remainder in the account or establish a percentage of the balance to fulfill your bequest.

Please note – the designation of the Monterey Peninsula Foundation as a beneficiary of retirement fund assets cannot be simply written in your will or trust. The Foundation must be designated as a beneficiary of the retirement plan.

There are other ways to use retirement fund assets to fund charitable gifts. For example, qualified retirement fund assets may be placed in a charitable remainder trust by using a testamentary trust to provide for children or a spouse. There may be estate tax savings as a result.

Everyone’s personal circumstances are different, so please consult your tax advisor concerning the use of qualified retirement funds. We would be glad to make suggestions that could help you accomplish your goals.

Life Insurance

There are several ways you can use life insurance as the basis for a charitable gift.

• Make the Monterey Peninsula Foundation a Beneficiary of Your Life Insurance Policy
  You may wish to make the Foundation the beneficiary (or a contingent beneficiary) of a life insurance policy as a way to make a sizeable future gift. You retain lifetime ownership of the policy and maintain the right to cash it in, borrow against it and/or change the beneficiary. A gift of this nature is treated much like a bequest made through your will. Because you retain the ownership of your asset (the policy), you will not receive an income tax charitable deduction for this future gift or for your premium payments during your lifetime. The policy’s proceeds will be included in your gross estate, and your estate can take an estate tax charitable deduction.
• Make a Gift of Your Policy
  You may wish to transfer ownership of a policy to the Foundation, or purchase a new policy with the Foundation as the owner and beneficiary. If you make the Foundation the owner and beneficiary of a policy, you are entitled to certain tax advantages.
• Use Life Insurance as a Wealth Replacement Tool
  You may make a current gift to charity and receive a charitable income tax deduction. At the same time, you may purchase life insurance to replace the donated amount or perhaps, the amount your beneficiaries would have received after estate tax. Depending on the circumstances, the charitable tax savings and any life income resulting from the gift may defray the cost of the wealth replacement insurance premiums.
• Create a Life Insurance Trust
  You may want to set up an Irrevocable Life Insurance Trust. An Irrevocable Life Insurance Trust removes the life insurance from your estate to help reduce potential estate taxes while providing other benefits. For example, upon one’s death, the proceeds of the life insurance policy may remain in the trust to provide income for the surviving spouse, but stays outside of the spouse’s estate for estate tax purposes. The trust could be used to distribute proceeds to children of a previous marriage. Although Irrevocable Life Insurance Trusts can be more complicated than owning life insurance directly, they may be an attractive option in certain situations.

As with all matters concerning estate planning, please consult your estate and tax specialists.

Charitable Remainder Trusts

A charitable remainder trust is established for the life of the donor (also trustor or grantor) and/or for the life of any beneficiary(-ies). A charitable remainder trust is irrevocable; once established, it cannot be changed. A trust can be established to provide income for one or more lifetimes, or for a specific period of time. If a specific period of time (rather than lifetime) is chosen, the time period cannot exceed 20 years.

A charitable remainder trust is an attractive planning tool for the disposal of highly appreciated assets. While the assets revert to the charity rather than the heirs of the estate, the use of an irrevocable life insurance trust in conjunction with a charitable remainder trust could replace the assets’ value for the heirs.

There are two different types of charitable remainder trusts.

An irrevocable charitable remainder unitrust is a popular way to achieve tax benefits as well as a fixed annual percentage on the value of the assets in the trust. The assets are revalued annually and the amount of income paid to the donor is the set percentage of the unitrust value each year. If the value of the principal in the unitrust declines, the value of the interest portion of the unitrust would decline as well. Conversely, the unitrust interest value would increase if the value of the trust assets increased.

A charitable remainder annuity trust is set up to pay a fixed rate of return based on the initial valuation at the time the property is placed in the trust. The trust assets are never revalued. If the assets of the trust go up in value, the income portion does not change.

Charitable Remainder Trusts provide a good degree of flexibility that is valuable in charitable gift planning. For example, a variation on remainder trusts can be an effective way to make gifts of real estate.

Charitable Lead Trusts

A charitable lead trust is sometimes called the reverse of a charitable remainder trust. While a Remainder Trust provides income tax deductions and capital gains avoidance, the lead trust is primarily an estate planning tool that offers a completely different assortment of benefits to a donor and their heirs. During the term or life of the charitable lead trust, which can be an annuity or unitrust, the stated percentage income is distributed each year to the Monterey Peninsula Foundation and the assets are eventually transferred to the trustor’s or grantor’s designated heirs, usually children or grandchildren.

The Charitable Lead Trust (CLT) is a powerful way to make a future transfer of assets to your heirs at a significantly reduced gift and estate tax cost, while also providing the Monterey Peninsula Foundation with current income. During a specified number of years, the lives of one or more individuals, or a combination of the two, a contribution is paid to the Foundation. A lead trust may be structured to provide a fixed dollar contribution annually (CLAT) or a fixed percentage contribution (CLUT). At the end of the trust term, the assets pass to the donor’s named beneficiaries of the trust. The donors also choose the trustee.

Real Estate

Depending on the circumstances that are involved, gifts of real estate can be an effective means of planning a gift. Much of the individual wealth in America is invested in real estate. While the first thought often is a home or farm, real estate also can involve a vacation or second home, an apartment or commercial building, a shopping center, or undeveloped land.

Often our real estate holdings, be it our house, a second home or investment property, is a significant part of our net worth. Gifts of real estate, therefore, can enable us to make significant contributions. Each piece of property and its unique circumstances needs to be reviewed to determine the suitability of the property as a gift. Generally speaking, a rule of thumb is that an acceptable piece of property is one that can be readily sold.

Also, there are many ways to donate property. It can be an outright gift, a retained life estate, or placed in a trust. There can be significant advantages to using property as a charitable gift.

Living Trusts

A Living Trust is a legal document that enables you to leave instructions for who you want to handle your final affairs and how you want your assets distributed after you die. Living Trusts look a lot like a will but, unlike a will, a Living Trust does not go through probate (providing privacy concerning assets included in the living trust), it prevents the court from controlling your assets if your are declared incompetent, and it gives you (not the court) control over the assets in the trust that you leave to your minor children and/or grandchildren.

A Living Trust can be revocable or irrevocable. When you establish or set up the trust, you are called the Grantor (sometimes Settlor or Trustor). You will also name a Trustee to manage the assets you place in the trust. Many people name themselves, continuing to handle their affairs as they would have without the trust. Married couples often establish themselves as Co-Trustees. In case one of the Co-Trustees becomes incapacitated or dies, the other instantly has control, without court involvement, of the assets in the trust.

A Successor Trustee needs to be named in case you (or both of you in the case of Co-Trustees) becomes incapacitated or dies. This can be an individual (your adult children or dependable family friends) or a Corporate Trustee (a bank). Each type, revocable or irrevocable, has advantages and disadvantages.

Many donors take advantage of smart-thinking tax-planned charitable programs. If you are interested in finding out more about the benefits associated with making a planned gift, please contact us at 800.541.9091.

To donate by check, please complete the gift contribution form and mail with your donation to:

Monterey Peninsula Foundation
1 Lower Ragsdale Drive
Building 3, Suite 100
Monterey, CA 93940

Birdies for Charity Pledges

The Pledge Drive & Bonus Bucks Program
The Pledge Drive component of Birdies For Charity invites Monterey County, San Francisco and Silicon Valley area 501C3 organizations to involve their communities in a pledge drive program, similar to a walk-a-thon, based on the total number of birdies made by PGA TOUR professionals during the 2008 AT&T Pebble Beach National Pro-Am.

Anyone can fill-out a pledge form and pledge, one cent or more per birdie or a flat-rate, to be a part of the program. Donor incentives include various great prizes all awarded through random drawings of completed pledge forms throughout the pledging season (November 1st, 2007 until the end of tournament, Sunday February 10th, 2008).

Each pledge form offers donors a chance to guess the number of birdies that will be made during the tournament. The lucky person who guesses correctly (before contest close, February 6th, 2008) will win the grand prize (winner will be determined by random lottery in the case of multiple correct guesses).

Monterey Peninsula Foundation will invoice those who filled out pledge forms following the 2008 AT&T Pebble Beach National Pro-Am and collect all monies. 100% of the collected Birdies for Charity pledges will go directly to the soliciting charity. As an added bonus, Monterey Peninsula Foundation will provide each charity with a 10% match on all money they raise.