Gift Planning

There are a number of ways to meet your own needs and help perpetuate SCA's proud tradition of service. By choosing the right assets for your gifts and exploring the wide range of gift plans available, you can maximize the impact of your gifts as well as optimize your tax and financial benefits. As Director of Gift Planning, I am available to assist you.

Click Here to Download an Overview of the Many Ways to Support SCA's Mission - PDF

Many different assets can be used in your gift planning, including cash, stock or mutual funds, real estate, collectibles, life insurance policies and IRAs and qualified retirement plans.

Outright gifts are extremely important to SCA. They enabled SCA to nearly 2 million hours of service last year. SCA also offers a life income gifts program that includes charitable gift annuities and charitable remainder trusts. These arrangements can help you enhance your income for life while providing you with significant income tax and capital gains tax saving. These plans can also help you save for future retirement.

Bequests and other legacy gifts are extremely important to SCA as well, assuring our future ability to prepare new generations of conservation leaders and protect our natural world for years to come. Legacy gifts made through your will, living trust, life insurance policies, or IRAs or qualified retirement plans will all pass to SCA completely free of estate tax.

It is also possible to provide for loved ones and for SCA through arrangements that can provide thosenloved ones with income for life, use of your personal residence or farm, or a future inheritance. All of these arrangements provide significant gift and estate tax savings.

I would be pleased to provide further information on any of these gift arrangements, and to prepare confidential illustrations on how these plans might work for you. Our recommendations should always be discussed with your own legal/tax advisors.

Please look over this information and contact me if you would like to explore ways to support SCA’s mission and meet your own needs. I look forward to speaking with you.

Gifts of Cash

An outright gift of cash is the simplest way to support SCA. Cumulative outright gifts of cash to charities are deductible up to 50% of your adjusted gross income, with a five-year carry-over for any excess.

Cash can also be used to fund a life income arrangement such as a charitable gift annuity or charitable remainder trust. This can enhance your income for life. If you don’t need income immediately, you can structure a gift to provide future retirement income. Either way, such a gift can provide significant income tax savings.

Real Estate

You can donate appreciated residential or commercial real estate outright to SCA. This will provide you with an immediate income tax deduction for the full fair market value, as long as you have owned your real estate more than one year. (This assumes that no depreciation would be recaptured as ordinary income on a sale.) You will need to substantiate this deduction with a qualified appraisal. You will also completely avoid immediate capital gains tax. Cumulative gifts of appreciated assets such as securities and real estate to charity are deductible up to 30% of your adjusted gross income, with a five year carry-over for any excess.

You can also enhance your income for life by donating unencumbered residential or commercial real estate to a charitable remainder trust. The trust can sell your property without immediate capital gains tax and reinvest the proceeds to provide you with lifetime income. You will also get an immediate income tax deduction for part of the value. You cannot continue to use a property after it is donated to a charitable remainder trust.

If you wish to donate a property to SCA but want to continue to use it for the rest of your life, you can donate a personal residence, vacation home or farm to SCA now, but reserve the right to live there for the remainder of your life. By deeding the property to SCA now and retaining lifetime use, you will get a significant income tax deduction for a portion of the value of the property. You will be responsible for continuing to pay carrying costs (e.g., taxes, insurance and maintenance) during your lifetime.

Collectibles - Art, Antiques, Jewelry, Stamps, Coins

If you donate an appreciated collectible or collection that SCA will sell to obtain funds for its conservation initiatives, your deduction will be limited to your cost basis. This gift, along with your cash gifts to charity, will be deductible up to 50% of your adjusted gross income, with a five year carry-over for any excess.

You can enhance your income for life by donating a valuable collectible to a charitable remainder trust. (Suggested minimum $100,000) The trust can sell the collectible without paying immediate capital gains tax and pay you income from the full sales proceeds. This tax saving is substantial, since the capital gains tax on collectibles is still 28%! You will also get an income tax deduction for a portion of the cost basis when the trust sells the collectible.

You may also want to leave a valuable collectible to SCA by bequest. The full value would be deductible for estate tax purposes.

Life Insurance

You can donate a life insurance policy you no longer need to SCA. For a cash value policy, this would entitle you to an immediate income tax deduction for the lesser of the cost basis or the fair market value. For a term policy your deduction would be for the unused portion of the premiums paid. If your policy is not fully paid you may make tax-deductible contributions to SCA to cover future premium payments.

If you don’t want to make an irrevocable gift of the policy itself, you can simply name SCA a beneficiary of any individual or group term life insurance policy. Proceeds received by SCA would be completely deductible for estate tax purposes. You can name SCA a contingent beneficiary in case a loved one designated as beneficiary does not survive you.

You can also use your life insurance policy to provide for loved ones who survive you and for SCA. You can name a charitable remainder trust the beneficiary of your life insurance policy. Trust distributions can then be made to one or more designated beneficiaries (e.g., a spouse, close friend, sibling, child or grandchild) for life or a term of years, after which SCA would receive the principal. You could name SCA the beneficiary of the policy, establishing a charitable gift annuity that will pay lifetime income to one or two loved ones. Either way, the entire insurance proceeds would be deductible for estate tax purposes if your spouse were the sole beneficiary and part of the proceeds would be deductible if others are named as beneficiaries.

IRAs and Qualified Retirement Plans

You can name SCA the beneficiary of all or part of the amounts remaining in your traditional IRA, Roth IRA or other “account type” qualified retirement plans (e.g., 401(k), profit-sharing and money purchase plans) after your lifetime.

Traditional IRAs and qualified retirement plans are often considered assets of choice to leave to charities, since they are subject to two taxes when left to heirs other than your spouse. They are not only subject to estate tax, but are also subject to income tax as assets are withdrawn by your heirs. Both taxes are completely avoided when these assets are left to SCA, ensuring that every penny of your hard-earned funds will be used for conservation work.

You can also use your traditional IRA or qualified retirement plans to provide for loved ones by naming a charitable remainder trust as the beneficiary. The trust would make payments to one or more surviving loved ones (e.g. your spouse, a sibling, a friend or a child or grandchild) for life or a term of years, after which the principal would come to SCA. You could name SCA the beneficiary of the retirement plan, establishing a charitable gift annuity that will pay lifetime income to one or two loved ones. Either way, the entire value would be deductible if your spouse were the sole beneficiary, and part of the value would be deductible if others are named as beneficiaries.

If a loved one is named as the direct beneficiary of a retirement plan, you may want to name SCA as the contingent beneficiary, in the event that your loved one does not survive you.

Charitable Gift Annuities

SCA offers two types of charitable gift annuities. An immediate payment gift annuity pays you a set dollar amount each year beginning immediately and continuing for the rest of your life. If you don’t need income right away, you can defer your income with a deferred gift annuity. Either way, you will get a high and secure rate of return along with substantial tax benefits. A charitable gift annuity is simple to establish.

Immediate Payment Gift Annuity

You can establish your gift annuity with a gift of cash, stock or mutual funds (minimum $5,000). Your annuity rate will depend on your age (at nearest birthday) when you make your gift. Sample single-life rates for charitable gift annuities are as follows. (Two-life annuities are also available at somewhat lower rates.)

Age 65 – 5.3% Age 70 – 5.7% Age 75 – 6.3% Age 80 – 7.1% Age 85 – 8.1% Age 90 – 9.5% You will also get an income tax deduction when you make your gift. The spending power of your annuity will be increased by favorable tax treatment. Part of the income may be completely tax-free.

Example: Make a cash gift of $10,000 at age 80 and get $710/year (7.1%) for life. Approximately $520 of the $710 will be completely tax-free for the first 9.4 years. You will also get an immediate income tax deduction for approximately $5,100.

Deferred Gift Annuity

A deferred gift annuity enables you to defer your annuity payments until a stated future date. Your annuity rate will depend on your date of birth and the exact period of time (years and days) from the date of your gift to the date payments begin. The longer you defer your payments, the higher your return. You can donate cash, stock or mutual funds (minimum $5,000) to establish your gift.

Example: Donate $25,000 of appreciated stock at age 50 with payments beginning at age 65. You will get an annuity rate of approximately 9.8% of the full value of the securities you donate ($2,450/year), no matter how low your cost basis! You will also get an immediate income tax deduction of approximately $9,275. This can be used to shelter high income, a bonus or reportable income from the exercise of nonqualified stock options. If you defer payments until age 68, your annuity rate will jump to 11.6%!

Charitable Remainder Trusts

A charitable remainder trust is a tax-exempt trust that makes payments to you and/or others for life or a term of years. (Suggested minimum - $100,000) Principal is then distributed to SCA or is divided between SCA and other charities. Tax benefits include: • Avoidance of immediate capital gains tax on the sale by the trust of appreciated assets that you donate, so that full sales proceeds can be reinvested for your benefit. This makes a charitable remainder trust ideal for gifts of appreciated securities, real estate or collectibles. • An income tax deduction for part of the value of your gift.

Charitable Remainder Annuity Trust

This pays you a set dollar amount each year, equal to your chosen percentage of the original trust value. (Establish a 5% trust with $100,000, and get $5,000 every year.) This provides the security of a fixed return. This type of trust is generally funded with cash or marketable securities (stock or mutual funds). You cannot add to a charitable remainder annuity trust after it is created.

Standard Charitable Remainder Unitrust

A Unitrust pays you your chosen percentage of the changing value of the trust each year. If your trust grows over time, so too will your income. This can provide a valuable hedge against inflation. This type of unitrust is generally funded with cash or with marketable securities. You can add to a unitrust at any time.

FLIP Unitrust

A special type of unitrust, it can accommodate gifts of difficult to market assets such as real estate, closely held stock or collectibles. This type of trust can also be used to enhance future retirement income, if you don’t need income immediately. In either case, your income may be limited in the beginning, but your trust will FLIP to a standard unitrust (see above) at a specified time (generally on January 1 after the sale of a difficult-to-market asset or at the age you want retirement income).

Planning Opportunities

A charitable remainder trust can be tailored to your personal situation. It can be used to enhance your income immediately or enhance your future retirement income. The wide range of assets that can be used to fund a charitable remainder trust provides the following planning opportunities.

• Publicly traded stock: Diversify a stock portfolio tax-free. (This is extremely valuable for executives whose portfolios are overloaded with one stock.)
• Closely held stock: Sell all or part of a business without paying immediate capital gains tax. (Note: The charitable remainder trust is prohibited from selling the stock to certain family members.)
• Real estate: Sell a personal residence, vacation home, residential or commercial property tax-free.
• Collectibles (art, antiques, jewelry, stamps, coins): Convert an asset you no longer use, enjoy owning, or have room for, into an income stream tax-free.

Bequests

Bequests are extremely important to SCA. By leaving a legacy to SCA in your will or living trust, you will help SCA foster a conservation ethic in future generations of volunteers and protect valued national parks, forests and urban areas.

Because of extensive changes in the estate tax phasing in through 2011 under the 2001 Tax Act, this is an extremely important time to review your estate plans. Reductions in the estate tax over time may mean that considerably more will be available to leave to charities and loved ones after your lifetime.

You can designate a specified amount of money to SCA or you can leave a percentage of your entire estate or a percentage of the estate remaining after specific bequests are made to loved ones. You can also leave a specific asset to SCA. Your bequest to SCA would pass completely free of estate tax.

You can also name SCA a contingent beneficiary of a bequest designated for a loved one, in case that individual does not survive you.

Providing for Loved Ones and SCA

There are three ways to provide for both SCA and for one or more loved ones (e.g., your spouse, a sibling, a friend, a child or a grandchild). You can provide a loved one with:

• Income for life or a term of years
• Use of your residence, vacation home or farm
• A future gift or inheritance at reduced gift or estate tax The following describes how these goals can be accomplished. These gifts generally provide significant reductions in gift tax, estate tax and generation-skipping transfer tax (if grandchildren are involved).

Provide Income to Loved Ones: You can provide income to loved ones now or after your lifetime by structuring a charitable remainder trust or charitable gift annuity in the following ways:

• Establish a gift now that will make payments to you for life and then to a loved one if he/she survives you
• Establish a gift now to make payments to your loved one immediately
• Establish a gift through your will or living trust to make payments to one or more surviving loved ones after your lifetime

Provide Use of Your Personal Residence, A Vacation Home or Farm

You can donate your residence or farm to SCA now, reserving the right for yourself and a loved one to live there for life or a term of years. This will entitle you to an immediate income tax deduction for part of the value. You can leave your home or farm to SCA through your will, reserving the right of one or more loved ones to use it for life or a term of years. The individual(s) for whom use is reserved would be responsible for paying property taxes, insurance and maintenance costs.

Provide a Future Gift or Inheritance at Reduced Gift or Estate Tax

A charitable lead trust would make payments to one or more charities for a designated period of time. Then principal would be distributed to your heirs (generally children or grandchildren). The term of the trust during which payments are made to charity can be either a specific number of years, your lifetime, or the life or lives of certain other designated individuals. You can establish a charitable lead trust now or do it through your will or living trust. Either way, by waiting until the end of the trust term to receive the assets, your heirs will receive them at significantly reduced gift or estate tax. A charitable lead trust can be particularly useful if you have a large estate and want to see a period of time pass before your heirs receive the gift or that portion of their inheritance.

Legal Designation for SCA

The Student Conservation Association, Inc., a charitable organization with its principal office located at 689 River Road, Charlestown, New Hampshire 03603.

SCA’s federal tax identification number is 91-0880684.

SCA's Legacy Society

You are eligible for membership in the Legacy Society if you have provided for SCA in your will or living trust, named SCA a beneficiary of a life insurance policy or retirement plan, or established a life income arrangement (charitable gift annuity or charitable remainder trust) for SCA.

If you have established a legacy gift for SCA, please let us know so that we can welcome you into the Legacy Society. This will give us an opportunity to thank you appropriately for such a meaningful commitment and, unless you indicate that you would prefer to remain anonymous, to recognize your intention in our Annual Report.

Please complete the SCA Legacy Society form to notify us of a legacy commitment you have made.

If you have any questions, please contact: