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Types of Gifts - UMD CLA


Types of Gifts

The College of Liberal Arts accepts gifts in a variety of forms so that prospective donors may choose the types of gifts that they perceive to be the most efficient, personally satisfying, and financially advantageous for both themselves and the College. The types of gifts available can be categorized as current gifts and deferred gifts.


Current GiftsCurrent gifts are contributions that can be put to use by the College immediately upon their receipt from the donor.

Cash Gifts - A gift of cash is an easy way of giving to the College. Cash gifts can be designated to the College of Liberal Arts, to a particular department or program within the College, or to a specific CLA fund.

Gifts of Securities - Gifts of common stocks, bonds, mutual funds, or other appreciated securities may be made to the College of Liberal Arts. A popular benefit of such a gift beyond the charitable income tax deduction is that, in most cases, capital gains tax on the appreciation of the securities can be avoided. Information for stock transfers is available from the Collegeís Director of Development, Adam Meyer, at (218) 726-6708.

Gifts of Property - Gifts of real estate and many other properties of value may be given to the College as well. These gifts can often receive the same tax treatment as gifts of securities: no capital gains tax plus tax deductibility at fair market value.

Matching Gifts - Many companies match any current gift of cash, stocks or bonds made to higher education by their employees and often employeesí spouses and retirees. The companyís matching gift form must accompany your gift. Donors are entitled to income-tax deductions for their individual gifts only, but the University recognizes the donor with the total amount of both personal and matching gifts.

Gifts in Kind - Donors may transfer assets such as works of art, rare books, stamps or coin collections as gift commitments. If the gift is used by the College for a University-related purpose, the donor is entitled to an income-tax deduction for the current gift value. If the University sells the gift or uses it for an unrelated purpose, any deduction is limited to the cost basis. Likewise, if the donor created the gift assets, the income-tax deduction is limited to the cost of producing the assets.

Current gifts can be made to the College of Liberal Arts, to a particular department within the College, or to a specific fund within the College. For information on designating the use of a current gift, visit the make a gift to CLA section of this site. Or simply contact our Director of Development, Adam Meyer, by phone at (218) 726-6708 or via e-mail at ameyer@d.umn.edu.

Deferred GiftsDeferred gifts are contributions that cannot be used by the College of Liberal Arts until some future date. Deferred gifts are the result of careful planning that integrates the donor's charitable gift into his or her overall financial, tax, and estate planning objectives in order to maximize the benefits for both the donor and the College. Each of the deferred gifts described below is closely regulated by law and requires special arrangements and tax treatment.

Bequests - A bequest is made when a donor provides in a will or living trust for the transfer of a specific amount, a specific asset or a portion of the remainder of an estate. Assets may be cash, stocks, bonds, mutual fund shares, real estate or personal property. Bequests benefitting CLA avoid estate taxes.

Retirement Assets - Gifts from a retirement plan or IRA are made by naming the College of Liberal Arts as a beneficiary after a donorís and/or spouseís lifetime. Retirement assets can also be transferred to a charitable remainder trust to benefit the College (see below). Gifts of retirement funds avoid estate and income taxes that would otherwise be paid if assets were distributed directly to family.

Charitable Remainder Trust - To establish one of several types of trust commitments, a donor transfers cash, securities or real estate to the College as trustee. A fixed or variable income is paid to the donor and/or other beneficiary for life or for a specified term of years. Donors are entitled to income-tax deductions based upon the value of gifts and trust terms. Gifts avoid capital gains and estate taxes. Commitments of this type appeal to donors who wish to contribute to the College and continue to receive income from investment of the gift assets.

Charitable Gift Annuity - A donor may create a gift annuity by transferring assets such as cash, stocks, bonds and mutual fund shares to the College in exchange for a fixed, lifetime income. Payments can begin immediately or at a specified future date. Income received by the donor may be partially tax-free. Donors are entitled to income tax deductions based upon the value or gifts and payment terms, and they avoid estate taxes. This gift type is appealing to older donors seeking a guaranteed, fixed lifetime income.

Deferred Gift Annuity - As with the Charitable Gift Annuity, a donor makes a gift now and receives an immediate income tax deduction. However, in this instance the donor begins receiving the annuity payments at a future pre-determined date. Due to the compounding of the gift's income, the amount of the annuity payments can be significantly greater than the annuity payments under the Charitable Gift Annuity.

Pooled Income Funds - Gifts or cash or securities to a CLA pooled income fund generate variable lifetime income to the donor or others whom the donor selects. Each year, donors receive a proportionate share of the pooled income fundís investment income. Donors are entitled to income tax deductions based upon the value of gifts and life expectancies. Gifts avoid capital gains and estate taxes.

Remainder Interest in Real Estate - A donorís residence, vacation home, timberland or farm may be transferred to the College while reserving use of the property for the donorís or anotherís lifetime. An income-tax deduction is earned based upon the value of the property and the donorís life expectancy. Capital gains and estate taxes are avoided. Remainder interest gifts generate current income-tax savings while allowing donors to continue lifetime use of their real estate.

Bargain Sale - A donor may enter into a written agreement for the sale of stocks, bonds, real estate or tangible personal property to the College below market value, making a gift of the difference between the current value and the sale price. The donor receives a lump sum or installment payment of the sale price. There is a tax deduction for the gift portion of the transaction. The donor may be taxed on the capital gain attributed to the sale portion; capital gains taxes are avoided on the gift portion.

Life Insurance - To make a life insurance gift, a donor names the College as owner and beneficiary of a new or existing life insurance policy. Donors are entitled to income tax deductions for new policy premiums or the cash value of an existing policy.

Deferred gifts can be made to the College of Liberal Arts, to a particular department within the College, or to a specific fund within the College. For information on designating the use of a deferred gift, visit the make a gift to CLA section of this site. Or simply contact our Director of Development, Jennifer Meyer, by phone at (218) 726-6708 or via e-mail at meyerj@d.umn.edu.
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