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Planned Giving
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What is the secret to making a gift that will provide the greatest meaning to you and the American Red Cross of Santa Cruz County? Part of the answer lies in careful planning and good organization. The best plans are created by first, deciding what your goals are and second, determining how to accomplish your goals.
Gift plans create opportunities for both the American Red Cross and our donors. Determining what gift is right for you is just as important as making the gift. There are many options from which you can choose. The correct plan for you balances what you wish to accomplish for yourself, your family, and your charitable interests in your overall estate and financial plans.
If you would like to speak with someone concerning Planned Giving, please contact:
Kathleen S. Wright, JD
Gift Planning Manager, Northern California
Phone: 831.901.8762
Toll Free: 888.868.1992
Frequently Asked Questions
1. What assets can I use to make a gift to the American Red Cross?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property).
Through your will or with a distribution from a retirement plan or life insurance policy, your gift can be designated to the American Red Cross in accordance with your wishes.
2. What sort of gift plans also return income to me?
You have the option of making a gift that returns income to you, your spouse, or other individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.
3. What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the type of gift, the time at which it is made, whether it is outright or deferred or has any income payments. In general, though, here are some guidelines:
- Outright gifts to the Red Cross generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains -- a great tax benefit!
- Gifts of personal property, like art, books and collectibles are fully deductible so long as they are relevant to our mission. We can advise you on this point.
- Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax.
- Similarly, life insurance distributions to the Red Cross are not income-tax deductible, but are exempt from estate tax. If you have made us the irrevocable owner and beneficiary of a policy during your lifetime, you may deduct annual gifts that offset premium payments (for more details on this point, see Question 4 below).
- The charitable deduction for a gift that returns income to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.
4. I want to set up a life insurance policy, name the American Red Cross of Santa Cruz County as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
No. The IRS would not consider that a "completed gift" – they'd say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. We must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
5. I’ve heard that transferring gifts of IRA assets to charity are advantageous. Why?
Qualified retirement plans such as IRAs, 401(k), 403(b), and Keoghs allow individuals to defer paying taxes on a portion of their income until the assets are withdrawn during retirement years. However, after a person's death, these accounts are often exposed to income and estate taxes, at a combined rate that could rise to 75% or even higher on large taxable estates. The tax will be paid at some point—by your estate and your heirs unless contributed to charity. In other words, by giving retirement assets to charity you receive double benefits. Your estate and heirs will not be taxed on the portion that goes to charity and you will support the Red Cross!
6. Can I transfer my IRA to the American Red Cross to set up a life-income gift, and avoid income tax on the transfer?
New legislation gives donors aged 70½ and older an opportunity to direct lifetime distributions from their IRAs to us without incurring income tax liability on the withdrawal. The provision will be in effect for just the 2006 and 2007 tax years. Distributions can total $100,000 per year, and must be made outright — they cannot fund a life-income gift. Just give us a call (831-462-2881) and we'll be happy to give you more information about this new charitable incentive.
Donors younger than 70½ can make a withdrawal from their IRA or other type of retirement plan, pay income tax on the withdrawal, and donate the proceeds to us. These gifts can be made outright or can fund a life-income gift and will generate a charitable deduction for the donor.
7. I'd like to donate a painting. Will you determine its value for my income tax deduction?
The IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value. The appraisal has to be related to the gift, too – an insurance appraisal won't suffice. We can assist you on this point.
8. I'm interested in establishing a charitable gift annuity. What financial provisions will you make for the income payments to me and my spouse?
Your charitable gift annuity will be treated as a general obligation of the American Red Cross, backed by all of our assets. We have an unbroken record in making timely payments to our annuitants, and that ongoing responsibility is a key element in our financial policies.
9. If I create a bequest or life-income gift, will you continue to ask me for annual contributions?
Your planned gift is a significant addition to our long-term financial strength and our ability to meet the challenges and opportunities the future will bring. However, today's efforts are supported through annual gifts and we greatly appreciate and encourage any annual support you may want to consider.
Frequently Asked Questions (For Professional Advisors)
- What is the Federal tax identification number for the American Red Cross, Santa Cruz County Chapter?
The federal tax identification number is 94-2257274.
- Can the American Red Cross serve as Executor for an estate?
The American Red Cross National Headquarters and local Red Cross Chapters cannot serve as Executor for any estate due to potential liability and conflict of interest issues.
- What are the ways in which a donor can designate their gift to the American Red Cross of Santa Cruz County through their will?
A donor can bequeath a sum certain or a percentage of their estate for either specific or general purposes. The gift can be designated to the American National Red Cross and/or a local American Red Cross Chapter.
- Who can answer the bequest and legacy questions of an executor/trustee?
Please contact Kathleen Wright, Gift Planning Manager Northern CA Region at 831-901-8762.
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