Jaya Lalita's Refundable Endowment model - Leading Trust

[Guest guest]

Mark Middle Mountain wrote:

 

 

>> Jaya Lalita prabhu, a Prabhupada disciple who is also a trained

>> economist,

>

>> suggested a simple funding model for Gita-nagari Farm several years

>> ago. Under

>

>> her model, patrons would be invited to make a ten-year interest-free

>> loan to

>> the

>> farm. The funds would be deposited and, as in other endowments, the

>> interest

>> generated would be used to pay off the land costs of Gita-nagari.

>

>

> I am not sure, but that may be called a Lead Trust. Been too busy to

> write - one Farmer's Market we sell at has started and the second

> starts in 2 weeks.

>

> Someone really interested in the topic could check the following site

> for an idea of how to approach large donors.

>

> http://phillips.exeter.edu/giving

>

> Keep clicking thru until you find a pade where Lead Trusts and a lot

> of other options are detailed.

 

Madhava Gosh prabhu,

 

That list looks useful. I have formatted the information on Exeter's

website and pasted it below. Perhaps Bhakta Mark or Syamasundar could

provide links to British educational institutions which provide their

counterpart of this kind of giving information.

 

In passing, I note that Exeter's website is very clearly organized -- so

that a wealthy donor could get the feeling, "This is something I can do

today, not that I have to set up an appointment with my lawyer a month

from now. I can work most of this out with the information I'm given

here, and then I can fax a copy for my lawyer to review in ten minutes.

I don't have to commit a lot of time to this." The simultaneous

qualities of sophistication and extreme simplicity make it a very

attractive venue for making a donation.

 

Madhava Gosh prabhu, just curious: How did you happen to think of

Phillips Exeter Academy?

 

Anyway, below is their info. Chaya prabhu is also pretty knowledgeable

on topics like this and may have additional comments or references for

us.

 

your servant,

 

Hare Krsna dasi

 

**********************

 

WAYS OF GIVING TO EXETER

 

There are many ways to contribute to Phillips Exeter Academy, and one or

more of them can benefit your personal financial planning. We invite you

to read on for more information, and to consider the various advantages

of making a gift to Exeter.

 

This page includes descriptions of the following gift options:

 

* Outright Gifts of Cash

 

* Outright Gifts of Appreciated Securities

 

* Independent Retirement Accounts (IRAs)

 

* IPOs, Options, and Restricted Stock

 

* Ways to Receive Income from a Gift to Exeter:

 

- Charitable Gift Annuity

- Pooled Income Funds

- Charitable Remainder Trust

 

* Charitable Lead Trusts

 

* Gifts of Real Estate

 

* Gifts of a Personal Residence or Farm with Life Tenancy

 

* Gifts of Personal Tangible Property

 

* Gifts-In-Kind

 

* Gifts of Life Insurance

 

* Bequests or Other Testamentary Gifts

 

* Gift Purposes and Credit

 

* The Heritage Circle

 

* Read about recent donors and planned gifts to the Academy.

 

 

OUTRIGHT GIFTS OF CASH:

 

Outright gifts of cash are the simplest form of support you can make to

PEA. When you make a gift of cash, you are entitled to an income tax

deduction of that amount, up to 50 percent of your adjusted gross

income, with a five-year carry-over period for the excess.

 

OUTRIGHT GIFTS OF APPRECIATED SECURITIES:

 

A gift of long-term, appreciated stock saves money in two ways: your

income taxes are reduced because of the charitable donation, and you

avoid the capital gains tax that would have applied had you sold the

shares yourself. Gifts of appreciated securities may also allow you to

make a larger gift to Exeter than you could with cash. If you have owned

the appreciated securities for more than 12 months, you can claim as an

income tax deduction up to 30 percent of your adjusted gross income in

the year of the gift. Unused deductions can be applied to as many as

five future tax years.

 

TRANSFER INSTRUCTIONS: :

 

For securities held in a brokerage account: Please contact Wayne

Loosigian, director of annual giving, at (603) 777-3473;

wloosigian (AT) exeter (DOT) edu, or Charlie Thomas, director of planned giving, at

(603) 777-3667; cthomas (AT) exeter (DOT) edu for transfer instructions. The amount

of your gift will be the securities' mean value on the date the written

instructions are delivered to your broker and to Exeter.

 

For securities in certificate form: Send or deliver an unendorsed stock

certificate with a transmittal letter stating your name, address, class

year, and the purpose of your gift (Annual Giving Fund, endowed fund,

etc.). Under separate cover, send a stock power executed in blank with a

copy of the transmittal letter. The amount of your gift will be the

securities' mean value on the postmark date.

 

Send both envelopes to:

 

Gift Recording

Office of Alumni/ae Affairs and Development

Phillips Exeter Academy

20 Main Street

Exeter, NH 03833-2460

 

INDEPENDENT RETIREMENT ACCOUNTS (IRAS):

 

Accumulations in qualified retirement plans such as 401(k)s, IRAs and

Keoghs can cause the value of many estates to rise above threshold

values established by Congress, thus incurring federal, and possibly

state, estate taxes. Careful planning can minimize the taxes due on

retirement plan assets. One option is to designate a percentage of

assets from the plan to Exeter. Because such a gift is for charitable

purposes, it is fully deductible from the estate, and can often result

in more assets being received by heirs.

 

NEW PHILANTHROPIC OPPORTUNITIES: IPOS, OPTIONS, AND RESTRICTED STOCK:

 

The a sale of a company, a merger or acquisition, an initial public

offering, or compensation benefits may create a new philanthropic

opportunity. Transfer of such assets may allow you to accomplish your

financial goals while also achieving your charitable objectives for

Exeter.

 

WAYS TO RECEIVE INCOME FROM A GIFT TO EXETER:

 

If you want to make a charitable gift to Exeter, but need to retain

income for yourself or a family member, consider a deferred, or "life

income," gift. Deferred gifts can allow you to achieve your

philanthropic goals for the Academy, while also providing income and

important tax savings.

 

CHARITABLE GIFT ANNUITY:

 

You can make a contribution to Exeter and receive a fixed annual income

from the gift for the rest of your life. The rate you receive is based

on your age and will increase as you get older. If you give appreciated

securities to create an annuity, the capital gain is prorated over your

life expectancy; part of the annuity payment is tax-free for the

duration of your life expectancy; and you receive an income tax

deduction, the amount of which varies, depending on the age of the

annuitant. Upon the death of the annuitant (you or your designee), the

remaining principal becomes available to the Academy.

 

POOLED INCOME FUNDS:

 

Exeter's two pooled income funds operate like mutual funds. Your gift is

commingled and invested with other pooled income fund gifts, generating

income payments each quarter to you or a chosen beneficiary. Payments

are based on the earnings of your proportionate interest in the fund.

Upon your death or the death of the first beneficiary, income payments

may pass to a second beneficiary, such as a spouse. When all income

beneficiaries have died, your shares in the fund become available to the

Academy.

 

If you contribute appreciated securities, there is no capital gains tax

on their transfer to (or subsequent sale by) the pooled income fund. You

are entitled to an income tax deduction for part of the gift, subject to

the same contribution ceilings mentioned earlier for outright gifts of

cash or securities. Most donors also experience an increase in annual

income as a result of the gift.

 

Exeter offers two pooled income funds, for donors with different

financial goals. The Lewis Perry Income Fund may appeal to donors who

need to maximize the return on their life income gift to Exeter. The

William G. Saltonstall Balanced Fund may appeal to donors who would like

to receive a more moderate income now, maximizing growth opportunities

in the fund over time.

 

CHARITABLE REMAINDER TRUST:

 

A charitable remainder trust can be established with cash, appreciated

securities, real estate, or other marketable assets. Managed by a

trustee (usually Phillips Exeter Academy), a charitable remainder trust

provides income until your death (or the death of a beneficiary), or for

a specified term of years. When the trust expires, the principal becomes

available to the Academy.

 

Donors may choose the trust's annual payout rate. A Unitrust pays income

according to a fixed percentage of the total trust value, as revalued

each year. As a unitrust's value increases, payments to the beneficiary

also increase. An Annuity Trust pays a fixed dollar amount each year,

rather than a percentage of the annual trust value. This dollar amount

is established when the annuity trust is created, and it does not change

from year to year.

 

A WAY TO REDUCE TAXES ON TRANSFERS TO HEIRS: CHARITABLE LEAD TRUSTS:

 

A charitable lead trust is the reverse of a charitable remainder trust.

Instead of generating income to the donor, a charitable lead trust pays

a fixed percentage of the trust assets to Phillips Exeter Academy for a

specified term of years. When the trust expires, the principal is

returned to the donor or a designated beneficiary.

 

With this vehicle, you are able to remove a significant asset from your

estate, thereby reducing the potential gift or estate tax. The longer

the period of years and the higher the payout rate, the greater the tax

savings. The assets placed in the trust are expected to appreciate over

time, but that appreciation is not subject to further gift or estate tax

when the trust terminates. This vehicle allows you to make a significant

gift to Exeter, while also preserving assets for your heirs.

 

GIFTS OF REAL ESTATE:

 

Most real estate has appreciated at a rate higher than inflation, making

it an ideal asset for many methods of charitable giving. A home,

undeveloped lot, commercial property, or other real estate can be

contributed outright, converted to a new source of income through a

deferred gift agreement, or transferred directly to the Academy with

arrangements for life tenancy. Depending on the giving method, you can

benefit from income tax savings, capital gains tax savings, or estate

and gift tax savings, while also possibly increasing your annual income.

 

As a general rule, properties which have indebtedness are not suitable

as gift assets. A comprehensive written appraisal by a qualified,

independent appraiser, arranged and paid for by the donor, is required

for all gifts of real estate for income tax deduction purposes.

 

GIFTS OF A PERSONAL RESIDENCE OR FARM WITH LIFE TENANCY:

 

It is possible to transfer ownership of a residence or farm to Exeter

while retaining use of the property during your lifetime, as well as

your spouse's lifetime. The property is not required to be your primary

residence; it can be a second or a seasonal home. Donors with life

tenancy remain responsible for insurance, maintenance, and taxes.

 

This is an excellent way to support the Academy, while also receiving a

current income tax deduction. The deduction is less than the full

appraised value of the property and is based largely on the life

expectancies of the donors, the estimated useful life of the property,

and the separate values of the land and buildings.

 

GIFTS OF PERSONAL TANGIBLE PROPERTY:

 

Gifts of personal tangible property, such as art or antiques, are

accepted by the Academy if they can be used in support of the mission of

the school. If you have owned the property for more than 12 months, you

may claim an income tax deduction for its fair market value, even though

the original cost may have been a fraction of its current value. A

qualified appraisal, arranged and paid for by the donor, is required for

income tax deduction purposes for gifts of $5,000 or more.

 

As with real estate, in certain cases a gift of personal tangible

property may be used to create a life income arrangement, such as a

charitable remainder unitrust. In such situations, the property is

donated to the Academy, and proceeds from the sale of the property are

used to create the planned gift.

 

GIFTS-IN-KIND:

 

The Academy accepts gifts-in-kind if they can be used in support of the

mission of the school. In most cases, these gifts take the form of

inventory given through businesses owned by alumni/ae. Gifts-in-kind are

also sometimes directed to Exeter by alumni/ae whose employers offer

corporate giving programs.

 

GIFTS OF LIFE INSURANCE:

 

You can name Phillips Exeter Academy the beneficiary (or co-beneficiary)

on an existing life insurance policy. In the event of your death, Exeter

receives the proceeds of the policy as a bequest, generating federal

estate tax benefits.

 

If you also make the Academy owner of the policy and relinquish all

incidents of ownership, you can claim an income tax deduction for the

cash surrender value. You can also purchase, through relatively modest

annual gifts, a new policy naming Exeter beneficiary and owner. Not only

will you be able to transform a small annual gift into a large one, you

can claim the amount of the annual premium as a charitable deduction for

income tax purposes.

 

BEQUESTS OR OTHER TESTAMENTARY GIFTS:

 

You can provide for Exeter in your will or in a trust. The full value of

a bequest is deductible for federal estate tax purposes, and there is no

limit to the size of a bequest. You may also establish a charitable

remainder trust or a charitable lead trust through your will, allowing

you reduced estate taxes while providing for your heirs and for Exeter.

 

You may incorporate a bequest or testamentary trust to the Academy when

your will is originally drafted, or add one later in a codicil. The

following wording is suggested for bequests of cash or property; for

other forms of testamentary gifts, you should seek advice from the

Academy (by calling Charlie Thomas, director of planned giving, at (603)

777-3667; cthomas (AT) exeter (DOT) edu), or from your financial advisor.

 

WORDING FOR BEQUESTS OF CASH OR PROPERTY:

 

I give to the Trustees of Phillips Exeter Academy the sum of $_________

(or, ___ percentage of my estate).

 

I give to Phillips Exeter Academy the following assets: (list

securities, real estate, objects of art, or other property).

 

WORDING TO ESTABLISH A FUND FOR A SPECIFIC PURPOSE:

 

I give to the Trustees of Phillips Exeter Academy (specify cash amount,

percentage, or asset) to establish the __________ Fund for the following

purpose: (state the purpose of your gift).

 

GIFT PURPOSES AND CREDIT:

 

You can use one or more of the gift arrangements described on this page

to establish a gift at the Academy in support of a program or activity

that has special meaning for you. Such gifts may include endowed

scholarship funds, distinguished teaching chairs, and gifts to support

campus building projects.

 

You may support Exeter's Annual Giving Fund through gifts of cash and

appreciated securities.

 

You may also credit your gift to a future class reunion.

 

THE HERITAGE CIRCLE:

 

The Heritage Circle recognizes the generosity of alumni/ae, parents, and

friends of the Academy who provide for Exeter through deferred gifts,

bequests, or trust instruments. Our staff welcomes the opportunity to

meet with you and your advisors to discuss your philanthropic goals and

how you can include Exeter in your estate and financial plans. All

discussions are confidential and are held without obligation.

 

FOR MORE INFORMATION, CALL OR WRITE:

 

Charlie Thomas, director of planned giving

Office of Alumni/ae Affairs and Development

Phillips Exeter Academy

20 Main Street

Exeter, New Hampshire 03833-2460

cthomas (AT) exeter (DOT) edu

[Guest guest]

>

>

> Madhava Gosh prabhu, just curious: How did you happen to think of

> Phillips Exeter Academy?

 

Class of '68, hence the recipient of regular and well organized

appeals, the most recent being the link to this website. Usually one

snail mail appeal a year, plus an Alumni Bulletin that comes

quarterly, with news of the Academy and about alumni, that contains

an understated reminder of giving opportunities. There are also

reunions every year, with a special emphasis on classes with 5th year

anniveraries (i.e. Class of "68 will have a 35th reunion in 2003). These

reunions are major opportunities for face to face appeals. There are

also regional events crossing class lines that are attended by Academy

representatives looking for that face to face meeting.

 

PEA is a successful, stable, long term institution that is very well

endowed. Srila Prabhupada said every center should have a college, so

taking Exeter as an example was no great leap.