Giving to UC
> Ways to Give
There are a number of ways for you to support the people and programs of the University of California, including the half-dozen opportunities described below.
Charitable Remainder Unitrust
This is a separate trust which pays the income beneficiary a percentage (at least 5 percent) of its net asset value each year. An income tax charitable deduction is allowed at the time it is established for the value of the remainder interest of the trust. The income payments to the beneficiary are variable, as the trust is re-valued annually.
A variation of this trust is the "net income" unitrust, which distributes the trust's net income, up to the set percentage of the annual market value of the trust assets. This protects the trust corpus from erosion due to high income payments.
These separately invested trusts may be established with a minimum gift of $100,000; additional contributions can be made to a unitrust at anytime.
Charitable Remainder Annuity Trust
This plan pays a fixed dollar amount (at least 5 percent of initial value of transferred property) to the donor or his/her designated beneficiary for life. A charitable contribution deduction is allowed for the value of trust's remainder interest. Like the unitrust, an annuity trust may be established with a minimum gift of $100,000. Annuity trusts cannot accept additional contributions.
Charitable Gift Annuity
This pays a fixed annuity for the life of the income beneficiary. The rate is based on the age of the income beneficiary on the date of gift, and part of each payment is usually tax-exempt. The amount of the charitable contribution deduction is basically the difference between the value of the gift (cash or the value of securities or real estate) and the value of the annuity received by the beneficiary. Gift annuities may be established with $10,000 or more.
Deferred Payment Gift Annuity
Like the gift annuity, this plan also pays a fixed amount, but the first payment is deferred for a year or more from the date of the gift and is usually timed to coincide with retirement or other plans. The donor is thus able to make a gift now and use the income tax charitable deduction when he or she is in a higher tax bracket, deferring annuity payments until those years when the beneficiary may need the income more. The amount of each payment that will be tax-free depends on the donor's life expectancy and the appreciation in the gift assets. The charitable contribution is the face value of the gift less the actuarial value of the deferred annuity. The minimum donation is $10,000.
Pooled Income Funds
These funds are made up of the donations of many donors, which are combined for investment purposes. There are two pooled income funds that are operated by The Regents of the University of California and are open to donors to any campus or university program. These funds pay the donor or his/her designated beneficiary a pro rata share of the particular pooled income fund earnings each year for life. Income is taxed as ordinary income, and a charitable deduction is allowed for the value of the actuarially determined remainder interest. Pooled income funds may be started with as little as $5,000 and additional contributions of $1,000 or more may be made at any time.
Life Income Options with Appreciated Securities
Donors to charitable remainder trusts and pooled income funds may make a gift using appreciated property without having to incur capital gains taxes. The trust can sell those assets and purchase other higher yielding assets, also without capital gains taxes. Capital gains on donations to gift annuities are usually distributed over the annuitant's life expectancy.
The gift vehicles listed here are part of a "family" of gifts sometimes called "life-income gifts" or "planned gifts." This terminology is used because these gifts required planning before a transaction is completed. We strongly encourage every potential donor to seek tax and legal counsel before making a planned gift to the University.
Calculations which illustrate some of the benefits of various life income arrangements and more detailed information about all of these life income plans are available on request.