Ways Donors May Give

One of the most appealing vehicles with multiple advantages for donors who desire to give is provided through the Wamego Community Foundation. One of the Wamego Foundation’s most attractive characteristics is its flexibility and its knowledge of and ability to adapt to changing community needs. To this end, the Wamego Foundation and the Manhattan Foundation each offer prospective donors a variety of tax-efficient ways to make gifts and achieve their charitable goals. 

Cash

Gifts in the form of cash are the easiest and probably most convenient asset to use in making contributions to the Wamego Foundation and are also easiest to qualify for the maximum allowable income tax deduction under current federal and state tax law since cash can generally be indisputably quantified. 

Marketable or Closely-Held Securities

Appreciated stocks and bonds may be given to the Wamego Foundation which has the significant benefit of permitting the donor to deduct the current market value of these securities as a charitable contribution and, of equal importance, permits the donor to avoid capital gains tax on the appreciated value of the gifted securities.  The advantages in donating securities that have appreciated in value are further enhanced by the fact that more monies or greater value is made available for charitable gift donations because the entire amount of the appreciation in value of the gift is exempt from taxation and is available to be added to the total amount of the gift.  The Manhattan Foundation and Wamego Foundation and their staffs are also available to assist with the transfer and registration of securities transferred as gifts by simply contacting their offices. 

Real Estate

Real estate is another form of asset that can be given and transferred to the Wamego Foundation at its current market value without taxable consequences to donors.  To the contrary, current tax law permits real estate gift donors to receive a full charitable tax deduction for the current value of the real estate asset and, further, to avoid capital gains taxes on the amount representing the appreciation in value of the real estate asset over time.   As a result the total amount of the gift is increased by an amount equal to the appreciation in value of the real estate since the gifting transaction is exempt from current federal income taxation.

Life Insurance

Life insurance can and is often used as one vehicle to create a major gift to community foundations, such as the Wamego Foundation, and can be structured as a donation in one of two ways. The first gifting method is for the donor to transfer ownership of the donor’s policy to the Wamego Foundation and receive a current income tax deduction equal to the cash value of the policy in the year the transfer is made. The second method is for the donor to continue to retain ownership of the life insurance policy and to simply name and designate the Wamego Foundation as the beneficiary of the policy with the policy amount being payable to the Foundation upon demise of the donor as the owner of the policy. Upon the occurrence of the donor’s passing, the donor’s estate will be entitled to receive a charitable contribution tax deduction if a filing exemption is not available and the estate is required to prepare and file a federal estate tax return. 

Retirement Plans

Donors are also permitted under current federal tax law to donate amounts held in an IRA account or other retirement asset account, such as those held by or for a 401(k), Keogh or 403(b) plan account by using such assets to establish a new fund with the Wamego Foundation or by contributing such assets to a fund previously established by a donor with the Foundation. 

Testamentary Bequests

Testamentary bequests of endowed gifts made to the Wamego Foundation both reflect and permit a donor's charitable intentions and objectives to be continued and observed in perpetuity and, as described above, can also significantly reduce both income and estate tax liabilities which may be otherwise payable by the donor’s estate.  Testamentary bequests of gifts to an existing fund or to establish a new fund as directed by a deceased donor can provide assurance for a lasting legacy for the charitable causes the donor favored and cared about during the donor’s lifetime. 

Transfers from an Existing Private Foundation

Administering a private foundation under current law and in compliance with both current federal and state tax laws and rules, including the preparation and filing of lengthy and cumbersome reports can, and has proven to be, both burdensome and expensive. Transferring the assets of a private foundation to the Wamego Community Foundation provides a cost-effective and time saving alternative to having to administer these private foundations and their funds, especially with respect to endowed funds intended to be in existence and operating for an extended period of time and even in perpetuity. 

Retained Income for Personal Use from a Charitable Gift

There are numerous ways for donors to plan and structure charitable gifts and establish funds with the Wamego Foundation while still being able and legally entitled to receive the income for life (or for a specified time) which is earned and produced by the donated assets . Through these mechanisms, donors can retain income for themselves and their spouses while also receiving certain deductions on current income tax liabilities and with respect to certain estate and gift taxes. The following are three examples of these gifting structures that have donor income retention features.  

Charitable Gift Annuities:  The Manhattan Foundation and the Wamego Foundation are able to offer competitive annuity yields for those donors who choose to make current gifts while retaining a lifetime income in the form of annuity payments produced by such donated gifts. A portion of these gifts may also be tax-deductible to and by the donor.  One of the most important features of the annuity gifting structure is the fact that the income payable by the annuity to the donor is guaranteed.  

Charitable Remainder Trusts: This is a form of structure for certain deferred gifts that can be created so that either the donor or another designated beneficiary (such as a donor’s spouse) is able to receive a lifetime income.  At the death of the income beneficiary, whether it is the donor or another designated beneficiary, the remainder of the trust assets pass and are transferred to the Wamego Foundation and are then used to accomplish the charitable purposes as specified by the donor in the donor’s gifting and trust instruments. These trusts provide a current income tax deduction if they are and remain irrevocable. If the trust is created as a revocable trust, an estate tax deduction is available for the donor’s estate upon the donor's death if the estate value is such that an estate tax return is required to be prepared and filed. 

Charitable Lead Trusts: This type of structured giving provides income to a fund created and established with the Wamego Foundation for such charitable purposes and for such period of time as the donor specifies in the trust document. Upon expiration of the number of years so specified, the remaining principal of the trust and any accumulated appreciation and income then available as part of the Trust assets is distributed to children, grandchildren, or other named beneficiaries as designated by the trust donor, often with significant savings in estate taxes depending on the then current value of the estate.