Charitable Giving That Makes a Difference in the World

Charitable Giving That Makes A Difference in the World

Ryan Gonda, Trust Officer, DTC  

Every act of giving has the power to transform lives, teach generosity and inspire gratitude. For more than 50 years, Deseret Trust Company has administered charitable gifts that help donors give in smart and efficient ways to accomplish their philanthropic goals. Deseret Trust works in partnership with Philanthropies to assist individuals, families, and their advisors with gifts that help accelerate the work of The Church of Jesus Christ of Latter-day Saints, its affiliated entities, and other charitable organizations. Deseret Trust is a corporate fiduciary, offering professional gift administration of charitable remainder trusts, charitable gift annuities, and donor advised funds.

Donor-Advised Fund – A Charitable Giving Account

A Deseret Trust donor advised fund (DAF) is like a charitable giving account that allows individuals and families to conveniently manage their charitable giving from a single fund to support the Church and its institutions and give up to 60 percent to other charities. The donor completes an application and makes a minimum initial contribution of $5,000 of cash, securities, or business interests. Contributions receive an immediate charitable income tax deduction. Additional contributions may be made anytime. The donor and other advisors to the fund use an online dashboard to make recommendations as to the investment option for the fund and what charitable causes they wish to support. Some donors make regular contributions and distribution recommendations, while others fund their DAF with a single, large contribution and recommend distributions over time.

Donors can use a DAF to:

• Pay tithing or fast offerings to the Church
• Support the Church’s missionary work
• Contribute to the Church’s General Fund and Humanitarian Aid Fund
• Provide scholarship and other support to Brigham Young University, BYU-Idaho, BYU-Hawaii, BYU-Pathway Worldwide, and Ensign College
• Support other IRS-approved 501(c)(3) charitable organizations whose purpose and mission are compatible with the religious, educational, or charitable purposes, teachings, or practices of the Church

Deseret Trust Company online DAF application: www.deserettrust.com/daf-setup

Charitable Remainder Unitrust – A Gift That Gives Back

Often referred to as a gift that gives back, a charitable remainder unitrust (CRUT) is established with a transfer of cash, securities, real property, or other assets into the trust. The donor receives an immediate charitable income tax deduction. The assets are sold by the trustee (tax free) and reinvested to match desired income objectives. Beneficiaries receive variable income payments based on a percentage of the trust’s value for a term of years or life, paid annually, quarterly, or monthly. (For planning purposes, assume that trust income will be taxed as ordinary income.) If the present value of the charitable remainder interest equals at least 10% of the value of the assets transferred into the trust, the trust qualifies as a CRUT. When the trust terminates, the remaining assets are transferred to the Church or one of its institutions.

CRUTs offer the following flexible features and benefits:

• Income for life or a term of years (variable payments)
• Typical donor is between ages 55 and 80
• Immediate charitable income tax deduction
• Flexible investment options
• Ability to:
  • Select the type of unitrust (standard, net income, net income with makeup, flip)
  • Choose the trustee
  • Designate the income beneficiaries and charitable remainder beneficiaries
  • Decide on a payout rate (between 5 and 50 percent)
  • Determine the frequency of the payments
  • Make additional gifts

Deseret Trust serves as initial or successor trustee for CRUTs that have named the Church as a remainder beneficiary.

Charitable Gift Annuity – A Tax-Efficient Secured Income Stream for Life

A charitable gift annuity (CGA) is a simple way to make a gift that provides a secured income stream to one or two individuals for life. A gift of cash or securities (minimum of $25,000) is transferred to Deseret Trust in exchange for a contract to pay income annually, quarterly, or monthly. The donor qualifies for an immediate charitable tax deduction when the CGA is established. Part of the income may be received tax free. Any capital gains tax due on the contributed asset is paid over the annuitant’s lifetime. Payments may begin immediately or can be deferred to increase the payment amount. The gift portion is approximately 50 percent of the amount transferred in exchange for the annuity.

The typical CGA donor:

• Needs guaranteed income for life
• Desires to make a “present gift” for estate planning purposes
• Is between the ages of 60 and 95
• Often establishes multiple gift annuities over time

A newer CGA option is available for individuals age 70 ½ or older to make a one-time qualified charitable distribution (QCD) of up to $53,000 from an IRA in exchange for a gift annuity. (This amount is indexed to inflation.) The distribution counts towards required minimum distribution (RMD) requirements. This opportunity is limited to one tax year during an individual’s lifetime.

Deseret Trust issues CGAs on behalf of the Church and its affiliated entities based on the rates established by the American Council on Gift Annuities, a national organization that suggests rates for nonprofit organizations to offer to annuitants. Deseret Trust does not offer CGAs in every state because of differing regulatory requirements.

About Deseret Trust Company

Deseret Trust Company is an integrated auxiliary of The Church of Jesus Christ of Latter-day Saints and is regulated by the Utah State Department of Financial Institutions. The First Presidency of the Church appoints the chairman and board of trustees. Donors can have confidence that the company operates according to the same principles common to Church operations.

For more information on Deseret Trust Company and its services, please visit www.deserettrust.com or call 800-746-8250.