How to Create a Fund at the San Angelo Area Foundation

Cash ($10,000 minimum donation needed to create a fund).


Securities: The charitable deduction is based on full market value for both closely-held and publicly-traded stocks. Capital gains taxes on appreciation are avoided.


Real Estate: If held for more than a year, it usually provides the same benefits as gifts of securities. The Foundation may hold the real estate or may sell, depending on the use and value of the property.

Bequests: Establish a fund through your will or trust


IRA’s: Name the Foundation as beneficiary of your IRA, 401(k), or other retirement plan. At your passing, the funds transfer to your Fund at the Foundation, without estate tax or income tax implications.


Charitable remainder trusts: The donor and/or other named beneficiaries retain a life income and earn immediate and long-term tax benefits. Upon termination, assets go to a charitable fund named and designed by the donor. Using assets remaining in IRAs to create charitable unitrusts can offer significant tax advantages to larger estates.


Charitable gift annuities: You can establish a gift annuity by transferring cash or appreciated properties, such as stock, as an irrevocable gift to the San Angelo Area Foundation. The Foundation deposits these funds in a professionally managed account. Upon your death, the amount remaining in your gift annuity can be distributed between the Discretionary Fund of the San Angelo Area Foundation and other charitable endowments established at the San Angelo Area Foundation. The Foundation distributes a guaranteed, fixed payment to you for as long as you live. The amount you receive each year is determined by your ages; the older a donor is, the higher payout he or she receives.


Charitable Lead Trusts: Like a charitable remainder trust, lead trusts benefit the donors and the charities of their choice. With a lead trust, donors establish an irrevocable fund which distributes cash to their favorite charities for a term of years (normally, 5-20 years). When the trust expires, the assets within the trust revert to the donors (or their selected beneficiaries). Donors especially like charitable lead trusts because they have the opportunity to observe how their gifts are being used (as opposed to the charity not receiving funds until the donors die). Donors can establish a donor-advised endowment fund at the San Angelo Area Foundation and advise the board of directors how to grant the earnings. In addition, donors who wish to leave their heirs an asset that is expected to appreciate significantly can use a charitable lead trust to achieve very favorable tax treatment. The asset’s original transfer tax is discounted because a charitable partner receives income from the fund for several years. (The longer the charity receives a distribution, and the higher payout percentage it receives, the higher discount the trust receives.) Furthermore, the assets within the trust can grow without additional transfer tax implications because the tax valuation is determined only at the time the property is placed in a trust.


Insurance: Name the San Angelo Area Foundation as owner and beneficiary of an insurance policy to be used to establish a future charitable fund. The donor earns an immediate tax deduction and any additional premium payments are deductible, as well.

Tax-advantages — Most people know tax laws provide considerable incentives for individual charitable giving. But the kind of deduction you get depends on the type of organization to which you contribute, the type of gift you make, and the timing in which you make the gift. Public charities, like community foundations, and other 501(c)3 organizations offer the maximum tax deduction available, including 50% of Adjusted Gross Income for cash contributions, fair market value for gifts of securities, and 30% for gifts of property. Foundations like the San Angelo Area Foundation enable donors to set up a charitable fund that supports specific causes they care about. Establishing a donor advised fund allows you to give when it’s convenient and receive a tax deduction at the time of the gift. You can recommend grants from your fund at any time. Donors can give their fund a name and purpose and can build a fund on an installment plan.


Gift of securities rather than cash — Donating appreciated securities is one way to make charitable contributions at the lowest after-tax cost. You generally get a deduction on the current market value of stock and avoid paying taxes on capital gains you would realize if you sold stock and donated the proceeds.


Gifts of tax-deferred assets — IRA’s, annuities or retirement plan accounts can benefit a nonprofit beneficiary while protecting your financial position. Special rules can apply for these types of gifts, which usually trigger a tax liability as if you had made a withdrawal. When you make a personal withdrawl and donate the amount to a charity, you get some amount of deduction for your gift, but it usually does not protect the entire amount. If, however, you name a nonprofit as a beneficiary of a tax-deferred account upon your death, you avoid the potential fordouble taxation” (income and estate taxes) on the portion you give.


Planned giving tools — Planned giving can help strengthen your charitable giving while benefiting your personal and business financial planning position. A Life Estate Agreement, Charitable Gift Annuities, Charitable Remainder Trust, and Charitable Lead Trust are all possibilities. With a charitable trust, you can receive estate and/or income tax deductions by donating either the income or the remainder interest to a nonprofit organization, while keeping the other part for yourself or your heirs.


Seek advice from a tax professional or financial advisor — Speak with your attorney or professional advisor about your charitable giving interests. With their help, you can structure your giving so it accomplishes the most for the community, your heirs, and yourself. As always, you should consult your tax advisor before you make any tax related investment decisions.


The Foundation is here to serve you — If you need assistance or have questions concerning your charitable intentions, please let us help you. We will gladly visit with you, your family, your attorneys, and other professional advisors to sift through the options and help you make sure your desires are carried out.