Giving Wisely

The University of South Carolina and its affiliated foundations rely on charitable gifts to meet our daily needs and to secure our future. We take seriously our responsibility to be good stewards of the money entrusted to us and apply those dollars wisely and with purpose.

Your gift can take multiple forms and can help you address your personal financial goals. Do you want to make a significant gift during your lifetime, or would a gift as part of your estate work better? Do you have a particular asset that you are thinking of donating? Do you want to increase your retirement income, or is your primary goal estate preservation? Are you carrying excess life insurance or a large balance in your retirement plan?

We will be pleased to work with you and your advisors to help you craft the gift plan that works best for your goals and dreams. Here are some places to start as you consider your options.

• Travel through the Legacy Planner to help you decide what plan will best meet your needs.
• Click here to see what options will meet your particular situation.
• Use the following guide to help you weigh your options.

1. Give now, or give later?

   A significant lifetime gift will allow the University of South Carolina or one of its affiliated foundations to meet our immediate objectives. In turn, it will give you maximum tax benefits, especially attractive if you are in high earnings years. It can also be the simplest gift to arrange.

   You may, however, prefer to leave your assets and cash flow undisturbed until your death and, instead, make your gift through your estate. Estate gifts are critically important for long-term financial strength of the University of South Carolina and its affiliated foundations and will ensure our ability to meet the opportunities and challenges of the future. Estate gifts are typically provided through a will or living trust, a retirement plan, or a life insurance policy.

2. What assets to give?

   Appreciated securities. Get the same tax deduction as if you had given cash, but use stocks or bonds that cost you less than they are currently worth. Your deduction is based on market value, but you incur no capital gains tax liability on the transfer to us. It's one of the best tax incentives left, and we can work with your broker to make a gift of securities simple.

   Real estate. Gifts of land, vacation homes, or income-producing properties can provide wonderful benefits to the University of South Carolina or one of its affiliated foundations. You can give real estate outright, transfer it in a part sale/part gift arrangement, use it to fund a life income gift, or give your residence and reserve the right to continue to live there.

   A retirement account. The balance remaining in your retirement account after your death is potentially subject to double taxation if it passes to your heirs: it's taxed both as income and as an estate asset. In some cases, over 80% of the account value may be owed in taxes. If you designate the remainder of your account to the University of South Carolina or one of its affiliated foundations, and then use other assets for gifts to your family, you will avoid both taxes on your plan assets.

   Tangible personal property. You may be holding tangible personal property--like books, artwork, or equipment--that you no longer wish to own. These assets could bring real benefit to the University of South Carolina or one of its affiliated foundations if we're able to put the assets to good use.

   Business interests. Interests in partnerships, closely held companies, S corporations, and similar business enterprises may hold value that can benefit the University of South Carolina or one of its affiliated foundations. We'll review the proposed gift and, if we agree, work with you and your advisors to make the transfer simple.

3. How can a gift pay me back?

   Some gifts allow you to benefit the University of South Carolina or one of its affiliated foundations later but receive a steady income stream now. You can receive fixed or variable income, take payments for your lifetime or for a term of years, and even direct income to other beneficiaries. In essence, you make a contribution yet retain benefits from what you gave away. Such gifts include charitable remainder trusts and charitable gift annuities.

   Your charitable deduction is based on the full market value of the assets you gave, minus the present value of the income interest you retained. The higher the income payout, the lower the deduction.

   These flexible gifts can address a variety of your financial, family, and philanthropic planning objectives, and they help solidify the long-term financial strength of the University of South Carolina or one of its affiliated foundations.

4. What are my choices in life income gifts?

   A charitable gift annuity is the simplest; in return for your gift, you and/or another beneficiary receive a fixed annuity for life. The annuity rates and the charitable deduction tend to be higher with a gift annuity than with other life income gifts. Depending on how they are funded, gift annuities may also offer an attractive reduction in income tax. This gift plan is most appropriate if you are risk-averse in your investing and if long-term fixed income is an attractive strategy for you.

   A deferred charitable gift annuity postpones for at least a year the annuity payments to the income beneficiaries. In return for this delay, income beneficiaries receive larger annuity payments, and the donor receives a larger charitable deduction. If you are currently in high earnings years, looking for tax deductions and new sources of retirement income, a deferred charitable gift annuity with income set to start when you turn 65 or older may fit your needs well.

   A charitable remainder annuity trust is another option if you are seeking fixed income. Annuity trusts provide more planning flexibility than charitable gift annuities. A charitable remainder annuity trust can pay income to multiple beneficiaries, while the charitable gift annuity is limited to two individuals. Under certain circumstances a charitable remainder annuity trust can pay some or all tax-free income. A charitable remainder annuity trust is individually managed, providing you with a bit more flexibility, but your payments will be backed only by the assets in the trust, while charitable gift annuities are contractually backed by the assets of the University of South Carolina Educational Foundation.

   The charitable remainder unitrust is the most flexible life income gift, and it also pays you variable income. The amount received by income beneficiaries is based on a fixed percentage of the value of the trust, which is revalued annually. This means that the unitrust's income payout rate can be applied against an increasing principal over time if the assets in the trust grow. The unitrust can pay multiple beneficiaries and can pay income for lifetime or a term of years. Like the charitable remainder annuity trust, the charitable remainder unitrust is individually managed.

5. My goal is to keep my estate intact, not increase my income.

   Consider a charitable lead trust. It works essentially in reverse from the life income gifts discussed in Questions 3 and 4 above: your gift is placed in a trust that pays income to the University of South Carolina or one of its affiliated foundations for a term of years, then returns the principal to beneficiaries you designate.

   The charitable lead trust can be an effective tool to remove a portion of your assets and estate from tax liability and pass appreciation to your children free of transfer tax.