Planned Giving - Frequently Asked Questions

The preparation of wills and trusts needs an attorney's professional training. These examples are shown as a public service to provide information of a general nature only. For your specific circumstances, professional legal and tax advice should always be sought.

For more information, please contact our Development Director Linda Rosso at lrosso@cacsb.com or call 805-964-8857 extension  #1105

Planned Giving

What is Planned Giving?

Planned giving is the process of donating planned gifts. A planned gift is a contribution that is arranged in the present and allocated at a future date.

Commonly donated through a will or trust, planned gifts are most often granted once the donor has passed away. Always consult with your financial advisor or attorney for further details and clarifications.

What is a Planned Gift Program?

A planned gift program is a means of donors leaving behind a legacy to carry on their commitment to support CommUnify’s mission. Planned gift programs also serve to help support you, the donor, throughout the process of enacting a planned gift. Along with major gifts, planned gifts are the biggest donations a nonprofit receives. They can both greatly aid our organization and help to continue our loyal donor’s legacy.

Although the agency will not immediately receive planned gifts as we would major gifts, their scope and scale make them extremely worthwhile to our agency.

Planned giving represents a large, often untapped, proportion of donor gifts.

What are the benefits of Planned Gifts for Donors?

Sizable tax break

From a fiscal perspective, the tax breaks are an enormous advantage to making a planned giving arrangement. The specifics will vary according to a range of factors, so we will evaluate the possibilities on a case-by-case basis.

Control how funds are used

Donors can give to a certain campaign or to the annual fund, but rarely do they have the chance to detail exactly how their money should be spent within the organization. Planned gifts put complete power in the donor’s hands.

Donor loyalty

Many donors want to give major gifts in their lifetimes but do not have the financial flexibility to do so. Planned giving allows donors to give those large gifts after they have passed away, when life expenses will not interfere.

Differences between Planned Gifts and Memorial Funds

Planned Gifts

Planned gifts are arranged by the development staff and the donors themselves. They are set up in advance, often in coordination with the creation of a will.

While a family might donate the money in a memorial fund to their loved one’s favorite charity, memorial funds come from friends and family whereas planned gifts come from a decision made by the donor. Although donations from memorial funds are certainly welcome and can have a big impact, organizations can’t put plans and programs in place to acquire them the same way they can with planned gifts.

Memorial Funds

Memorial funds are almost always created after someone has passed away.

A memorial fund might be seeded by a one-time fundraiser or it could be a continual fund that is donated to regularly. In many cases, memorial funds are set up to help the family of the person who has passed away cover the costs of a funeral or daily expenses. In some cases though, the fund is established to make a charitable donation in honor of the person who has passed away, in which case the memorial fund would share some similar traits with a planned gift.

Sample Language for Planned Giving

If you are creating a new will or trust, simply adding a codicil to a will, or amending an existing trust, the following sample language may be useful to you and your estate planning attorney. This is not a substitute for the language your attorney will incorporate in your will or trust. We urge you to secure the services of an attorney competent in estate planning in your state.

Codicil

A Codicil is a document used to make minor changes to an existing will. This document is used when the person who created the will, known as the Testator, does not want to create an entirely new will to make minor changes, such as adding, deleting, or changing an existing provision.

General Bequest

"I give to CommUnify, 5638 Hollister Avenue, Suite 230, Goleta, CA 93117, Federal Tax Identification #95-3680171, ___________________Dollars ($___________)."

Specific Bequest

"I give to CommUnify, 5638 Hollister Avenue, Suite 230, Goleta, CA 93117, Federal Tax Identification #95-3680171, [insert here a description of the particular property]."

Residuary Bequest

"I give to CommUnify, 5638 Hollister Avenue, Suite 230, Goleta, CA 93117, Federal Tax Identification #95-3680171, [all] [a portion] of the rest of my estate."

Contingent Bequest

"If [name/s of primary beneficiary/ies] do/es not survive me, or shall die within ninety (90) days from the date of my death, or as a result of a common disaster, then I give to CommUnify, 5638 Hollister Avenue, Suite 230, Goleta, CA 93117, Federal Tax Identification #95-3680171, [insert here the exact dollar amount, description of property, or percentage of residual estate]."

Residual Gift

A residual estate gift comes to us after your estate expenses and other gifts are paid.

"I give and devise to CommUnify, 5638 Hollister Avenue, Suite 230, Goleta, CA 93117, Federal Tax Identification #95-3680171, all [or state a percentage] of the rest, residue and remainder of my estate, both real and personal, to be used to support its Healthy Senior Meals Program."

Charitable Gift Annuities (CGA)

Gifts that pay you income

There's a way for you to support CommUnify and feel confident that you have dependable income in your retirement years. You can do this with Charitable Gift Annuity (CGA).

This popular planned gift can provide you with secure lifetime payments and allow us to further our work on behalf our community. The minimum CGA donation to CommUnify is $10,000, either in cash or with long-term appreciated stock. You qualify for a partial income tax charitable deduction and a portion of your payments are tax-free throughout your life expectancy.

Like most of the other organizations that offer CGAs, we follow the suggested maximum rates set by the American Council on Gift Annuities. CommUnify is offering CGAs, and we work with Montecito Bank & Trust of Santa Barbara to administer our program.

Gifts that pay

Your payments depend on your age and the number of annuitants (one or two). If you are between the ages of 55 and 65, we recommend that you learn more about deferred gift annuities.

Endowment Fund

An endowment is a permanent fund given to an individual, institution or agency for the ongoing support of that organization.

Endowments can account for 40 percent of the operating budget and be structured so that the principal amount is kept whole, while the investment income and gains are available for use each year to support programs. Once established, an endowment grows over time and has an impact in perpetuity. The impact of these generous gifts is seen and felt across the community every day, ensuring a sustainable base for future of CommUnify.

How do I create an Endowment?

An endowment can be created by making a one-time gift of cash, credit card or securities, or by creating a pledge, payable over five years or less. Endowments can be created with planned gifts, as directed by estate plans or a charitable gift annuity or trust. A development professional can help you create the payment arrangement that best meets your needs.

Once a donor decides to create an endowment at CommUnify, they will work with one of our development staff members to create an endowed fund agreement (EFA).

Sample Endowed Fund Agreement

(I, We), ______________, of _______________ (city, state (no abbreviation), hereby (give, pledge) to CommUnify, A Community Action Agency, ("CommUnify”) a gift in the amount of $______________.  (I, We) wish to create a permanent endowed fund with CommUnify to be administered according to the following provisions.

  1. The property composing (my, our) gift may be merged for investment purposes with the general investment assets of CommUnify, but (my, our) gift shall be entered into the books and records of CommUnify ("The Fund"), and shall always be so designated.
  2. The purpose of The Fund is to provide need-based assistance to CommUnify’s Healthy Senior Nutrition Program or _________________.
  3. The amount available to be expended from The Fund each year will be determined in accordance with the policies established by the Board of Trustees of CommUnify, in accordance with The California Uniform Prudent Management of Institutional Funds Act.
  4. Should the fulfillment of the purpose of (my, our) gift become impracticable, unlawful, impossible to achieve, wasteful, obsolete, or inappropriate, as determined by the Board of Trustees of CommUnify, then (my, our) gift should be used for the purpose most in keeping with (my, our) special interests as described in paragraph (2).  However, The Fund shall always be retained as a permanent endowment and known as the (Name of Need-based Endowed Program) in the books and records of CommUnify.
  5. Any person, including any individual, corporation or foundation, may make additions to The Fund at any time, and such additions shall be subject to the provisions of this instrument.

Signatures and dates