Comparing Types of Gifts

Charitable gifts reward donors in many ways. There is the satisfaction of supporting an important cause, the excitement of seeing your gift lead to positive change, and—in many cases—tangible financial benefits to you and/or another beneficiary, through tax advantages and the retention of lifetime income from the donated asset.

Type of GiftMay Be
Funded With
Amount Needed to EstablishBenefits for YouBenefits for UW-Madison
Current / Outright GiftsCash, appreciated securities, closely held securities, real estate, personal propertyNo minimum or maximumUsually fully deductible for 100 percent of the fair-market value, subject to certain limitationsFunds are immediately available for use
Charitable Lead TrustsCash, appreciated securities, closely held securities, real estate$500,000Freezes value of assets contributed for gift- and estate-tax purposesProvides steady flow of income for a period of years
Revocable TrustsCash, appreciated securities, closely held securities, real estateTo be determined by Personal CounselAll or part of the amount placed in the trust is available if needed by the donor; if a commercial trustee is chosen, may relieve the donor of the responsibilities and headaches of asset management; no tax deduction is available for this kind of trustA very high percentage of revocable trusts are never revoked, giving promise of future funding to the Foundation
Will provisionsCash, appreciated securities, closely held securities, real estate, personal propertyNo MinimumEstate-tax charitable deduction is available for the full fair-market value of the bequeathed asset; may reduce estate and death taxes, thereby increasing the size of the estate available for heirsA very high percentage of will provisions are never revoked, giving promise of future support to the University

Life-Income Gifts (irrevocable)

Type of GiftMay Be Funded WithAmount Needed to EstablishBenefits for YouBenefits for UW-Madison
A. Charitable Gift AnnuitiesCash, securities, some closely held securities$10,000Guaranteed fixed income; immediate tax deduction equal to the Foundation’s remainder interest in the gift; favorable tax treatment of annuity paymentsAssures future funding of the designated purpose
B. Deferred-Payment Charitable Gift AnnuitiesCash, securities, some closely held securities$10,000Immediate tax deduction equal to the Foundation’s remainder interest in the gift; future source of fixed income; favorable tax treatment of annuity paymentsAssures future funding of the designated purpose
C. Charitable Remainder UnitrustsCash, securities, some closely held securities, real estate$100,000Immediate tax deduction equal to the Foundation’s remainder interest in the gift; variable income that may provide a hedge against future inflation; avoidance of 100 percent of capital-gain tax liability on gifted property. Can be tailored to your situation; permits more than two income beneficiaries; allows deferred income if desired; excellent vehicle for real estate giftsAssures substantial future funding of the designated purpose; donor may select the trustee; the Foundation could, if desired, use trust as collateral for loan
D. Charitable remainder annuity trustCash, appreciated securities, some closely held securities$100,000Immediate tax deduction equal to the Foundation’s remainder interest in the gift; fixed income; avoidance of all capital-gain tax on gifts of appreciated property; may provide tax-free incomeSame as unitrust

Gifts of Insurance

Type of GiftAmount Needed to EstablishBenefits for YouBenefits for UW-Madison
Gifts of insurance where the Foundation is made the owner and beneficiary of a permanent policyNo MinimumImmediate income-tax deduction for the value of the policy at the time of transfer; future premium payments may be deducted as giftsAssures substantial future funding of the designated purpose; the Foundation also may borrow against the policy or cash it in
Gifts of insurance where the gift is a paid-up policyNo MinimumImmediate income-tax deduction for the value of the policy at the time of transferAssures substantial future funding of the designated purpose; the Foundation also may borrow against the policy or cash it in
Gifts of insurance where the Foundation is the beneficiary but not the ownerUnlimitedNo tax deduction, but this enables you to leverage your gift substantially; you may change the beneficiary later or borrow against the policyPromise of future support to the University