Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
32 Cards in this Set
- Front
- Back
|
Bequest expectancy or planned gift expectancy |
Term commonly used within planned giving programs to unofficially report the value or approximate value of gifts to be received in the future. Some organizations use an expectancy value of $1 for gifts until a more appropriate value can be determined. Other organizations choose to use an average gift expectancy value. This is often arrived at by using a five or 10-year rolling average of actual planned or bequest gifts received by the organization. Be careful not to inflate that value by including unusually large gifts. Because some planned gifts may not be received for months or years from a complex estate or where an asset must first be sold, having an expectancy amount helps to provide a picture to organizational leadership and other staff members of the importance that bequest gifts have on future revenue. |
|
|
Bequest intention or planned gift intention |
A donor's indication of his or her intent to leave a future gift. An intention is neither a legal nor binding commitment upon the donor's estate. Rather, it is a courtesy notification of the donor's desire to make a future gift. With the average bequest gift hovering at around $35,000, many organizations treat these donors as they would a major donor and include them in a legacy recognition club. Because of the nonbinding nature of the intention, however, it is most wise to provide benefits that are either of no cost or low cost, such as listing donors in acknowledgment publications, sending them special invitations or advance notices for organizational activities, or perhaps giving them a token thank-you gift. |
|
|
Bequest notification or planned gift notification |
The estate representative's official notification that a bequest or other estate gift has come to realization. If the gift is a percentage of an estate, a remainder gift, or a gift of personal property, it may not be possible to determine the value of the gift immediately. In this case, a gift expectancy value may be used. |
|
|
Capital gains |
When investment (or capital) assets are held for longer than a year and then sold to another person or given to a charity, the gain or appreciation in the value of the asset is subject to government taxation on the gain (or profit). If the price of the asset has declined instead of appreciated, this is called a capital loss. Capital gains occur in both real assets, such as property, as well as financial assets, such as stocks or bonds. |
|
|
Charitable bequest |
A provision in a will, trust, or estate plan that allocates a gift to a designated charity. The most common gifts to nonprofit beneficiaries are cash, securities, and real property including homes and personal property (things). Many wills and trusts are still written with quite formal language and might be similar to this example: "I give, bequeath, and devise the sum of fifty-thousand dollars ($50,000) to St. Mark's Church, located at 123 Main Street, Middletown, Alabama." The most common gift amounts are usually stated in one of the following three ways: 1. A specific amount, such as the example just given. 2. A percentage amount, such as “…Ten percent (10%) of my estate to St. Mark's Church…” or 3. A remainder amount also called "residue," such as After all specific bequests have been paid, "I give, bequeath, and devise the remainder of my estate, including real and personal property, to St. Mark’s Church…” |
|
|
Charitable gift annuity (CGA) |
An irrevocable transfer of property (e.g., cash, securities) in exchange for a contract to pay the donor or the donor's designee an annuity for life. Depending on state law, payments could begin immediately or may be allowed to be deferred until a future date. Because the value of the property exceeds the value of the annuity, it is partially a gift to the institution. While most charitable gift annuity contracts are established between the donor and the organization to receive the remainder gift amount, community foundations have been given permission from the IRS to issue such gift annuity contracts on behalf of other qualifying charitable organizations. Additionally, there are different types of charitable gift annuities, and not all states permit the use of each type: When all of the annuitants have passed away, the residuum, or remains of the initial gift plus any interest income, is distributed to the charity to be used according to the contract's directions. Usually, this is for general use by the charity but may be restricted by the donor for a particular use, such as student scholarships or biomedical research. OR A college tuition annuity allows a donor to create a single-life annuity that defers payments until a child or grandchild is expected to enter college. The child has the option of accepting the annuity payments for his or her lifetime or to receive much larger payments over a shorter period of time, usually four to five years. |
|
|
Charitable lead trust (CLT) |
Similar to a charitable remainder trust, the CLT is different in that the annual payments are given to a charitable organization and the principal reverts to the donor or to his or her designated beneficiaries at the end of the trust term. If the principal reverts to the donor, he or she gets a charitable income tax deduction; if to another, that person gets a charitable gift tax deduction |
|
|
Contingent bequest |
A provision in a will, trust, or estate plan that allocates a gift to a designated charity as an alternative to a higher priority bequest or condition to be met. Contingent bequests can also incorporate specific amounts, percentage amounts, or remainder amounts, such as the previous examples under the definition of "Charitable Bequest." For instance: "In the event that (named individual) predeceases me, I give Marcus University Foundation, 2345 East Street, Centerville, Texas, 25% of the residue of my estate to be used wherever the needs and opportunities are greatest." |
|
|
Cost basis |
This term generally means the purchase price of an asset or property. An asset's value will change over time and can therefore appreciate or depreciate from its original cost basis. Its value at the time of gifting would be classified as appreciated if it was worth more than was paid for it. Conversely, it would have depreciated value if it was worth less than was originally paid. |
|
|
Charitable remainder trust (CRT) |
An irrevocable trust that pays a specified annual amount to one or more people for a fixed period of years (often the life of the individual). At the end of the term of the trust, the remaining trust assets are distributed to the charity. A charitable remainder annuity trust provides a fixed payment as determined and stated in the trust document. OR A charitable remainder uni-trust pays out a fixed percentage of the trust value each year as determined and stated in the trust document. The value of the uni-trust is recalculated annually to determine the current payout. |
|
|
Cost per dollar raised |
Usually presented in dollars and cents, the "cost per dollar raised" attempts to calculate the effectiveness of a fundraising effort or campaign. The cost per dollar raised concept can be applied to a specific solicitation piece such as the May 2008 Gift Annuity Solicitation Appeal, or it can be applied to an entire campaign or program such as the Bequest Marketing and Solicitation Effort. There is no standard method between organizations, so costs per dollar raised can vary widely depending on what expense items are being included. Typically for planned giving solicitation efforts, costs are limited to the printing, mailing, and postage expenses that may or may not include mail house and data processing expenses. To assess the cost per dollar raised for a comprehensive planned giving program, staff salary and benefits, office expenses, outside vendor and legal/financial management, as well as other larger budgetary expenses, might be considered in the cost. |
|
|
Donor-advised fund |
A fund in which the donor exercises the privilege Of making nonbinding recommendations to the governing body as to which public charity or charities should receive grant money from this fund. |
|
|
Estate tax |
A federal tax on the net value of an estate before it is distributed to beneficiaries. |
|
|
Fair market value |
An estimate of what a willing buyer would pay to a willing seller, in a free market, for an asset or a piece of property. |
|
|
Gift tax |
This is a tax imposed on the lifetime transfer of property as a gift to a non-charitable beneficiary. The tax, paid by the donor, is based on the fair market value of the property on the date of the gift. |
|
|
Gross estate |
All the property, including life insurance and any transfers, owned by a decedent, or in which a decedent held any financial interest, or both. |
|
|
Income or current beneficiary |
The person(s) or entity(ies) that receive(s) the current income or distributions from a trust according to its terms. |
|
|
Legacy |
This term is often synonymous with bequest. |
|
|
Life estate |
A gift where the donor retains the right of use for life. |
|
|
Life-income gifts |
A generic term used to describe a variety of charitable gift vehicles that provide an income, usually for life, to a donor and/or his or her designated beneficiaries. Life-income gifts include, among other things, charitable gift annuities, charitable remainder trusts, both uni-trust and annuity trusts, and charitable lead trusts. |
|
|
Noncash asset |
When related to an outright gift or a planned gift, this term usually refers to an asset such as securities, life insurance policies, CDs, retirement accounts, real property, and the like. Conversely, gifts of currency and checks, as well as gifts using credit cards, are considered cash or cash-equivalent assets. |
|
|
Personal property or tangible personal property |
Think of this as things that can be touched or things that are tangible. Examples of gifts of tangible personal property to charities include book collections, art, and jewelry. It does not include, however, cash or cash equivalents such as checking accounts. |
|
|
Planned gift or planned giving |
Once called deferred giving, "planned giving" or "planned gift" refers to any charitable gift that requires more thought and planning to execute than the average donation. Planned giving has traditionally been defined as the gift that an individual makes near the end of his or her lifetime. There are many kinds of planned gifs, including, but not limited to; simple bequests in a will or an estate plan, charitable gift annuities, charitable remainder trusts, charitable lead trusts, and noncash assets. |
|
|
Present value |
The value that a gift expected in the future would be worth today. A future gift of $100,000 is not as valuable as a gift of $100,000 today due to factors such as inflation, currency fluctuations, and investment risk. Financial advisors may use the phrase time value of money, referring to the way the value of money changes over time. The present value of a gift of $100,000 to be received five years from now, given a 5 percent discount, would have a present value of only $78,352.62. |
|
|
Probate |
This is a court—supervised process of settling an estate in which all expenses are paid and all property is distributed in accordance with the terms of a will. |
|
|
Real property |
A general term that encompasses land, land improvements such as buildings and machinery sited on the land, as well as the various property rights associated with owning the land, buildings, and machinery. Real property that is mortgaged or otherwise is subject to another person's preceding claim is known as encumbered. Charitable gifts of encumbered property have their own sets of challenges and tax consequences. |
|
|
Remainder beneficiary |
The person(s) or entity(ies) that receive(s) the remaining assets from a trust when its controlling terms have been met or its term of years for existence has come to an end. |
|
|
Return on investment (ROI) |
This term is used by some organizations in place of the term cost per dollar raised and means essentially the same. In a more global setting, however, ROI has nonmonetary objectives such as public awareness of a product or new sales leads. In the financial world it means the ratio of money gained or lost on an investment relative to the amount of money invested. |
|
|
Securities |
Used for planned gift purposes, securities is a general term that includes the following: shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or Other options, limited partnership units, and various other formal investment instruments that can be exchanged for money. |
|
|
Split interest gifts |
These gifts, usually involving property or business interests, start with the idea of making a partial gift of an asset to charity while still retaining a partial interest in it. Because the donor retains some portion of the assets or the income from the assets, the term split interest gift is derived. The "split" refers to the fact that ownership is now divided between the original owner and in our case, a charity. Splitting the interest creates a problem in determining the value of the portion given to charity (gift portion) and the value of the portion which was kept (retained interest). |
|
|
Testate |
This involves having made and left a legal will at time of death. |
|
|
Will |
This is a legally executed statement of a person's wishes about what is to be done with the person's property after his or her death. |
