Making an unrestricted gift is one of the most effective ways to make a difference in the life of the college. These funds are available for immediate use and provide vital support to meet the college’s most pressing needs. These gifts can be made with cash, securities and other such assets. They often qualify you for a charitable income tax deduction and can be designated for any area of the college. These generous gifts are use to:
Consider joining the community of supporters who believe in the mission to continue a tradition of excellence in the Liberal Arts at The University of Texas at Austin. Make an unrestricted gift today.
All endowment funds are placed in long-term accounts, where the principal remains intact. All funding from endowments is drawn from the earned interest. Endowments offer a donor the opportunity to support an area they are passionate about and the funding source created by the endowment will continue for generations. Endowments can be created through a one-time payment or through installments over a 5-year period. The College of Liberal Arts benefits from several types of endowments. View a list of the college’s recent endowments.
|Endowment areas||Minimum to establish|
|Grad. Research Fund||$40,000|
|Undergrad Res. Fund||$20,000|
Gifts that Provide Income for Life and Tax Savings
The charitable gift annuity is similar to a commercial annuity, providing immediate fixed payments for life, but the funds remaining at the termination of the contract are distributed to the College of Liberal Arts. A deferred charitable gift annuity provides an immediate and larger tax deduction and a higher rate of return by deferring the start of the annuity payments to a future year you designate.
Rose Myers, 75, wants to make a stock gift to the College of Liberal Arts but is concerned about giving up the dividend income from the stock. After speaking with her financial advisor, Mrs. Myers learns that charitable giving and retaining an income stream are not mutually exclusive. She establishes a charitable gift annuity funded with stock that she acquired several years earlier for $20,000, which has appreciated in value to $50,000. Mrs. Myers is happy with the results:
- Mrs. Myers establishes a gift annuity valued at $50,000.
- Her gift earns her a charitable tax deduction of $21,338.
- At her 28 percent tax bracket, this deduction saves her $5,975.
The Pooled Income Fund operates like a mutual fund and pays quarterly distributions for life. The fund combines gifts from many donors for investment purposes, shares the net income proportionately among them, and distributes the remainder to the College of Liberal Arts upon the death of the surviving income recipients.
Establishing a charitable remainder trust (CRT) is a wonderful way for you to increase your spendable income and save on income and capital gains taxes while providing lasting benefits for the College of Liberal Arts. The concept is simple: you irrevocably transfer cash, securities or other property to a trust and designate a person or persons who will receive income (you may be one of them). A CRT lasts for a fixed number of years not exceeding twenty or for the income recipient’s life. During the term of the trust, the income recipients you chose receive a set payout percentage from the CRT. When the trust term ends, any remaining trust property passes to the college.
Todd and Lisa Jenkins , 64 and 58, want to make substantial future gifts to the College of Liberal Arts but are concerned about avoiding capital gains tax on highly appreciated stock. They also would like to enhance their income during retirement. The Jenkins learn that a charitable remainder unitrust would enable them to avoid any capital gains tax on the contributed stock while increasing their income. They establish a trust with 5 percent return, funded with a stock valued at $500,000 and a 1.5 percent dividend payout rate. Here are the results:
- The Jenkins establish a unitrust valued at $500,000
- Their gift earns them a charitable tax deduction of $153,205
- At their 39.6 percent tax bracket, this deduction saves them $60,669
- Avoidance of capital gains tax on $400,000 appreciation saves them $80,000
- A 5 percent unitrust payout yields a first-year payment of $25,000*
*Future years’ payments will vary, based on five percent of the unitrust’s market value at the beginning of each year.
A bequest is one of the most powerful and flexible expressions of your support. If you are considering naming the College of Liberal Arts as a beneficiary of your will we can provide language to you and your attorney to ensure that your intentions are properly carried out. A carefully planned bequest is an excellent way to leave a significant legacy while reducing, and in some situations, eliminating estate taxes.
Life insurance can offer an attractive way to leverage low-premium payments to make a major gift to the College of Liberal Arts. If you name the college as the irrevocable beneficiary and owner of your policy, you obtain an immediate charitable tax deduction. You have the ability on your insurance beneficiary form to specify the college as the school on campus you wish to benefit.
Qualified retirement plans are an excellent way to build financial security for retirement. Should you pass away however, leaving these funds as part of your estate, your heirs could face double taxation—estate and income tax—spiraling up to 85 percent. You can avoid this penalty with proper planning.
Mr. James Allen, 45, a new supporter of the College of Liberal Arts, designates his wife as primary beneficiary of his well-funded qualified retirement plan. He understands, however, that at least 70 percent of his retirement plan assets could be depleted by taxes if Mrs. Allen predeceases him and leaves these assets to his children. His CPA advises Mr. Allen that he could name the College of Liberal Arts as the secondary beneficiary and provide for children through his estate plan with other assets that are not subject to double taxation. At Mr. Allen’s death, if Mrs. Allen has predeceased him, his retirement plan assets will create an endowed graduate fellowship program at the college.
By “lending” assets to the college for a designated period of time through a charitable lead trust, you can pass those assets to your heirs and at the same time greatly reduce or eliminate federal estate and gift transfer taxes that could consume up to 55 percent of your legacy. This type of gift is particularly beneficial if the assets have a great potential to appreciate. Assets most commonly used to fund a lead trust are closely held stock, marketable securities and partnership interests.
When you deed a remainder interest to the college, you can continue to live in your primary residence, vacation, home, or farm for the rest of your life. The property passes to the college after your lifetime. At the time of the gift, you will receive a charitable tax deduction based on the market value of the property and your age. You may designate the college to receive the proceeds from the sale of your property after your lifetime.
For a gift of real estate you have held for one year or more, you may take a charitable income tax deduction of the fair market value of the donated property—up to 30 percent of your adjusted gross income in the year of the gift—and carry forward any excess deduction for up to five additional years. Outright donations of assets such as equipment, farm property, closely held stock, and many other forms of property can also result in a substantial deduction.
The College of Liberal Arts welcomes support from corporations and foundations. Forming partnerships with the private and nonprofit sectors has enabled the college to strengthen its investment in scholarship, its research enterprise, and to foster opportunities for companies and foundations to have a measurable and positive impact on education as it relates to the liberal arts.
You can submit your gift online through our secure online web form or we welcome the opportunity to meet with you and seek your guidance in assisting the college. If you would like to send in your gift, please mail your gift to:
Assistant Dean for Development
College of Liberal Arts 1 University Station, G-6300
The University of Texas
Austin, Texas 78712
You may also e-mail Kathleen Aronson at firstname.lastname@example.org or call (512) 475-9763 to receive more information about any of the giving opportunities discussed here.