Ways to Give
Giving to a college or university is as easy as entering a credit card number online or mailing in a check. Creating a transformative gift, however, requires deep thought about structure, timing, and implementation. The Fund for Academic Renewal (FAR) can help you navigate your options and design a plan that aligns with your goals.
Ways to Structure Your Gift
One benefit of making a gift to a college or university is their familiarity with complex assets such as real estate, appreciated stock or artwork, and giving types. While your financial advisors can help you identify the most tax-efficient approach, you should also consider which type of gift best supports your purpose.
If you are building a new program with your gift, you may wish to give through installments over a period of time rather than making a one-time outright gift. While endowments can offer a lasting legacy, they also carry a higher risk that your intent will be overlooked. A challenge gift, which matches contributions up to a set amount, not only increases your gift’s impact but can attract additional donors to the institution.
Each type of gift structure is associated with different university fees and requirements. For example, outright gifts do not usually incur gift administration fees. Endowed gifts, however, may incur both an investment fee and a gift administration fee. It is always best to inquire about fees up front when negotiating the terms of a gift.
How to Give
While tax considerations are the primary driver when it comes to choosing how to give, some giving vehicles are a better match than others. A donor-advised fund works well for outright gifts, but a family foundation may protect donor standing, the potential legal right to enforce a gift agreement, in a way that a DAF does not.
Here are a few common options to consider:
- Donor-advised fund (DAF): A tax-efficient account held at a financial institution from which you recommend grants to charities.
- Family foundation: A private foundation offering long-term giving capacity, often used for more substantial or multi-year commitments but subject to a 5% payout regulation and annual filing with the IRS.
- Charitable Trusts & Annuities: Vehicles that allow you to support a cause while providing income to yourself or your heirs.
In addition to being able to handle more complicated assets, universities are also equipped to deliver reporting to donors on how their gift is being used. Whichever vehicle you choose, you should request these reports and, if possible, retain the ability to stop future gifts should you discover a breach of your agreement.