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Endowment
For generations, the Athens YMCA and Athens Y Camp have been instrumental in shaping young people in body, mind, and spirit. Thousands of young boys and girls have not only been taught the rudiments of sports at the Y, but have learned fair play and good sportsmanship… how to win and also how to lose… lessons that are the fundamental building blocks of life. Here, boys and girls receive spiritual and moral guidance that sets them out in life on the right path. Today the Y serves many purposes. As a family YMCA it provides a wholesome setting for recreation for girls and boys and, indeed, for the entire family. The Y serves an important role in the community; including the development of relationships that endure for a lifetime, and building and strengthening character traits that undergird a young person's ability to effectively meet the challenges of the future.
In light of this, we hope that you will consider making a contribution to help sustain the vital programs of the Athens YMCA in years to come. If you're interested in making an investment in the Y, here are a number of ways that may be accomplished:
Cash Contribution
The most popular form of contribution is cash. A cash gift isn't subject to gift or estate taxation.
Cash donations are fully deductible up to 50% of you adjusted gross income. Should you wish to give a larger amount, the overage can be carried over and deducted in subsequent years (up to 50% of your adjusted gross income each year, until the total amount is claimed), for as many as five years. The amount of the gift is removed form your estate, which saves on estate taxes.
Example: Mr. Roberts has an adjusted gross income of $60,000. He makes a contribution of $40,000 to the Y. He can deduct $30,000 this year and carry over $10,000 to deduct next year.
Securities Contribution
Many contributors find that a gift of stocks or bonds is more beneficial to them than a cash gift. Marketable securities which have been held for more than one year can be taken as a charitable deduction at there full market value. This is determined by averaging the high and low sale prices of the stock on the date of the donation. You can deduct up to 30% of your adjusted gross income over a five year period, with no gift and estate taxation just the same as you could with a cash gift. The added benefit to the donor is that there will be no capital gains taxes on the appreciation in value of the securities. If the securities have been held for a number of years and grown in value, then this could be a significant benefit to the contributor.
Example: Mr. Johnson has a $90,000 adjusted gross income this year. He makes a contribution to the Y of stocks, which he has held for several years. He purchased them for $10,000. They're now worth $50,000. On the date of his donation, the stock traded at $51,000. Mr. Johnson can deduct $27,000 on this year's taxes and carry over $23,000 and deduct it the following year. Mr. Johnson avoids having to pay any capital gains tax on the $40,000 appreciation on his stock that he would have had to pay if he'd sold it.
Real Estate Contribution
The regulations for a gift of real estate are basically the same as a gift of securities. You can give any appreciated real estate that has been held for a year or more. A charitable deduction can be claimed for the full fair market value of the property as long as the gain would be taxed as long term capital gain. As with securities, you may deduct up to 30% of your adjusted gross income in the year of the donation with five years to carry over the remaining value. There are no gift taxes and you avoid capital gains taxes on the paper profit on the property. It has been removed from your estate, which means an additional savings on estate taxes.
Virtually any real estate holding can be used as a contribution. This includes developed or undeveloped land, farms, commercial buildings or residences.
All potential gifts of real estate must be evaluated by the Athens YMCA Endowment Fund Committee. The Y must take into consideration such factors as maintenance, insurance, property tax obligations and other possible liabilities.
Bargain Sales Contribution
A bargain sale is the gift to the Y of property such as securities or real estate for less than the full fair market value. The Y would pay you a portion of the value of the property - usually the amount of your actual investment. The appreciation portion of the property is considered a donation to the Y. You recover your original investment cost while receiving a tax deduction on the amount of the appreciation. Taxes will be to be paid only on the part of the gain attributable to the bargain sale.
The formula for calculating this gain is: Total gain in value X (selling price to the Y / fair market value) = Gain
Example: Mr. Stevens purchased land several years ago for $20,000. The property has recently been appraised at $100,000. The YMCA agrees to pay Mr. Stevens $20,000 for the property. Mr. Stevens recoups his original investment cost of $20,000 from the Y. He then takes a charitable contribution deduction of $80,000, the appreciation on the property which is considered as a gift to the Y. Using the formulation below to determine his capital gain - $80,000 X ($20,000 / $100,000) = $16,000 - Mr. Stevens must report a capital gain of $16,000 and pay the appropriate tax.
Life Insurance Contribution
The most commonly donated life insurance policies are paid-up "whole" and "universal life." Paid-up policies have a cash value, which may be utilized at any time by the Y. To make a contribution of a whole or universal life policy, the Athens YMCA should be named as owner and beneficiary. You are allowed to claim a tax deduction equal to the lesser of either the replacement cost or the cost basis of the policy.
Estate Gift
Many people find the estate gift to be a desirable way to make a contribution to the Athens YMCA. The estate gift may range from a few hundred dollars to a million or more...The amount is specified in the will as a bequest. It may be restricted for certain purposes or unrestricted, to be used where the Y has the need.
Should you wish to make an estate gift, you may designate in your will, a certain amount of money, or you may designate a specific asset, property, or a percentage of your estate. This is called a "specific bequest." Another type,"residual bequests" are received by the Y after all debts, expenses, taxes and other bequest expenses are paid.
A "contingent bequest" is a way to make a gift to the YMCA in the event of a contingency, such as, "if my child/heir should predecease me, then I would leave my estate to the Athens YMCA."
A variation of this plan is the "testamentary trust" in which you specify that a portion of your estate is to go to a "charitable remainder trust." This will pay an income to a specific beneficiary for life. Upon the death of the beneficiary, any remaining funds will be received by the Athens YMCA.
Thank You
We appreciate your consideration of the Athens YMCA as a recipient of a contribution. Though we have outlined several ways of giving and have offered examples, this should in no way be considered tax, legal or investment advice, and we recommend that you consult with appropriate counsel before making any significant gift.
For additional information, please contact the YMCA's Executive Director (Kirk L. Eich) at (706)543-6596.
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