Giving Annual Gifts In 2115 And Beyond
By Jackie Jacobs
Would you like to make a gift to your favorite charities 100 years from now? You can…and here’s how: Simply add up your annual gifts for the year and multiply by 25. Then make an estate gift for this amount (through your will or other device) to your community foundation that is designated for the agencies that you wish to support. That is all there is to it: you have endowed your giving!
Your endowment will provide an annual gift at roughly the same dollar value you are giving now. Long after you are gone – even 100 years from now – the community will continue to receive your annual gift(s).
The community foundation’s managers will invest the principal of the endowment, always being careful to make enough income to meet the payout requirements of the fund. Since the principal is kept intact, the endowment never dries up. It’s like an artesian well. Your giving goes on and on and on.
Here’s an example of how this works: Mary gives her two favorite charities $500 every year. She realizes that the charities depend on her giving and wonders how they will fare when she is no longer alive to send each of them $500.
Mary instructs her attorney to add a codicil to her will, providing a $25,000 bequest to the community foundation for a permanent endowment fund that must always support those two agencies as the beneficiaries of the endowment’s earned annual income.
The initial income from her endowment gift will be $1,000 (assuming a 4 percent return). Income will grow as the endowment appreciates over time. Mary is pleased because she knows that money from the endowment fund will be given to the two charities every year, just as though she were sending a check herself.
The idea of an endowment fund may captivate you to the point that you will want to establish a larger fund – bearing your name – for either a restricted or unrestricted purpose. This can be done now, or through an estate gift when you are gone.
Always feel free to call me at 614-338-2365 to explore tax-wise charitable giving options that benefit you and the community, including ways to set up endowments like the one described in this article.
Article appears as originally published in the Ohio Jewish Chronicle, May 14, 2015.
Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.