Planned Giving

PLANNED GivinG:

MAKING A LASTING DIFFERENCE a philanthropy resource from the philadelphia foundation 1234 market street | Suite 1800 | Philadelphia, PA 19107 | 215-563-6417 | www.philafound.org

Planned Giving Through The Philadelphia Foundation

Charitable Gift Annuities 1

Planning what will happen to your estate after your death offers many personal, financial and tax benefits to you and to your loved ones. It provides a lasting testament to your values and ensures that what you have spent a lifetime building is allocated according to your wishes.

The Philadelphia Foundation can help. Since 1918, we’ve assisted those who want to make sure their assets perpetually support the causes that mattered most to them during their lifetimes. The Foundation invests and manages more than 800 component funds that individuals, families and companies have created to provide scholarships and to support nonprofits in Bucks, Chester, Delaware, Montgomery and Philadelphia counties.

Philanthropy Through A Will Create a Fund The Philadelphia Foundation can provide you with the appropriate language to create a permanent charitable fund through your will. Some fund types allow your descendants to help guide the fund’s spending. Please contact us for assistance.

Add to an Existing Fund You also can contribute to any existing fund at The Philadelphia Foundation through your will. This includes Community Impact Funds established to meet our region’s greatest needs. Please contact us to explore which fund you would like your estate to support.

GIFT OF PROPERTY TAX DEDUCTION

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CHARITABLE

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GIFT ANNUITY

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2 INCOME TAX DEDUCTION REDUCED CAPITAL GAINS TAX FIXED INCOME

PLANNED GIVING THROUGH THE PHILADELPHIA FOUNDATION

You can earn income now and support your favorite causes in the future through a Charitable Gift Annuity (CGA), a simple contract between you and The Philadelphia Foundation.

1. You transfer cash or appreciated securities to The Foundation in return for a lifetime of fixed payments for up to two people (the older the donor, the higher rate of return). You receive tax deduction on the charitable contribution of the gift and part of each quarterly payment may also be tax-free.

2. At the end of your life, the remaining principal is transferred to your chosen funds at The Philadelphia Foundation.

3. The fund provides ongoing support for the cause you selected.

HOW IT WORKS The Foundation’s minimum age to receive income from a CGA is 60. (Younger persons may establish an annuity and receive a tax deduction while deferring income until they are 60). A CGA may be established for $10,000 by a client with a fund of at least $10,000 at The Philadelphia Foundation. For others, the minimum contribution is $25,000. TPF, Inc. co-mingles all annuity assets in a special CGA pool that is managed separately from the endowment funds.

A $250 fee is charged annually on your first annuity. A $125 fee is charged annually for subsequently established annuities.

HAVE QUESTIONS NOT COVERED IN THIS BROCHURE? PLEASE CONTACT US AT 215-563-6417

Pooled income FUNDS

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Charitable remainder trusts

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GIFT OF PROPERTY TAX DEDUCTION

GIFT OF PROPERTY

POOLED INCOME FUND

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2 INCOME TAX DEDUCTION VARIABLE INCOME

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TRUST

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2 INCOME TAX DEDUCTION FIXED OR VARIABLE INCOME

DESCRIPTION: A Pooled Income Fund is a type of mutual fund maintained by a charitable organization.

DESCRIPTION: Giving through a Charitable Remainder Trust allows you to receive income for life, knowing that whatever remains will benefit the community.

How it works You can join the pool by contributing a minimum of $5,000. Subsequent contributions of at least $1,000 can be made at any time.

How it works 1. You transfer cash, appreciated stocks, real estate, or other assets to a trust, which allows you to receive an immediate charitable tax deduction for the charitable portion of the trust.

1. You name one or possibly two life income beneficiaries – yourself and your spouse, for example. Income beneficiaries must be at least 50 years old. The life income beneficiary you name receives regular quarterly income payments from the Fund for life. You receive a tax deduction on the charitable contribution of the gift based on IRS tables. If you contribute appreciated securities, you pay no capital gains tax on the appreciation. Your interest in the fund is not taxed as part of your estate.

2. Although actual income varies with market conditions, the investment objective of The Foundation’s Pooled Income Fund is to seek current income consistent with reasonable risk by investing in a portfolio of high-quality bonds and stocks. The Fund also offers the potential for moderate growth of capital.

When the capital increases, the annual income from it will also grow. This means that if you donate securities that are now paying you a low dividend, you may actually increase your income through the Pooled Income Fund.

3. When the last income beneficiary dies, your share (called the remainder interest) is removed from the Fund and turned over to The Philadelphia Foundation for charitable purposes, fulfilling the specific purposes you requested.

2. The trust then pays you or your designated beneficiary regular income payments for life. Upon the beneficiary’s death or after a defined period of years, the remaining assets in the trust transfer to your fund at The Philadelphia Foundation.

3. The Philadelphia Foundation sets up a fund in your name, in the name of your family or business, or any other name you choose. The assets in the fund will be placed into an endowment that is invested over time. The Philadelphia Foundation handles all the administrative details after the fund is established, issuing grant awards to charities in the name of the fund. The assets and future earnings are a permanent source of community capital, helping to do good work forever.

The Philadelphia Foundation manages both Unitrusts, which pay variable incomes, and annuity trusts, which pay fixed income.

HAVE QUESTIONS NOT COVERED IN THIS BROCHURE? PLEASE CONTACT US AT 215-563-6417

Charitable lead trusts 2 1

CHARITABLE LEAD TRUST

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4 BENEFICIARY RECEIVES REMAINDER UPON DEATH

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TPF FUND: • •

BUILDS WITH ANNUAL PAYMENTS BECOMES PERMANENT SOURCE OF SUPPORT UPON DEATH

REMAINDER TO

Description A Charitable Lead Trust (CLT) helps you make a difference while maintaining the ability to transfer future assets to another family member or another designated person.

How it works 1. You transfer cash, appreciated stocks, real estate or other assets to an irrevocable CLT where The Philadelphia Foundation (TPF) acts as the Trustee. In establishing the CLT, you designate the term of the CLT, (i.e., whether the Trust can remain in effect either for a pre-defined period of years or until your death) and the final beneficiary of the CLT, which is usually a family member.

2. At the same time the CLT is established, TPF establishes an internal, endowed fund that is named according to your wishes.

You also indicate a specific charity or charitable field of interest that will be the recipient(s) of the endowment.

3. Annual payments received by TPF from the CLT are deposited into the endowed fund – helping build the endowment over time.

4. After the term of the CLT expired, i.e., upon your death or after the defined period of time, the remaining assets are transferred to the final beneficiary. The endowed fund established at The Philadelphia Foundation continues to exist and become sustainable income for the designated nonprofit.