Mount Union Guide to Gift Planning

GUIDE TO

GIFT PLANNING

A TRADITION OF SUCCESS At the University of Mount Union, we are committed to providing our students with an education that equals success. Generations of Mount Union students have benefited from the philanthropic efforts of thoughtful and loyal supporters. We would not be the respected institution of higher learning that we are today had our predecessors not had the vision to move the University forward.

As Mount Union has progressed during the last several decades, careful planning and generous support have put the University in an enviable position amongst its peers. Mount Union is honored to be recognized among the best comprehensive colleges in the region. The combination of quality academic programs grounded in the liberal arts and opportunities for experiential learning outside the classroom make Mount Union stand out as a top choice for students and their families. It is important to celebrate our successes, but it is more important to continue to look to the future.

The University is taking proactive and strategic steps to remain competitive and relevant while also meeting the ever-changing needs of our students and society as a whole. We take great pride in the value of the Mount Union experience while remaining committed to making our highquality education accessible to students of all financial backgrounds.

The goal of this guide is to explain to you some of the best investment options and the benefits of giving to Mount Union. Through the generosity of our investors, we help each and every one of our students in their efforts to exceed their potential in learning and in life.

As you read this brochure, we hope you will be inspired by the potential impact your investment will have on Mount Union’s most valuable assets – our students.

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INVESTMENT IN MOUNT UNION

Through a gift to the University of Mount Union, you have an opportunity to positively influence both the immediate and long-term future of the institution.

A gift, whether for scholarships, academic programs, or facilities, will inspire the minds of a bright new generation of gifted young adults striving to become leaders within our communities.

What impact will your gift have on the University of Mount Union? First and foremost, your investment will strengthen the University so that Mount Union can continue to provide a student-centered approach with an exceptional educational experience. Second, your gift can improve your financial situation by reducing your current income and capital gain taxes and/or estate taxes. And finally, your investment, if you choose, can serve to create your legacy or honor the memory of or pay tribute to a relative, faculty member, or friend. These gifts, named for someone you choose, grant yourself or a loved one a small touch of immortality.

YOUR LEGACY Gift planning helps you integrate your personal and family financial goals with your charitable giving.

Your investment can create your legacy while furthering Mount Union’s mission of preparing students for fulfilling lives, meaningful work, and responsible citizenship. If you have questions about your specific assets and potential income or tax savings, please contact us. We would be happy to provide you with a personal illustration and answer any questions you may have about charitable plans that meet your personal and philanthropic objectives.

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HOW YOUR INVESTMENT WILL BE USED

Gifts may be restricted or unrestricted. Unrestricted gifts give Mount Union the flexibility to respond to emerging opportunities and demands and to direct these funds wherever the need is greatest. Restricted gifts are designated by donors for specific projects or programs. Examples include construction or renovation projects, equipment, or endowment in any number of areas.

There is a wide variety of giving vehicles that fall into three categories: • Current gifts that you can see being utilized by Mount Union during your lifetime; • Deferred gifts that you arrange now but are not distributed for Mount Union’s use until after your lifetime; and • Life income gifts that ensure a stream of payments, either fixed or variable, to you for life before the funds are made available for Mount Union’s use.

The University’s Office of Advancement will be happy to provide you with a description of giving opportunities and an indication of current needs. There are a variety of investment naming opportunities available through which we can appropriately honor and recognize you for your outstanding support and loyalty to Mount Union.

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TYPES OF GIFTS CURRENT GIVING Current gifts are especially welcome because they can be used immediately to meet the University’s needs. Such a gift may be made in one year or as a multi-year pledge given over a three-to-five-year period. All such gifts are tax-deductible if you itemize. A gift or pledge may take the form of cash, appreciated property (such as securities or real estate), or any kind of personal property with a marketable value.

Financial support benefits students, faculty, and programs in many essential ways: • Scholarships attract top students and allow them to better concentrate on their studies.

• An enhanced academic curriculum provides theoretical understanding and opportunities for practical application, enabling students to succeed in a dynamic career landscape.

• A strong endowment provides financial stability and attracts top faculty members for excellence in education.

• Capital projects ensure that our students and faculty have the first-rate facilities and cutting-edge technology needed to enhance the educational experience.

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CASH

A cash gift is usually the easiest and most convenient way to make a gift. Mount is able to make use of your cash gift right away with immediate impact. You receive a valuable income tax charitable deduction if you itemize to offset your taxes on this year’s return.

Gifts of cash are deductible up to 60% of your adjusted gross income (AGI). Any excess deduction can be carried over for five years.

SECURITIES

A gift of stocks or bonds may provide you with an even greater tax benefit. If you have owned securities for more than one year and the value has increased, you can avoid capital gains tax and receive a charitable income tax

STOCK TRANSFER INSTRUCTIONS To ensure that the contribution is receipted in an expedient manner and the gift designation is accurately reflected, please communicate the stock transfer request to the Office of Advancement at (330) 823-2286.

Donors can instruct their financial institution to transfer securities electronically via “DTC” to the Mount Union Gifted Account at: Stifel Nicolaus 960 W. State St., Suite 230 Alliance, OH 44601 DTC #0793 For further credit to: The University of Mount Union Gifted Account #4785-7615 Address: 1972 Clark Ave. Attn: Office of University Advancement Alliance, OH 44601 Federal Tax ID #34-0714687

deduction equal to the fair market value of your gift up to 30% of your adjusted gross income with a five-year carry-over for unused deductions.

gross income annual limitation on charitable gifts. Contact your IRA plan administrator to learn their procedure for making a rollover gift to Mount Union.

instances, no gift of real estate encumbered by a mortgage or lien shall be accepted.

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

REAL ESTATE

Selected artwork, rare books, and antiques are examples of personal property that may also make nice gifts to Mount Union. You would be entitled to a charitable deduction for the full market value of the property subject to the 30% ceiling and five-year deduction carry-over for the remainder.

You will be asked to provide a qualified appraisal to submit to the University. To ensure that your gift of personal property qualifies for a favorable charitable tax deduction and that the property has a related use to Mount Union, please contact the Office of Advancement.

If you are 70½ or older, you can receive benefits by making a gift from your IRA account to help support Mount Union. Gifts made from your IRA (up to $100,000 per year) are not reportable as taxable income. They also qualify for your required minimum distribution (RMD), which can lower your taxes. In addition, an IRA rollover gift does not count towards the 60% of your adjusted

A gift of your real estate that has been held for more than a year also has the advantage of providing you with a charitable tax deduction based on the current value of the property while also enabling you to avoid capital gains tax on the sale of your property. The full market value of a gift of real estate is deductible up to 30% of your adjusted gross income. Any amount in excess of the 30% can be carried forward for five years. The donor is responsible for obtaining an appraisal of the property by a qualified appraiser. In most

PERSONAL PROPERTY

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TYPES OF GIFTS PLANNED GIFTS A planned (or deferred) gift is one that is arranged during your lifetime but benefits Mount Union at a future date. Planned giving can provide a number of advantages, such as immediate tax benefits or lower estate taxes. You will also receive the personal satisfaction of making and celebrating a substantial gift during your lifetime. Types of planned gifts include will bequests, charitable trusts, life insurance, retirement assets, and charitable gift annuities.

The goal of planned giving is to help you plan your estate and charitable giving in a way that benefits you, your family, and Mount Union. If you make a planned gift to Mount Union, you will also be honored with a complimentary membership in the Heritage Society, which celebrates and recognizes all those who have made planned gifts to the University. With a planned gift, you can create your legacy, while also investing in the future of Mount Union students.

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GIFTS BY WILL

A bequest is one of the easiest ways for you to make a planned gift.

Many people want to give to Mount but are unable to donate during their lifetime due to covering living expenses or rising healthcare costs. You can retain ownership and use your property during your life while also benefiting Mount in the future. Some of the most transformational gifts in the history of Mount Union have come in the form of a bequest.

Options for your bequest: • A specific dollar amount • A percentage of the estate • Specific assets • Residue of your estate

SAMPLE BEQUEST LANGUAGE 1. Bequest of a Specific Dollar Amount “I hereby give, devise, and bequeath the sum of $ to the University of Mount Union, a nonprofit organization located at 1972 Clark Ave., Alliance, OH 44601, Federal Tax ID #34-0714687.”

2. Bequest of a Percent of the Estate “I hereby give, devise, and bequeath percent ( %) of my total estate, determined as of the date of my death, to the University of Mount Union, a nonprofit organization located at 1972 Clark Ave., Alliance, OH 44601, Federal Tax ID #34-0714687.“ 3. Residual Bequest “I hereby give, devise, and bequeath to the University of Mount Union, a nonprofit organization located at 1972 Clark Ave., Alliance, OH 44601, Federal Tax ID #34-0714687, (ALL OR A PERCENTAGE) of the rest, residue, and remainder of my estate.”

RESTRICTED BEQUESTS

If you are considering a bequest but would like to ensure that your bequest will be used for a specific purpose or program, please include the designation in your bequest language. You may designate your bequest gift to the area of Mount Union that matters most to you, such as endowed scholarships, academic program support, building gifts, athletic programs, experiential learning opportunities, and/or The Mount Union Fund.

The bequest designation could also be unrestricted to be used at the discretion of the Mount Union Board of Trustees for general use and purposes to support the greatest need of the University.

If the gift is restricted, we recommend that your attorney

include the following provision to give the University of Mount Union flexibility should it no longer be possible for us to use your gifts as you originally intended.

Example: If, in the judgment of the Mount Union Board of Trustees, changed circumstances should at some future time render the designated use of this gift no longer appropriate, then the Board shall use the fund or distributions from this fund to further the objectives and purposes of the University of Mount Union, giving consideration to the original intent of this gift.

RETIREMENT ASSETS

You can name Mount Union as a beneficiary of your retirement plan.

By making a gift of your retirement

plan to Mount Union, your estate will receive a 100% charitable deduction, thereby saving estate taxes, and will avoid the income taxes on those assets. In most cases, there is no need to amend your will, thus saving legal fees.

Simply fill out a brief beneficiary designation form provided by your plan or account administrator.

BEQUEST OF AN IRA

A retirement asset like an IRA account makes an excellent bequest to Mount Union. If the IRA was given to your family, much of the value would be depleted through estate and income taxes.

By designating Mount Union as the beneficiary of part or all of your IRA, the full value of the gift is transferred tax-free at your

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passing and your estate receives a charitable deduction. If you wish to leave your IRA to your spouse at your passing, you may also designate Mount as the secondary beneficiary of your account.

Contact your IRA or retirement account custodian to obtain a beneficiary designation form and make a bequest from your IRA.

BEQUEST OF LIFE INSURANCE

As an asset of your estate, an insurance policy is taxable at your passing. However, if the policy is a gift to Mount Union, your estate avoids paying tax on the value of the policy and receives a charitable deduction for the gift.

The gift of life insurance can be made by simply naming Mount Union as the beneficiary of your policy. You may generally name anyone as beneficiary of your insurance policy and change your designation at any time. Your life insurance proceeds will help further our mission, and your estate will benefit from an estate tax charitable deduction based on the value of the proceeds paid.

BENEFICIARY DESIGNATIONS

In addition to “traditional” bequests made through your will or trust, you can use beneficiary designations to support Mount Union. You can leave all or a portion of your account by designating Mount Union as the payable on death (POD) or transferable on death (TOD) beneficiary. It is typically easier to make a gift by completing a beneficiary designation form provided by your account administrator of your mutual funds, securities, checking or savings, or

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CD account than it is to visit your attorney and update your will.

LIFE INCOME GIFTS

Many of our friends are seeking ways to supplement their retirement income. Charitable life income plans, such as the charitable gift annuity and the charitable remainder trust, are two excellent options worth considering.

• Life income gifts take a cash or a low-income-producing asset and convert it into lifetime payments.

• You will receive a charitable income tax deduction and can avoid all or a portion of the capital gains tax.

• Mount Union will use the remaining value to continue our important work.

CHARITABLE GIFT ANNUITY (CGA)

A charitable gift annuity is a contract between you and Mount Union. In exchange for a gift of cash or securities, Mount Union agrees to make fixed payments for life to you or you and your spouse.

Each payment will be fixed and the amount of each payment will depend upon the age of the person who receives the payments. After all payments have been made, Mount Union will receive the remaining value of your gift.

The benefits of a CGA are that your payments are fixed as of the date of your gift. This means that your payments will never change, even if interest rates or the stock market changes. Depending upon your gift, you may receive the added benefit of mostly tax-free payments. You will also receive a charitable deduction in the year

that you set up the gift annuity.

Contact the Office of Advancement for your personal rate.

Example: Mr. and Mrs. Robert G. have $30,000 in CDs (certificates of deposits), which are not producing the rate of return that they once did years ago. At age 75, the couple’s annuity rate is 5%. By creating a charitable gift annuity and transferring the $30,000 to Mount Union, they support their alma mater while receiving a fixed annual payment of $1,500 (partially tax-free) and a current income tax deduction of $12,226. After all payments have been made for both of their lives, Mount Union will benefit from the remainder of the gift.

DEFERRED CHARITABLE GIFT ANNUITY

A deferred charitable gift annuity is most attractive to persons who do not need current income but would prefer a larger annuity payment at a future date. This allows middleaged donors to make a gift while they have high current income.

They receive a current income tax deduction, and the assets in the annuity accumulate tax-free until the annuity payments begin – a year agreed upon when the annuity is entered into, such as retirement age. Since the annuity payment starts at a time in the future, the annuity rate will be substantially higher due to the period of deferral.

Example: Dr. William B. is 55 years old and an alumnus of Mount Union. He would like to donate appreciated stock of $40,000 (with a cost basis of $10,000) to establish a deferred charitable gift annuity. The capital gains tax is avoided in part on the appreciated property. Dr. B. will

BENEFICIARY DESIGNATION BENEFITS The benefits of making a gift to Mount Union through a beneficiary designation include: • Avoid Probate The assets you give away will not go through the costly and timeconsuming probate process.

• Tax Savings If you have a taxable estate, your estate will receive a charitable deduction, saving estate taxes, and will avoid income taxes on certain assets such as retirement plans and annuities.

• Revocable Beneficiary designations are revocable and can be modified at any time during your lifetime.

• Easy To Do Simply fill out a brief form provided by your account administrator.

receive a total tax deduction of $15,740 in the year the annuity is established, which will save him $3,778 in income taxes. When Dr. B. retires in 10 years, he will receive a fixed annual annuity payment of $2,560 (partially taxfree) at the rate of 6.4% for the remainder of his life.

CHARITABLE REMAINDER TRUST (CRT)

The most versatile charitable giving tool, the charitable remainder trust, can help you avoid capital gains tax on the sale of appreciated assets, generate regular increased income for you, provide you with a charitable income tax deduction,

and fulfill your philanthropic objectives. In addition, a charitable remainder trust can make payments to your heirs for their lives or a term of years.

There are two common types of CRTs – annuity trusts and unitrusts.

Annuity Trust An annuity trust pays a fixed dollar amount to the income beneficiaries.

Unitrust A unitrust pays a fixed percentage of the value of the trust, as recalculated annually, to the income beneficiaries. Your CRT will be invested to produce and take advantage of investment growth opportunities that help counteract the effects of inflation.

Additional contributions can be

made at any time to enlarge the trust value.

Example: John M. had a successful business career and credits the excellent preparation he received at Mount Union. Mr. M., who is 65 years old, purchased stocks 20 years ago for $50,000. Today, those securities are worth $200,000. By creating a trust and transferring the securities to Mount Union, he will receive 5% of the trust’s value each year ($10,000 in the year the gift is made), receive a current charitable tax deduction of $90,034, and may avoid $28,200 in tax on the $150,000 capital gain (18.80% of $150,000). Future annual income could be higher or lower depending on the annual market value of the trust.

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GIVING OVERVIEW GENERAL INFORMATION This booklet provides a brief overview of the numerous ways to invest in the University of Mount Union and its students. It is important for you to choose the giving plan that best fits you and your financial situation. An attorney, accountant, or other financial advisor should be consulted to determine what plan is best for you.

Please make note that many companies support employees’ philanthropic endeavors through a matching gift program. Your employer may be able to double or even triple your contribution with a matching gift. Check with the Office of Advancement or your company’s personnel office for more details.

Thank you for your thoughtful consideration of investing in the University of Mount Union and its students! It will be a privilege to work with you in creating a legacy for you and your family. We are grateful for your foresight and welcome the opportunity to thank you and count you among those who are influencing Mount Union’s future.

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POINTS TO CONSIDER

• Gifts of appreciated assets can often be a better vehicle than cash because of specific tax advantages.

• Many companies have matching gift programs through which your gift may be leveraged.

• Pledges can be made in one year or over a two-to-five-year period.

• Planned gifts can be unrestricted or restricted to a capital/building project, endowment, academic or athletic program, or The Mount Union Fund.

• Members of the Office of Advancement will assist you and your financial advisor in designing a gift and gift plan that will suit your philanthropic desires and financial situation.

GIFT PLANNING WORKSHEET

This document is to assist alumni and friends in planning gifts to Mount Union. It is a simple tool for beginning a conversation about your wishes for a possible investment. For assistance or information, call the Mount Union Office of Advancement.

The Mount Union Fund/Annual Giving – Gifts to support the current operations of the University provide important flexibility in the budget. Such gifts can be accepted and quickly returned to our students where the support is needed most, including scholarships and financial aid, technology enhancements, library resources and research tools, study abroad experiences, cocurricular activities, and other critical needs as they arise (fiscal year: July 1 – June 30).

Year 1

$

Year 2

$

Year 3

$

Year 4

$

Year 5

$

Mount Union Fund/Annual Giving Total $

Capital – Gifts to a capital/building project.

Year 1

$

Year 2

$

Year 3

$

Year 4

$

Year 5

$

Capital/Building Total $

Endowment – Gifts to establish an endowed fund to provide support in perpetuity as discussed with advancement staff. q Establishing an endowed chair (gift of $1,500,000 or more) q Establishing an endowed professorship (gift of $500,000 or more) q Establishing an endowed scholarship or program (gift of $25,000 or more) Year 1

$

Year 2

$

Year 3

$

Year 4

$

Year 5

$

Endowment Total $

Planned Giving – Gifts made through a life income agreement and/or other estate mechanism to provide future gifts to Mount. q q q q q q

Mount Union as part of my/our will or revocable living trust bequest Charitable remainder trusts Charitable gift annuities Mount Union as a beneficiary of an IRA or retirement funds Mount Union as a beneficiary of life insurance proceeds Retaining a life estate with real-estate property

Estimated Planned Gift Total $ Grand Total of Potential Gifts to Mount Union $

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THE DONOR BILL OF RIGHTS Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of the general public and that donors and prospective donors can have full confidence in the not-for-profit organizations and causes they are asked to support, we declare that all donors have these rights: • To be informed of the organization’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.

• To be informed of the identity of those serving on the organization’s governing board and to expect the board to exercise prudent judgment in its stewardship responsibilities.

• To have access to the organization’s most recent financial statements.

• To be assured their gifts will be used for the purposes for which they were given.

• To receive appropriate acknowledgment and recognition.

• To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.

• To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.

• To be informed whether those seeking donations are volunteers, employees of the organization, or hired solicitors.

• To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.

• To feel free to ask questions when making a donation and to receive prompt, truthful, and forthright answers.

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Developed by the Association of Fundraising Professionals, Association for Healthcare Philanthropy, Council for Advancement and Support of Education, and The Giving Institute

DONOR RECOGNITION SOCIETIES The University of Mount Union offers a number of honor societies that recognize alumni and friends whose support helps maintain the University’s tradition of excellence. We are truly grateful for each gift that supports Mount Union and its students.

Heritage Society The Heritage Society was established by the Board of Trustees in 1989 to recognize those who have expressed their commitment to the future of Mount through planned gifts or estate commitments.

This special group of forwardthinkers are partnering with Mount to plan their legacy for the University’s future. Planned gifts include will bequests, charitable trusts, charitable gift annuities, life insurance, and retirement asset allocations.

Forever Mount Society Established in 2012, the Forever Mount Society recognizes committed donors who have made gifts to the University of Mount Union for 25 years or more. Loyal donors give the University the strong, consistent base of support needed to pursue excellence in education. Participation in the Forever Mount Society signifies being part of a special community of faithful investors dedicated to shaping the future of Mount Union.

1846 Society The 1846 Society is the pinnacle of annual giving recognition. Membership in the 1846 Society is achieved by donors who contribute $1,250 or more to the Mount Union Fund during the fiscal year (July 1- June 30). Members, through their annual support, become essential partners in the University’s mission to prepare students for fulfilling lives, meaningful work, and responsible citizenship.

FOR MORE INFORMATION: Office of Advancement, 1972 Clark Ave., Alliance, OH 44601 (800) 992-6682, (330) 823-2286 advancement@mountunion.edu, www.mountuniongift.org