Charitable Remainder Annuity Trust Charitable Bequest Charitable Lead Trust Charitable Remainder Unitrust Charitable Gift Annuity Donor-advised Fund Direct Donation Description Donor and/or other beneficiaries receive payments of a fixed amount determined when the trust is established. No additional gifts to the Trust are allowed As a part of a will, a charitable bequest specifies a particular asset, or fixed dollar amount, or percentage of estate, be given to a charitable organization upon donor’s death Assets are placed in trust, charity receives payment, property is eventually returned to the donor, donor’s descendants or other non-charitable beneficiary Donor and/or other beneficiaries receive a fixed percentage of the value of the trust’s assets valued annually. The charity receives remainder of trust at income beneficiary’s death or trust termination In exchange for assets, a charity guarantees to pay a specified life income payment to beneficiaries. The charity receives the remainder at death of the beneficiaries. No additional gifts are allowed Public charity that pools donations with other donors' gifts and invest them; fund makes grants to charitable recipients upon recommendation of donor Cash or property donated to a public charity or community foundation Advantages * Portion of contribution deductible in current year * Annual income for donor or other non-charitable beneficiary * The charity receives remaining assets at income beneficiary death or trust termination *Fixed income each year * Can be for lifetime or for term of years not to exceed 20 years * Trust is normally tax-exempt *Simple part of a will *Revocable at any time *Gives donors access to assets until death *Unlimited tax deduction for the estate *Assets may be passed on to heirs *Generates income for charity during donor’s lifetime or over a specified number of years *Can provide gift, estate and generation-skipping tax advantages *A portion of contribution deductible in current year *Income for the donor or other non-charitable beneficiary *Charity receives remaining assets at income beneficiary’s death or trust termination *Trust is normally tax-exempt *Can be for lifetime or term of years, not to exceed 20 years *Fixed amount of income provided each year for life *part of income is a tax-free return of principal *The charity receives the remaining assets at income beneficiary’s death *A portion of contribution deductible in current year *Contribution usually fully deductible each year *Account can be named *Flexible giving in future years *Can give anonymously *Fees and expenses are low *Consolidated charitable giving *Can establish legacy with successors to account *Immediate benefit to charity *No associated costs *Current income tax deduction normally allowed Disadvantages * Deduction is subject to AGI restrictions * Income to income beneficiary is generally taxable * Must have individual or institutional trustees * Cannot accept additional donations * More complex establish and fees are generally higher than some alternatives *No immediate tax benefit *Bequest must be paid from estate *Probate adds costs, delays, and complexity *Tax treatment is complex *More complex to establish and fees are generally higher than some alternatives *Deduction is subject to AGI restrictions *Income to income beneficiary is generally taxable *More complex to establish and fees are generally higher than some alternatives *Must have individual or institutional trustees *Some CRT’s cannot accept future donations *Charity liability for annuity: if the charity has financial difficulties, the income beneficiary may not receive income *Deduction is subject to AGI restrictions *Transfer of long-term appreciated assets gives rise to tax liability to donor *Deduction is subject to AGI restrictions *Charity’s trustees have final authority over grants *Slightly less flexible that a trust or private foundation *Donor receives no income from assets *Donor needs to research and choose specific charities before year-end *Deduction is subject to AGI restrictions *Some charities are not equipped to accept securities *Donor receives no income from assets General Tax Rules *Current income tax deduction for actuarially determined value of gift ultimately passing on to charity * Estate tax liability reduced * Avoid capital gains tax for gifts of long-term appreciated capital assets *Estate tax deduction for value of donation *Income tax benefits vary depending on type of trust *Estate or gift tax liability may be reduced *Avoid capital gains tax for gifts of long-term appreciated capital assets *Current income tax deduction for actuarially determined value of gift ultimately passing on to charity *Estate tax liability reduced *Avoid capitial gains tax for gifts of long-term appreciated capital assets *Current income tax deduction for actuarially determined value of gift ultimately passing to charity *Estate tax liability reduced *Reduce capital gains tax liability for gifts of long-term appreciated assets *Annuity principal is returned to donor tax-free as portion of each annuity payment over term of the annuity *Income tax deduction for amount of cash donation up to 50% of AGI *Generally, deduction for full market value of long-term property with no capital gains tax paid, up to 30% of AGI *Estate tax liability reduced *Avoid capital gains tax for gifts of long-term appreciated assets *Income tax deduction for amount of cash donation up to 50% of AGI *Generally, deduction for full market value of long-term property with no capital gains tax paid, up to 30% of AGI Estate tax liability reduced Donor Income Yes, Fixed Yes, until death when assets are given to charity No, original asset reverts back to remainder beneficiary, can be donor Yes, Variable Yes, Fixed No No