What is Planned Giving?
What is a planned gift?
A planned gift is simply the process of making a charitable donation in a manner that can financially benefit both the donor and the institution receiving the gift. The information found on this Web site will give you some basic information about the various types of planned gifts. But it may be helpful to talk to a member of the Library's Development Office, your personal financial advisor, or an attorney to decide what assets to donate, when to make the donation, and where the assets should be transferred.
Why should I make a planned gift?
Private philanthropy has become one of America's most valued traditions. Each year millions of people find creative ways to contribute to their favorite non-profit organizations. The reason for making a gift to the Library of Congress may be different for each donor — to honor a loved one, to support a tradition of excellence or to express gratitude for a service well-performed. Whatever the motivation for your gift, a planned gift can give you the assurance that you are being a good steward of your assets by increasing the benefits for yourself, family members, and the organization receiving the gift.
What are some of my planned giving options?
Planned gifts include outright gifts, bequests, charitable remainder trusts, charitable lead trusts, and matching gift programs:
Gifts
Donations to the Library can be targeted to support any of the continuing programs funded by existing donor funds, include scholarly initiatives, musical concerts, special publications, exhibitions, educational outreach, conferences and symposia, and fellowships. Major donors, in consultation with the Library, may wish to establish a new program immediately with an outright gift and make a provision to endow it later through another planned gift such as a bequest or a Charitable Remainder Trust.
The manner in which you make an outright gift of assets can have a substantial impact on both your own tax liability and the amount the institution receives. For example, if you were considering gifting shares of stock worth $10,000 with a cost basis of $1,000 and sold the stock first, you could create a substantial capital gains tax liability. But transferring stock worth $10,000 directly to the Library offers the possibility of avoiding any tax on the capital gains. You could take a charitable contribution for the full value of the stock and increase the amount the Library realizes from the gift.
Bequests
Over the years, bequests have been the lifeblood of the Library's growing endowment. Many of the Library's current programs started as the idea of someone who could not make a major donation during their lifetime, but were able to make it a reality through a bequest. Working with you and/or your representative, the Library can assist you in drafting language for your will that will ensure that your bequest is used for the purpose you intended and that it merges your philanthropic interests with the Library's needs.
Charitable Remainder Trusts
A charitable remainder trust allows a donor to transfer assets, usually cash or securities, to a trustee of choice such as a bank trust department. During the life of the trust, which may range from a few years or for a lifetime, the trustee invests the assets and provides annual income to the donor or other income beneficiaries the donor names. At the end of the trust's life, the trust's remaining assets pass to the Library of Congress to be used for the purpose defined when the trust was created.
This kind of trust can be set up two ways. The first, called an annuity trust, provides a fixed amount of income each year. The second, called a unitrust, provides a variable amount of income each year based on the annual value of the trust. As a planned gift, a charitable remainder trust gives you the possibility of converting non-income producing assets to income producing assets without creating any taxable capital gains, increasing your current income and taking an immediate charitable tax deduction for assets the Library will receive at some later date.
Charitable Lead Trusts
There are two types of charitable lead trusts: a grantor charitable lead trust and a non-grantor charitable lead trust. The first permits a temporary transfer of assets, usually cash or securities, to a trustee such as a bank trust department. During the life of the trust, usually based on a specific number of years up to 20, the trustee invests the trust's assets and provides an annual income to the Library of Congress to support a particular program or initiative. When the trust ends, its payments to the Library stop and the trust principal — including any accumulated assets — are returned to its owner.
The non-grantor charitable lead trust is the same except the assets are transferred to someone else such as a family member. At the end of the trust, the assets, including any appreciation, are distributed to the family members or other named beneficiaries. As a planned gift, either charitable lead trust allows you to support the Library with income you currently do not need (e.g., investment income not needed during your working years), but which you may need at some later date (e.g., during your retirement).
Matching Gift Programs
By checking with your employer, former employer, or a board you serve on, you may discover that the company or organization will match any contribution you make to the Library of Congress. Many companies offer a matching gift program, including some that will double, triple and in some cases, quadruple your own gift.