Walk by the entrance to most stores these days, and you’ll hear the
distinctive bell ringing next to a red bucket.
Or look in your mailbox and find those letters from every non-profit
organization that you’ve ever said hello to and now they are asking for a
donation.
You can’t blame them. Like
retailers, non-profits derive a substantial amount of their revenue this time
of year. People don’t think twice about
dropping a few dollars into that bucket, or writing a check for their favorite
cause. I have rung the bell myself
written my share of checks.
What about those guys who do get buildings named after them? Sure they might have been successful in
business, but do people really have millions of dollars lying around just so
they write that 1 big check? I have no
idea.
One way for little guys like me to make a big splash is to use life
insurance. For relatively little cost, a
person can easily make a huge contribution and maybe have that building named
after you!
There’s two basic options:
1.
Name the non-profit as a beneficiary
(either in whole or in part) on your existing policy.
2. Gift an existing policy or get a new
policy on you with the non-profit as the owner and beneficiary. You would pay the premiums to keep the policy
in-force.
There’s different tax and other advantages to both methods, but
both ways are easy to implement. The
bottom line is that either method can make a big splash and a real difference
to that non-profit.
After all dropping in that $5 in the red bucket helps, but giving
an organization a 6 or 7 figure contribution makes a huge difference. How many people or animals would
that help?
Another method works if you are over 70 1/2 with substantial
retirement assets. It is now law allowing up to a $100k contribution each year
directly from your IRA to a qualified charity without having to recognize the
withdrawal as income. This method allows
you to give large amounts in a very simple, tax advantaged way.
As always, consult your own tax and/or financial adviser for your
specific situation.
Happy holidays everyone! And
make those contributions count!
