Donations F.A.Q
Frequently Asked Questions about Planned Giving
1. Can I leave assets to my child, grandchild, or spouse if they are receiving SSI and Medicare?
Yes - you can leave your assets to anyone receiving SSI and Medicare/Medicaid. However, this could disqualify them from receiving future SSI and Medicare/Medicaid benefits.
2. What are the three kinds of gifts that will support Pride, Inc.?
Generally speaking, during your lifetime you can make an outright gift of cash, securities, or other property (e.g. land, real estate, or personal property). Upon your death you can make a gift through your Will or revocable trust, or through a distribution from a retirement plan or life insurance policy. You also have the option of making a gift that returns lifetime payments to you, your spouse, or other individuals, such as a charitable gift annuity or charitable remainder trust.
3. What sort of assets can I use to make a gift?
Almost anything: cash, publicly traded securities, the balance in your retirement account. Other assets can be very valuable but are more complicated to administer and must be reviewed by us before we can accept them as gifts - real estate, closely held stock, and artwork.
4. What tax deduction will I receive for my gift?
It depends on the form your gift takes:
- Outright gifts to Pride, Inc. generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains - a great tax benefit!
- Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to our mission. We can advise you on this point.
- Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however each situation is a little different.
- Similarly, life insurance distributions to Pride, Inc. are not income tax deductible, but are exempt from estate tax
- A life-time gift of an insurance policy to Pride, Inc. generates a deduction for the value of the policy. If you give a policy with premiums still owing, you may also deduct annual gifts that offset our premium payments (for more details on this point, see Question 5 below).
- The charitable deduction for a gift that makes payments to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.
5. Can Pride, Inc. serve as the Executor of my estate?
No - Our internal policies prevent us from taking such a role in your affairs. We will help you find an Executor if you need help.
6. I want to set up a life insurance policy, name Pride, Inc. as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
No. The IRS would not consider that a “completed gift” - they’d say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. Pride, Inc. must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
7. Can I transfer my IRA to Pride, Inc. to set up a life-income gift, and avoid income tax on the transfer?
Under the present law, any lifetime distributions from an IRA are included in your taxable income, even if these funds are transferred to us. You do, however, receive a current charitable deduction when you establish a life income gift, which would partially offset the amount included in your taxable income. Proposed legislation would make the transfer tax-free.
8. I’d like to donate a painting. Will you determine its value for my income tax deduction?
No, we can't. The IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value. The appraisal has to be related to the gift, too - an insurance appraisal won’t suffice. We can assist you on this point.
9. I’m interested in establishing a charitable gift annuity. What financial provisions do you make for the income payments to me and my spouse?
We partner with North Dakota Community Foundation (NDCF) to ensure that your gift is managed most effectively. Once the obligations of payments to you have been fulfilled, we receive the interest from any remainder annually. Your charitable gift annuity will be treated as a general obligation of NDCF backed by all its assets. NDCF is in full compliance with North Dakota provisions regarding non-profits’ offering of gift annuitants, and that ongoing responsibility is a key element in our financial policies.
10. If I create a bequest or life-income gift, will Pride, Inc. continue to ask me for annual contributions?
We will, because the commitments address two different needs. Your planned gift is a significant addition to our long-term financial strength - - our ability to meet the challenges and opportunities the future will bring. The obligations and expenses that we encounter today, however, are met through your annual gift. We are very grateful that you want Pride, Inc. to succeed both today and in the future.