by Mike Bourland
American Football Coaches Foundation
Courtesy: AFCA
Release: 05/01/2008
In previous editions of the Extra Point, we discussed various methods of Planned Giving which can assist The American Football Coaches Foundation (the “Foundation”) meet its financial requirements. Planned Giving is the structured and pre-planned way to donate to the Foundation. It is charitable giving through Wills, Living Trusts, life insurance and other advance planning methods. In the last issue of the Extra Point we discussed giving to the Foundation through the Planned Giving technique called Charitable Gift Annuity. In this issue, we will discuss giving to the Foundation through a Charitable Remainder Trust (“CRT”). But before we discuss the CRT Planned Giving technique, let’s again review some of the previously discussed Planned Giving techniques, as well as key aspects of the Foundation, its goals and how it accomplishes its goals.
When a donor names the Foundation as a beneficiary of his Will or Living Trust, property passes to the Foundation at the donor’s death. Because the Foundation is a publicly supported, tax-exempt charity, the estate of the donor receives an estate tax charitable deduction for the value of the property passing to the Foundation at the donor’s death under a
As a contrast to the sophisticated techniques described above, a gift of cash is simple – just write a check and give it to the Foundation. You will receive an income tax charitable deduction limited by 50% of your income, thereby reducing the cost to you of the gift by the income taxes you save through the charitable deduction. Another easy way to make a contribution is by giving the Foundation property that has grown in value since you acquired it. You will normally receive an income tax charitable deduction for the full value (limited by 30% of your income), even though neither you nor the Foundation pays income tax on the property’s appreciation. Therefore, the appreciation is never taxed and the cost to you of the gift is reduced by the taxes saved from the income tax charitable deduction you achieve and the capital gain you avoid.
In regard to the goals of the Foundation, we know the goals are to provide funding for the education of American football coaches to better serve the public through role modeling and character development for young men and young women and the promotion and enhancement of the coaches’ technical skills and coaching capabilities. The American Football Coaches Association (AFCA) is a tax-exempt trade organization. Contributions to the AFCA do not qualify for an income tax charitable deduction to the donor. As previously stated, the Foundation is a publicly supported, tax-exempt charity. Contributions to the Foundation qualify for an income tax and estate tax charitable deduction to the donor. Revenue generation activities of the Foundation should be structured to maintain its advantageous publicly supported tax-exempt charity status.
To meet the requirements of a publicly supported, tax-exempt charity, the Foundation must receive at least one-third (1/3) of its support from a broad range of donors, which includes AFCA member coaches. That is why your annual contributions and membership payment are anticipated and crucial to the success of the Foundation. For every dollar from an AFCA member coach, the Foundation can receive two additional dollars from a larger donor or donor foundation without endangering the Foundation’s favorable publicly supported, tax-exempt status. Because you are now familiar with this rule, you can see how every AFCA member coach’s personal involvement is important to the Foundation’s strategic game plan to solicit and receive contributions from wealthy individuals and their family foundations. With these types of gifts, the Foundation has funds that it can put to work immediately in support of the Foundation’s goals.
The Planned Giving technique to be discussed in this issue of the Extra Point is the
You can create and fund a
A gift through a
As a further reminder, there is still time to acquire a Bench, Plaque, Capstone, Tile or Brick in the Plaza of Influence. The
Please continue to plan and conduct fundraising events in your community, such as banquets and golf tournaments. Proceeds from admissions, sales of merchandise, performance of services, or furnishing of facilities at an event are classified as “gross receipts” funds of the Foundation. Gross receipts funds should target a broad base of the community, as no single person can provide more than 1% of the Foundation’s total support through gross receipts and have it count toward maintaining the Foundation’s favorable tax status. Also, care should be taken so that no fundraising activity becomes an ongoing business to avoid the Foundation having unrelated business taxable income (UBTI) from the activity resulting in income taxation and possible loss of the Foundation’s tax exempt status.
Will you consider making a gift to the Foundation through a CRT or some other Planned Giving Technique? Will you encourage others to do this? Will you continue to plan and conduct fund raising events in your community? Have you acquired (and encouraged others to acquire) a permanent salute in the