Lake Superior State University
 

LSSU Gift Acceptance Policy

Gift Reporting “It shall be the responsibility of the University in coordination with the Foundation to initiate the preparation of all public statements about gifts from the Foundation to the institution or any units thereof. Coordination shall also include the unit designated in a restricted gift.” - Agreement 2.3.10

It is the policy of this Foundation to maintain the confidentially of donor records and obey donor wishes with regards to any public recognition of their gifts.

This Foundation will comply with any required reporting or disclosure pertaining to its activities as required by law or regulations.

The financial activity of the Foundation will be reviewed annually by an independent certified public accounting firm in accordance to United States and the State of Michigan laws and regulations. This firm will report to the board in writing using current and commonly accepted accounting standards for non-profit organizations. These audits should comply with standards established by the Financial Accounting Standards Board of the Financial Accounting Foundation for non-profit organizations.

The Foundation may use accepted industry standards when gift reporting. The Council For Advancement And Support of Education Management Reporting Standards: Standards for Annual Giving and Campaigns in Educational Fund Raising dated February 1996 or it successor may be used as a guide to reporting to the Board. Any guidelines established by

  • the Council for Aid to Education
  • National Committee on Planned Giving
  • American Council on Gift Annuities
  • Association of Fundraising Professionals

    • and other professional financial or philanthropic organizations may also be used.

    Financial and gift reporting to the Board should be done in a format which provides ease of use yet detailed enough information for Directors to fulfill their fiduciary responsibilities. Reports should be clear as to gifts and expectancies, goals for various appeals, and income and expense reporting. All gift information reported to the Board will be considered confidential unless otherwise specified by law.     Glossary of Planned Giving Terminology The following are general definitions of planned gifts. LSSU is listed here only as an example:
    1. Gifts of Securities, Bonds, Real Estate, Real and Personal Property

      Federal tax laws encourage gifts of securities, real estate, real and personal property to LSSU by permitting many donors to take a charitable contribution deduction for a gift in support of LSSU. The donor therefore gives LSSU the full dollar value of the gift in support of its mission and simultaneously removes the amount of the gift from being taxed at the donor's top income tax bracket.

    2. Gifts of Closely-Held Stock

      Donors may make gifts of closely held stock to LSSU and receive a charitable contribution deduction for the value of the stock.

    3. Gifts of Undivided Interest

      Donors may make gifts of a percentage interest of their entire interest in real and personal property. Federal tax laws encourage gifts of undivided interests by granting the donor a current income tax deduction for the gift, and therefore, the donor makes a gift in support of LSSU and simultaneously removed the amount of the gift from being taxed at the donor's top tax bracket.

    4. Charitable Remainder Unitrust

      The donor during his lifetime irrevocably transfers money, securities or real estate to a trustee (a bank or LSSU itself) who pays the donor income for life. The trust can also provide income for donor's survivor (a wife or others) for life, and the trust assets eventually benefit the charitable organization. During the donor's lifetime all receipts are managed and invested by the trustee as a single fund. The donor cannot borrow or otherwise deal with the trust assets

      The donor receives payments based on a fixed percentage of the fair market value of the trust assets valued each year. The fixed percentage must be 5% or greater of the annual fair market value of the trust assets.

      Donor gets a sizable income tax charitable deduction on his income tax return in the year he creates the unitrust. For example, a male, aged 70, funds a 6% unitrust with $100,000. He gets a contribution deduction of approximately $50,000 immediately upon funding.

      The income received by the donor each year is often taxed as ordinary income or capital gain income or can even be tax-free income.

    5. Charitable Remainder Annuity Trust

      The donor during his lifetime irrevocably transfers money or securities to a trustee (a bank or LSSU itself) who pays the donor for life a fixed dollar amount annually. The trust can also provide income for donor's survivor (a spouse) for life or for the lifetime of others. Then the trust assets become the sole property of LSSU.

      The donor determines at the outset the annual fixed dollar amount he wishes to receive. The amount must be at least 5% of the initial value of the assets used to create the trust.

      During donor's lifetime the trust is managed and invested by the trustee as a single fund. The donor cannot borrow or otherwise deal with the trust assets.

      The income received by the donor each year is often taxed as ordinary income or capital gain income and can even be tax-free income.

    6. Bequest in Wills

      1. By making an outright bequest, anything the donor owns can be left to LSSU and will be a deduction from his total estate in determining the federal estate tax. The donor can specify an amount in dollars or percentages, designate articles of property for LSSU, or leave LSSU what remains of his estate after other provisions of his Will have been satisfied.
      2. By establishing a unitrust or annuity trust under the donor's Will which takes effect only at his death and which pays income to a survivor for life or for a term of years.
      3. By establishing a marital trust under the donor's Will which takes effect only at the donor's death and which pays income to the surviving spouse for life, and eventually benefits the charitable organization.
      4. By establishing a Lead Trust under the donor's Will which takes effect only at the donor's death and which pays income to a charitable organization or organizations for a survivor's lifetime or a term of years, and also provides an eventual gift for children, grandchildren, or others.


    7. Pooled Income Fund

      The donor irrevocably transfers a gift of cash or appreciated property to an investment pool of similar gifts made by other donors in return for a life income interest. Each donor receives a proportional share of the income earned by the fund. The donor receives an immediate charitable income tax deduction. Further, the gift also qualifies for an estate tax deduction.

    8. Gifts of Life Insurance

      If a donor, an insured, makes an irrevocable transfer of a life insurance policy to LSSU naming LSSU as owner-beneficiary, the policy's value is a charitable contribution in the year of transfer, and the donor removes the proceeds from his estate for federal estate tax purposes.

      Value, for contribution purposes, is computed as follows:

      1. For Single Premium Policy, which is transferred at time of issue, the single cost is deductible.
      2. For a Paid-Up Policy (whether or not originally issued as a single premium) the deduction is "replacement cost" – that is, what the insurance company would charge on the date of the transfer to issue a similar policy.
      3. For Whole Life Policies on which future payments are payable – the deduction amounts to approximately the cash surrender value of the policy.
      4. For In-Force and New Policies, the annual premium, paid to LSSU, is a charitable contribution and may be a deduction on the donor's income tax return in the year in which it is paid. State regulations governing the deductibility of gifts of life insurance vary. Please seek the advice of your personal legal counsel.

      5. Charitable Gift Annuity

        The donor transfers to LSSU a specific sum of cash, securities or other property. In consideration of this gift LSSU will pay to the donor, or the donor's spouse or to others a guaranteed fixed annual income for life. The annual income LSSU pays (rate of return) is based upon the rates established and accepted by the Committee on Gift Annuities.

      6. Remainder Interest in Donor's Personal Residence

        Donor can give a residence, vacation property, or farm to LSSU, live in it during his lifetime, and still get a charitable deduction. LSSU receives title to donor's home or farm but donor reserves a lifetime interest in the property. The donor then gets a current charitable deduction for the remainder value of the property.

      7. Gift Annuity for Remainder Interest

        Donors may make a gift of their residence or farm or ranch to LSSU and keep the use of the property for their lifetime and also the lifetime of a survivor if they wish, and receive a guaranteed lifetime income. This gift provides significant income and estate tax savings, and also provides a guaranteed lifetime income as well as an eventual charitable gift.

      8. Charitable Lead Trusts

        Donors may make a gift to LSSU in trust and provide that the trustee shall pay an income to LSSU for a fixed period of years and further provide that at the end of the period of years the trustee will transfer the property to children, grandchildren or other specified persons. These gifts produce dramatic gift and estate tax savings, and thus they provide a way to make a gift and also preserve assets for the donor's family and other heirs.

      9. Grantor Lead Trusts

        Donors may make a gift to LSSU in trust and provide that the trustee shall pay an income to LSSU for a fixed term of years, and further provide that the property will return to the donor at the end of the fixed term of years. These gifts provide a way to make future gifts, and receive a generous income tax deduction, and also receive the gift back.

      10. Gifts of Land

        The dramatic increase in land value over the last decade has prompted many property owners to consider the distribution of their forestlands and undeveloped property, through charitable donations, to non-profit entities such as LSSU.


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