The Benefits of Giving

A gift of cash to Suffolk University remains the most popular form of giving among alumni and friends of the University. In addition to the intrinsic reward of giving to Suffolk, a cash donation to the University will benefit you at tax time.

Irene D.’s cash gift

When Irene D. was made partner in her law firm, she decided to mark the achievement with a gift to the University that prepared her for her career. She made a cash gift of $10,000 to Suffolk Law School, where she earned her juris doctor. A recipient of a scholarship while in law school, Irene felt it was only fitting that she share her professional success with Suffolk Law.

With this gift of cash, Irene has:

• Earned an income tax deduction of $10,000
• Publicly acknowledged the role Suffolk Law played in her career success
• Granted Suffolk critical funds toward fulfilling its mission

By transferring your appreciated securities to Suffolk, you gain significant tax benefits, often with little or no effect on your spendable income.

John & Jill E.’s appreciated securities gift

John and Jill E. met as Suffolk undergraduates in 1975. With their 25th wedding anniversary approaching, they decided to make a gift to Suffolk of 2,000 shares of stock in X Company. The couple bought the stock a number of years ago at $3 per share. Since then, the stock’s value has increased three fold.

With this gift of appreciated securities, John and Jill E. have:

• Received an immediate $18,000 income tax deduction
• Avoided capital gains tax
• Made an $18,000 donation toward Suffolk University’s mission

When real estate property has been held long term, has appreciated in value, and is readily marketable, it can make an ideal gift to Suffolk University. There are a variety of ways to give real estate. You can make an outright gift of property, transfer the property and continue to live on it, or give the property and retain an income for life.

Joyce and Kevin R.’s gift of real estate

Joyce and Kevin R. earned their MBA degrees from the Sawyer Business School and went on to become successful business owners. They acquired a parcel of commercially zoned property as part of a real estate deal. They held on to the property for several years, during which time it appreciated in value. Joyce and Kevin wanted to make a gift to the Business School, so they transferred ownership of their commercial property to the school.

With this gift of real estate, Joyce and Kevin R. have:

• Received an income tax deduction
• Avoided capital gains tax
• Made a valuable gift to Suffolk University

Donating tangible property to Suffolk can be a unique and meaningful way to support the University. Tangible personal property is defined as property that can be physically touched, including antiques, artwork, and precious gems and metals. Suffolk may use your gift of personal property for others to learn from and appreciate or to enhance its physical surroundings. You may realize a tax savings if your gift has appreciated in value.

Sarah M.’s gift of personal property

Sarah M. traces her appreciation of American history to her undergraduate days at Suffolk. In the years since she earned her BA from the College of Arts & Sciences, Sarah has amassed a collection of rare manuscripts that is valued at $75,000. Having benefited from financial assistance while a student at Suffolk, Sarah felt strongly about giving back to the University. She decided to donate the manuscripts to Suffolk’s Mildred F. Sawyer Library. The manuscripts will become part of the library’s permanent collection.

With this gift, Sarah has:

• Benefited from an income tax deduction of $75,000
• Removed the value of the collection from her estate, thus avoiding estate tax
• Presented the Sawyer Library with a valuable gift that will benefit future generations of Suffolk students

Tax-qualified retirement plans and individual retirement accounts (IRA) make attractive, valuable gifts to Suffolk. When you leave all or a percentage of your retirement assets to the University, it benefits from the full value because the funds will be removed from your estate and therefore will no longer be subject to estate or income taxes that an individual beneficiary would have to pay.

Albert T.’s gift of retirement assets

Albert T. was approaching his 70th birthday. He had $500,000 in his IRA and soon would be obligated to make annual withdrawals. The withdrawals would be taxed as ordinary income. After his lifetime, the remaining funds in Albert’s IRA would be passed down to his children. Albert realized that as a bequest to his children, the balance of funds in the IRA would be significantly reduced because it would be subject to both estate and income taxes.

Albert decided instead to name Suffolk University as the beneficiary of his IRA and to bequeath other assets to his children. By doing so, he protected the IRA from the combined tax hit and left a legacy for his alma mater.

By gifting his retirement assets to Suffolk, Albert has:

• Avoided income taxes on his IRA
• Avoided estate taxes on his IRA
• Left a sizable gift to his alma mater

A gift to Suffolk of closely held stock is similar to that of appreciated, publicly traded securities. You will realize a personal income tax charitable deduction for the fair market value of the stock and avoid capital gains taxes on the appreciation.

Helen T.’s gift of closely held stock

Helen T., the daughter of Haitian immigrants, was a recipient of a scholarship to Suffolk University. After earning an MBA from the Sawyer Business School, Helen went on to launch a successful business. Helen wanted to give back to the University, but her assets were tied up in her company. She made the decision to transfer stock in her company to Suffolk. After the transfer, Helen bought back the stock from Suffolk at the fair market value. As a result, Helen gave Suffolk a significant gift.

With this gift of closely held stock, Helen has:

• Received an income tax deduction for the full fair-market value of the stock
• Avoided capital gains tax on the appreciation of the stock
• Made a significant gift to Suffolk University

The charitable remainder trust enables a person wishing to contribute to the future of Suffolk University to do so while retaining, and often increasing, current income. A donor makes an irrevocable transfer of property, cash, or other assets to a trust. The donor retains a right to receive income from the property in trust or designates another person or persons to receive the income.

The donor receives an income tax charitable deduction in the year of the gift. If the gift is made with appreciated, long-term property, the donor incurs no immediate capital gains tax on the transfer to and the subsequent sale of the assets by the trust. When the trust term ends, the property remaining in the trust becomes a gift to Suffolk University. There are two types of trusts:

• Unitrust: Income fluctuates annually with the fair market value of the trust.
• Annuity Trust: Income payments are fixed and determined when the gift is made.

Jonathan and June R.’s charitable remainder trust

Jonathan and June R. purchased a vacation home on Cape Cod in the early 1970s. They have many fond memories of summers there, but were planning to retire to another part of the country to be closer to their children. They had mixed feelings about leaving New England. Before the move, they wanted to leave something significant behind in the form of a gift to Suffolk, where they both had received their undergraduate degrees.

They decided to transfer their vacation home as a charitable remainder unitrust with Suffolk as the primary residual beneficiary. In exchange, they would receive annual payments of 5 percent of the trust principle, valued at $500,000 at the time of transfer. The gift of real estate appealed to the couple because it allowed them to convert one aspect of their personal history—their vacation home—to benefit another, Suffolk University.

By funding their charitable remainder unitrust with their vacation home, Jonathan and June have:

• Received an income tax deduction
• Avoided capital gains tax
• Earned $25,000 from the trust the first year
• Guaranteed a life income based on the principal of the trust
• Reduced their estate tax
• Made a substantial gift to Suffolk University

A charitable gift annuity is a contract between you and Suffolk University. In exchange for your irrevocable transfer of cash or securities, Suffolk agrees to pay you and/or your spouse a fixed dollar amount annually for life. The size of the payments is based on the age of the beneficiaries—the older the beneficiaries, the larger the payments. A portion of your gift is tax-deductible. In addition, some of the income received will be tax-free. If you use long-term, appreciated securities to purchase the annuity, the capital gains tax reportable from the sale of the securities can be reduced and spread over your life expectancy.

Jay M.’s charitable gift annuity

Jay M., 75, was ready to cash in and reinvest some mutual funds to provide a steady stream of income, but hesitated because the tax on the capital gain would be quite high. Jay, a Suffolk University Law School alumnus, decided to transfer his mutual funds, worth $100,000, to the Law School to endow the Jay M. Centennial Scholarship Fund in exchange for a one-life gift annuity.

This allowed Jay to avoid the capital gains tax on the profit, and to receive annual income of $7,100 from the gift. A portion of each payment to Jay is tax-free, a portion taxed at the capital gain rate, and the balance is taxed at Jay’s ordinary income tax rate.

This gift enabled Jay M. to:

• Increase his cash flow
• Have the security of guaranteeing his payments for life
• Reduce and defer capital gains tax
• Receive an income tax deduction
• Make a generous endowed gift to Suffolk University Law School

A deferred gift annuity works the same way as a charitable gift annuity, except the payments begin at a future date of your choice. Due to the deferral of the payments, you receive a higher immediate income tax deduction as well as higher income payments. This is a wonderful tool to maximize current tax deductions, while postponing income to supplement your retirement income.

Edward and Noreen B.’s deferred gift annuity

Edward and Noreen B. were thinking ahead 15 years to retirement. They had $100,000 invested in Certificates of Deposit (CDs) that were about to mature. Edward and Noreen felt a special attachment to Suffolk University. Edward received his Bachelor of Science in Journalism from the College of Arts & Sciences, and Noreen received her Juris Doctor.

Instead of reinvesting the CDs, they decided to transfer the proceeds to Suffolk University in exchange for a deferred payment gift annuity that would provide them with a fixed income for life when they turn 66. Edward and Noreen will receive annual payments of $11,600 based on the annuity rate of 11.6 percent.

The deferred gift annuity to Suffolk allowed Edward and Noreen to:

• Secure a future income, guaranteed for life
• Receive an income tax deduction today
• Make a meaningful gift to Suffolk University

A pooled income fund is actually a trust, similar to a mutual fund. Your gift is combined with the gifts of others. You make an irrevocable transfer of assets, usually cash or marketable securities, to the fund. In return, you and/or the beneficiaries you name receive a proportionate share of the fund’s earnings for life, paid quarterly.

Income is variable, depending on the fund’s performance, and is taxable to the beneficiaries as ordinary income. You receive an immediate charitable deduction for federal income tax purposes. Appreciated property can be given to the pooled income fund without a resulting capital gain tax. After the lifetime of the last income beneficiary, the principal becomes available to Suffolk.

Benjamin I.’s pooled income fund

Benjamin I. invested $2,000 in Company X many years ago. Over the years, the stock rose in value to $12,000, but lately has averaged only about 2 percent of dividend income each year. Benjamin was considering reinvesting the stock in a higher-yield account, but wanted to avoid paying a capital gains tax. He is a regular cash donor to Suffolk University, where he earned his Executive MBA. As Benjamin approached his 50th birthday, he decided to make a significant contribution to Suffolk.

He transferred his stocks to a pooled income fund with Suffolk, which increased his income from the investment. In addition, he received an immediate tax deduction and realized a savings in capital gains taxes. As the pooled income fund grows, Benjamin’s annual payments from the gift are expected to increase as well.

By making a gift to a pooled income fund, Benjamin I. has:

• Received an immediate income tax deduction in the year of the contribution
• Avoided capital gains tax
• Increased his income
• Made a meaningful gift to Suffolk University

A bequest is a gift made through a provision in your will. A bequest may take many forms, including a percentage of the estate, a specific dollar amount, the residue of an estate, or a combination of the above. A charitable bequest to Suffolk University may provide savings in estate taxes.

Dora L.’s bequest

Dora L. was grateful for the opportunities she received during her lifetime. She credited much of her success to the education she received at Suffolk University. After earning both her undergraduate and graduate degrees from Suffolk, Dora went on to enjoy a long career in public service.

The rewards were many, and when Dora was drafting her will, she decided to leave a portion of her estate to Suffolk University. It seemed fitting that she should redirect the tangible benefits of her education to the institution that started her on her career path.

By including Suffolk University in her will, Dora has:

• Retained her assets during her lifetime
• Freed the value of the bequest from her taxable estate
• Made a lasting and meaningful gift to Suffolk University

Many different kinds of gifts may be arranged using life insurance. The University may be named as a beneficiary of all or a percentage of your life insurance proceeds.