A donor can make a significant contribution to the community without making a large gift today by donating a life insurance policy to the Foundation. Donors can give existing policies that are no longer needed, or establish a new policy with the Foundation as the owner and beneficiary. The proceeds of the gift can create a new endowment fund in the future for causes that are important to the donor.
To make a gifts of a new life insurance policy, a donor can establish a policy and designate the Foundation as the owner and beneficiary. New life insurance policy gifts are especially attractive to younger donors who have other financial commitments today but wish to make a significant gift in the future.
A donor can also give an existing policy. This kind of donation is relatively simple. It is made by signing a change of ownership/beneficiary form supplied by the insurance company. The donor may then claim a charitable deducation for approximately the policy's cash value. The proceeds of the policy are completely removed from his or her estate.
Donors are only required to make contributions to the Foundation in lieu of any premium payments due on the policy. These contributions are tax-deductible.
A donor purchases a life insurance policy on her life and the life of her spouse with a face value of $100,000. She designates the Foundation as the owner and beneficiary. She has specified that the proceeds will create a named endowment fund at the Foundation, with the Jewish Community Federation of the Greater East Bay as the ultimate beneficiary. She makes a contribution to the Foundation in the amount of the premium due, and the Foundation then pays the premium. She takes a tax deduction for the contribution. When the Foundation receives the proceeds, a named PACE fund is established to make annual contributions to the Federation's annual campaign in perpetuity.
At a glance: