Ways to make major and planned gifts in support of St. John Providence Health System
The following items briefly describe various planning tolls frequently used by donors to make charitable gifts:
Cash – Cash is a preferred form of payment for pledges and donors are encouraged to make pledges in support of capital campaigns. Pledging a gift over a five-year period may allow for a more substantial gift and the most beneficial tax treatment.
Marketable Securities – Marketable securities may be donated instead of cash. If the securities have appreciated, donors not only receive the benefit of the full fair market value as a charitable income tax deduction, but they also avoid the capital gains tax if the securities have been owned for more than one year.
Bequests – Gifts made through wills and trusts. Bequests can be made as a specific dollar amount, a percentage of the total estate, or a percentage of the residue of the estate.
Bequests can be made to any of the following Foundations for use at a specific hospital or medical center within the St. John Providence Health System:
“St. John Hospital Foundation, located in Detroit, MI,” can be designated to receive gifts for St. John Hospital and Medical Center, St. John Macomb-Oakland Hospital (Macomb and Oakland Centers) and St. John River District Hospital.
“Providence Health Foundation, located in Southfield, MI,” can be designated to receive gifts for Providence Hospital in Southfield, Providence Park Hospital in Novi, and the Brighton Center for Recovery in Brighton.
Donors are encouraged to restrict their bequest gifts for use within specific program areas or toward areas of greatest capital need (as determined at the time of gift receipt by the respective hospital president).
Real Estate – A donor can contribute a real estate interest outright or retain a life estate in the property. A life estate allows the donor to retain the right to reside at the property for the duration of their lifetime. A retained life estate allows the donor an immediate income tax charitable deduction for the current value of the St. John Providence Health System Foundations’ right to the property at death. An outright donation of real estate held for more than one year entitles donor to claim a charitable income tax deduction for the property’s fair market value, up to 30% of adjusted gross income in the year of the gift. Capital gains and estate taxes are also avoided on donations of real estate to the St. John Providence Health System Foundations.
Note: Gifts of real estate must be reviewed by the administrative officers of the St. John Providence Health System and Foundations prior to gift acceptance. Further, St. John Providence Health System and Foundations reserve the right to decline acceptance of such gifts. Lastly, real estate gifts must be evaluated prior to acceptance by a qualified appraiser at the expense of the donor.
Bank accounts, certificates of deposit, insurance, retirement plans (such as 401k, IRA, pension, profit sharing) are all great options for giving to charity. By designating a charitable beneficiary on these assets, income and estate taxes are avoided.
Life Insurance – Gifts of life insurance can be made by the donor contributing existing policies, or purchasing new policies with the St. John Providence Health System Foundations as owner and beneficiary. By designating the St. John Providence Health System as both owner and beneficiary of an existing policy the donor receives an income tax deduction equal to the policy’s fair market value or the net policy premiums the donor has paid, whichever is less. Payments to the St. John Providence Health System Foundations in support of premiums due on a policy will allow the donor a tax deduction for the payment. Donors also benefit from transferring life insurance to benefit the St. John Providence Health System Foundations by removing the asset from their estates and thus avoiding potential estate tax liability.
Retirement Plan Assets – While retirement plan assets provide for a financially secure future, at death, such accounts are often subject to both income and estate taxes. These taxes can be avoided by listing one of the St. John Providence Health System Foundations as beneficiary of a specific amount, a percentage or the remainder of your retirement assets. You can establish a gift of retirement plan assets by simply completing a beneficiary form provided by your retirement plan administrator.
Gifts That Provide Income:
Charitable Gift Annuities – A charitable gift annuity provides the donor and/or another individual, such as a spouse, with a guaranteed income stream for life or a term of years. Charitable gift annuities pay at higher rates for more senior individuals and provide immediate income tax deductions for the gift portion of the contract. At the end of the lifetime of the income beneficiaries (or term of years), the remainder is transferred in support of St. John Providence Health System Foundations. The minimum required contribution to establish a charitable gift annuity is $10,000, and the donor/income beneficiaries must be age 65 or older, unless a deferred gift annuity is established.
Charitable Remainder Trusts – An irrevocable trust that benefits the donor and/or other individuals named for their lifetimes, or for a term of years. Charitable Remainder Trusts provide donors or the other individuals named with income. Upon termination at the end of the income recipient’s life, or after a term of years, the remaining assets pass to benefit the St. John Providence Health System Foundations. The two basic forms of charitable remainder trusts include the annuity trust and the unitrust. Annuity trusts provide donors with income as a fixed dollar amount or percentage, and unitrusts provide donors with an amount of income equal to a fixed percentage of the net fair market value of the trust assets as recalculated yearly. Charitable Remainder Trusts are of particular benefit to donors who intend to transfer $250,000 or more into the trust, and who may benefit from the charitable income tax deduction, and avoidance of capital gains tax on appreciated assets transferred into the trust.
Charitable Lead Trusts – Charitable lead trusts can be considered the opposite of the Charitable Remainder Trusts as the income will be provided to one of the St. John Providence Health System Foundations for a term of years, and the remainder will be transferred to the individuals named by the donor. Charitable Lead Trusts are useful planning tools and are typically established by individuals who wish to benefit the St. John Providence Health System Foundations, and pass assets to their heirs at significantly reduced or eliminated gift and estate taxes.
Donor Recognition: The Legacy Society
The Legacy Society honors donors who demonstrate their deep commitment to the St. John Providence Health System Foundations by including our hospitals, programs or medical centers within their estate plans. Legacy gifts are recognized during a donor’s lifetime and can be in the form of a charitable bequest or other planned gift arrangement. A planned gift of any amount qualifies donors for membership.
For more information:
If you would like to receive additional information (free and at no obligation), or if you have already included St. John Providence Health System within a planned gift arrangement and wish to become a member of the Legacy Society, please contact:
Lawrence Ghannam, JD
Planned Gifts Director
Disclaimer: Neither the St. John Providence Health System, Foundations, board members, officers or employees, are engaged in rendering legal or tax advice. Prospective donors should consult their independent legal counsel and financial advisors when considering a charitable gift.