A gift of securities—such as stocks, mutual funds, and bonds—can provide attractive benefits in some circumstances. An outright gift of long-term, appreciated securities (securities held for more than a year) avoids capital gains taxes and in most cases can provide a substantial benefit to us. For the donor the cost of the gift is the original cost of the security. The donor obtains a charitable income tax deduction equal to the market value of the securities at the time of the gift.
An owner of closely held stock may give the stock to the David Lynch Foundation and receive important financial benefits. Closely held corporations are corporations whose stock is owned by family members and/or business associates. The stock is private in that it is not publicly traded, and in most cases there are restrictions on the transfer of the stock to third parties.
Donors considering a gift of closely held stock must not enter into a prior written agreement with either the closely held corporation or a potential third-party purchaser. The transfer should be an arms-length, independent transaction. Donors should consult with their attorneys or tax advisors to manage these kinds of charitable gifts.
Many employers have a policy that they will match your charitable donation, thereby doubling or tripling your giving to the David Lynch Foundation. Generally, to take advantage of your employer’s gift matching program you should:
- Check with your human resources office to see if your employer offers this benefit
- Complete the company matching gift form they will provide, and return it to us if possible
- Alert the David Lynch Foundation that you are working to secure a matching gift
Some people chose to make a profound difference through generous donations, sometimes made through a bequest in their will. These kinds of gifts create a legacy of helping others and they often provide substantial tax advantages. The easiest, most common planned gift is a simple bequest through your will or living trust. Because it is often family members who are put in a will, we consider a bequest gift one of the highest honors a donor can bestow and we are pleased to recognize those who make bequest gifts of $25,000 and more in our leadership giving society, the David Lynch Foundation Leadership Circle.
You can arrange with your attorney and financial advisor to make a gift from your estate. These professionals can also describe the tax advantages involved in your particular circumstances. Often the gift language reads:
“I give, devise, and bequeath to the David Lynch Foundation for Consciousness-Based Education and World Peace, now or formerly at 1000 North Fourth, Fairfield, IA 52557 [dollar amount, percentage, or __ percent of the rest, residue, and remainder of my estate], to be used for its general purposes.”
The following information is often useful for arranging a bequest gift:
- Legal Name: The David Lynch Foundation for Consciousness-Based Education and World Peace
- Legal Address: 1000 North Fourth, Fairfield, IA 52557
- Nonprofit Status: 501(c)(3) Public Charity, Registered with the NYS Charities Bureau, Registration No. 41-25-08
There are different ways in which you may use life insurance to make a gift to the David Lynch Foundation:
- Make a gift of an existing life insurance policy
- Establish a new policy and name the David Lynch Foundation as the owner and beneficiary of the policy
Many gifts are arranged so that the donor can receive direct financial benefits in ways that are well worth exploring. These benefits include an income for life for the donor and/or the donor's spouse and a charitable income tax deduction, in addition to the positive outcome and good feeling that comes from making a gift to an organization like the David Lynch Foundation. In particular, some of the financial benefits that can come with a life income gift include:
- A stream of income for the lifetime of the donor and/or the donor’s spouse
- A charitable income tax deduction
- An opportunity to establish an endowed fund in the donor’s name or the name of a loved one
- Possible avoidance of capital gains taxes on gifts of appreciated property
- A higher yield than from current investments
- A reduction in federal estate taxes
Your interest in a life income gift could set a powerful example for other donors considering the David Lynch Foundation and we would be pleased to discuss the concept with you. It is important to note that due to the need for financial administration, these kinds of gifts require a minimum donation of $50,000 and the involvement of legal and financial planning advisors.
Sometimes instead of giving money to a charity to buy needed goods, the goods themselves are given. These are called in-kind donations. The David Lynch Foundation accepts in-kind donations of items that can be productively put to work on a caseby-case basis. We are very grateful for all donations—however, the David Lynch Foundation is not always able to accept every gift because of the changing needs of work.
In-kind donations are often tax deductible under IRS rules based on the fair market value, which is the price the items would sell for on the open market. If you wish to deduct your in-kind gift you should refer to IRS Publication 561: Determining the Value of Donated Property. The IRS has special forms for the deduction of gifts valued over $500. For donations valued over $5,000 the donor must seek a qualified appraisal of value. For your reference and convenience you can find Publication 561 and other IRS information and forms at www.irs.gov.
