The Joy of Giving with Sallie Greenfield

Moravian Ministries Foundation in America (MMFA) will help you maximize the impact of your charitable giving across all the Moravian ministries, agencies and congregations you choose to support. We also help optimize your tax benefits, and personal goals/mission.

We can also help you plan your gifts and organize your charitable giving through various tools of philanthropy in the following ways:

Donor Advised Funds

MMFA serves as the sponsoring charity for the Moravian Donor Advised Fund (DAF). A DAF is created by a donor or group of donors via an irrevocable gift to a public charity where the donor or grant advisors retain the privilege of making grant recommendations over time.

Donors are eligible for an immediate charitable income tax deduction upon funding their account, based upon the tax rules for gifts to a public charity. MMFA invests the funds and handles administrative matters for individual accounts, including but not limited to check writing, charity due diligence and verification, statement production, and all gift acknowledgments.

Individuals, families, companies, foundations, and other entities can start a DAF account by contributing assets.

Your DAF can have successors and become a perpetual fund after your passing. Or the balance can become a direct gift to one or more named charities. MMFA offers four different investment pools with a blend of mutual funds.

MMFA will consider any asset, including privately-held stock, real estate, restricted/controlled stock, tangible personal property, or even transfer of an existing DAF as source funding.

Unless you specifically restrict it, anyone can make donations to a DAF account.

It is a great tool for weddings, Christmas gifts, memorials, etc.

Click here to read a very personal blog post from our very own president Chris Spaugh about how setting up a DAF helped Chris and his family see hope amidst sadness.

To read our brochure, click here.

Giving Different Types of Assets

Gifts of Stocks and Bond

A gift of your securities, including your stocks or bonds, is an easy way for you to make a gift. By making a gift of your appreciated securities, you can avoid paying capital gains tax that would otherwise be due if you sold these assets. Click Here to learn more about Giving With Stocks.

Gifts of Real Estate

A gift of your real property (such as your home, vacation property, vacant land, farmland or ranch or commercial property) can make a great gift. If you own appreciated real property, you can avoid paying capital gains tax by gifting it to us for your Moravian church or a Moravian agency. Click Here to learn more about Gifts of Real Estate.

Gifts of Retirement Assets

A gift of your retirement assets, such as a gift from your IRA, 401k, 403b, pension or other tax deferred plan, is an excellent way to make a gift and further the work of the Moravian Church.

Gifts of Insurance

A gift of your life insurance policy is an excellent way to support the Moravian Church. If your life insurance policy is no longer needed or will no longer benefit your survivors, consider making a gift and helping further your church’s ministry.

To read our brochure, click here.

Trusts

There are several people and terms that you should know about to understand how trusts work. Let’s examine the different people or terms that will be useful in setting up and operating a trust for children.

  • Trustee
    A trustee will be charged with managing the property under the terms of a trust document. The three choices for trustee are a bank or trust company, a private trustee or a charitable trustee for a trust that benefits charity.

     

    A trustee has a particular name—a fiduciary. This means that the trustee is required under state law to provide appropriate management of the trust. Based on the trust document that you sign as the trust grantor, the trustee will do his or her best to follow your intent.

  • Property
    The trust exists to hold and manage property. While in many states a trust is legally in existence after you sign the trust document, it doesn’t actually have any purpose until it receives property. Your trustee refers to this as the “funding” of the trust. The trustee will manage the property according to the terms of your trust document.
  • Investments
    Under state law, your trustee is required to follow the standards of a prudent investor. In most cases, the trustee will invest in a portfolio of stocks and bonds. Approximately 50% to 60% of the typical trust portfolio is invested in a diversified group of stocks, with the balance invested in bonds.

     

    Under the prudent investor rules, the trustee is obligated to diversify. Through diversification, the risk of loss will be reduced and the probability that the trust will function as you intend is greater.

  • Income
    Income is defined under the law as either ordinary income or capital gain. The interest from bonds and mortgage notes is ordinary income. Historically, trusts have paid out their ordinary income. However, because many trustees now have more than half of the trust property invested in stocks, trusts now may pay out a portion of recognized capital gain as income.
  • Capital Gain
    Capital gain is the other type of earnings of a trust. While a portion of the capital gain represents principal and will be retained in the trust to benefit the remainder recipient, part of the gain under modern investment strategies is typically allocated to income. The trustee will look at the trust document to determine who will receive the income. Normally, the trustee will pay out on a quarterly basis the ordinary income and part of the recognized capital gains.
  • Remainder
    Under the trust document, the trust will pay income for a period of time, such as a life of a person or a term of years. After all of the income payments have been completed, the trust principal or remainder is usually transferred to the beneficiaries.

     

    For example, a trust was funded with $300,000 and paid income to children Billy, Susie and Linda until they were age 30. At that time, the trust remainder value of $300,000 was divided between the three children. Because each received one-third of the remainder, the inheritance amount for each child was $100,000.

Charitable Remainder Trusts

Charitable Remainder Trusts (CRT) provide you or your named beneficiary with a lifetime of income and financial security. You also make a charitable gift of the remaining principal to one or more of the Moravian causes you care about at the end of the trust term.

With a CRT, you transfer cash, appreciated assets, or other property to a special trust that is invested to generate income for you or other beneficiaries.

The trust will sell the donated assets tax-free and reinvest the funds to produce income.

You can avoid the immediate capital gains tax on the sale of your appreciated assets (i.e. stock and real estate) by transferring these assets to a CRT prior to sale. The trust will sell your assets tax-free and reinvest the funds to produce income.

When you create a CRT during your lifetime, you will be eligible to receive a charitable income tax deduction for the present value of the remainder portion of your gift to charity. If you establish a CRT as part of your estate plan, your estate may benefit from estate tax savings after you enter the more immediate presence of the Lord.

Charitable Remainder Trusts are irrevocable. This means the funding assets cannot be returned to the donor after they are transferred to the trust. You can, however, retain certain rights through the trust document.

Benefits

  • Receive income or a set percentage for a term of years or over life
  • Potential to increase your retirement income and financial security with growth in the trust
  • Bypass the immediate capital gains and resulting taxes on the sale of the gift of an appreciated asset
  • Qualify for a charitable income tax deduction
  • Make a significant future legacy gift to your favorite Moravian ministry or ministries

To read our brochure, click here.

Two different types of CRTs

Charitable Remainder Annuity Trusts (CRATs or annuity trust) and Charitable Remainder Unitrusts (CRUTs or unitrust).

Both kinds of trusts require a minimum trust payout of 5%. The CRAT and the CRUT differ, however, as to the payout amounts to the income beneficiaries. An annuity trust pays a fixed amount each year based on the date the trust is funded. The unitrust payout amount varies from year to year and is based on a fixed percentage of the trust assets each year. With the unitrust, if the trust grows in value over time, the amount of your payments will grow.

Once a unitrust is established, additional contributions can be made to the trust. For example, a unitrust may be established during life with a gift of stock and then further funded through your estate or at different times during your lifetime. Additional contributions cannot be made to an annuity trust.

Unitrust Options

Another difference between a charitable remainder unitrust and an annuity trust is the different unitrust payout options. All annuity trusts make the same fixed payment every year. There are, however, four types of unitrusts:

  1. Standard: A standard unitrust pays a fixed percentage of the trust assets valued each year.
  2. Net Income Plus Make-Up (NIMCRUT): A NIMCRUT pays the lesser of the unitrust’s payout percentage or the trust’s income earned during the year. If there is a deficit in any year, income in future years in excess of the selected payout percentage may be paid as “make-up” income.
  3. Net Income Only: This trust pays out the lesser of the trust’s payout percentage or the trust’s income, but there is no option for making up deficits.
  4. Flip Unitrust: This trust begins as a net income only or a net income plus make-up trust, but has the ability to convert to a standard trust upon the occurrence of a triggering event (i.e. a fixed date, sale of property, birth, death)

Tax Consequences

Income Taxation: If set up during life, a CRT can provide a charitable income tax deduction equal to the present value of the remainder interest passing to your designated beneficiary.

  1. Gift Taxation: If you set up a trust for someone else, there may be a taxable gift. However, there will be no immediate gift tax consequences if you retain a testamentary power of revocation over the individual’s income interest or if the gift is passing to a spouse, which will qualify for the unlimited marital deduction.
  2. Estate Taxation: If you set up a trust for someone else and retain a testamentary power to revoke their interest, then the present value of that interest is included in your gross estate for estate tax purposes once you have entered into the more immediate presence of our Lord.
  3. Generation-Skipping Transfer Tax: If payouts are made to a skip generation, such as grandchildren, then there may be generation-skipping transfer tax due.
  4. Payments from a CRT to the beneficiaries are taxed according to a tier system based on the nature of the actual distributions (Income is taxed first followed by short-term capital gains and long-term capital gains. The following two tiers are tax free: tax fee income (muni-bonds) and return of capital (principal distributions).

Donor Stories

Learn how others have made an impact through their acts of giving to Moravian churches and agencies. Explore the many benefits of charitable gift planning.

Outright Gifts

Your outright gifts can immediately impact ministry and optimize your deduction for the current year. Or make a sustained mark on ministry with your outright gifts. Either way, Moravian Ministries Foundation in America (MMFA) can make it easy by facilitating stock donations to your favorite Moravian congregations, missions, ministries and causes. We will sell the gift and put the proceeds to work.

MMFA provides its service free of charge and adds nothing to the Charles Schwab trade fee.

Perpetual Funds

“The goal isn’t to live forever; the goal is to create something that will.” – Chuck Palahniuk.

Perpetual funds can help you leave a legacy that supports your favorite Moravian congregations, missions, ministries and causes both now and until He comes.

  • You can use assets of any type to create a perpetual fund.
  • The Moravian Ministries Foundation in America can also work with you to establish spending policy so a fixed percentage of total return is available to the recipients each year.
  • We’ll also help you establish trustee administration, discretion, and contingency guidelines to express your intentions even in a changing world.

To read our brochure, click here.

Gift Annuities

Charitable gift annuities provide a way to support the Moravian ministries and organizations that you care about. You make a gift of cash, securities or other appreciated property through the Moravian Ministries Foundation in America. In return, we issue a gift annuity contract. We will make payments for life to you, you and another beneficiary jointly, or another beneficiary solo. Each payment will be a fixed amount based on the initial annuity calculation as of the date when payments start. Gift annuity payment rates are set by the American Council on Gift Annuities and factor in life expectancy, time value of money, and investment returns into the actual payment rate. After all lifetime payments have been made to the beneficiaries, the Moravian ministry or organization you designated will receive the remaining balance of your gift.

  • Your payments are fixed as of the date your gift. This means that your payments will never change, even if interest rates or the stock market changes. Depending upon your gift, you may receive the added benefit of mostly tax-free payments. You will qualify for a charitable income tax deduction in the year that you set up the gift annuity.
  • A charitable gift annuity produces ordinary income that will be taxed at your normal income tax rate. However, if your gift is appreciated property, a portion of your payments will be taxed at the lower capital gains tax rate. A portion of your payments could even be tax-free if you make a gift of cash or appreciated property. Each case is unique.
    Gift annuities are not trusts, but contracts between you and the Moravian Ministries Foundation in America.

To read our brochure, click here.

End-of-Life Gifts

Most of us support our church and our favorite Moravian ministries regularly during life, so why wouldn’t we do the same when we pass into the more immediate presence of our Lord?

How do you do that?

Make Sure You Have a Will

While almost all of the reasons for procrastinating are understandable, none will serve to lessen the reality that the absence of a will can have a devastating impact on an estate and the family left to clean up the pieces.
Here is a look at what constitutes a valid will that can stand up under the probate process:

  • A will must be signed by a person of legal age. In most states, this is age 18.
  • The document must be the product of a person with full capacity to state their will.
  • The document must have been created with full intent of taking effect at death.
  • A will must be signed free of fraud, undue influence, duress or coercion.
  • Most states require that the will be signed in front of witnesses.

These simple steps are all that is required to constitute a valid will. It is recommended that individuals consult their attorneys to guard against anything that might delay the process of probating an estate. Your will is your opportunity to carefully articulate your wishes, your values, and your legacy.

For more information, click here.

Create Your Own Legacy

There are a number of ways you can include your church and other Moravian ministries and organizations in your plan to create a legacy to be remembered.

One of the easiest ways to fulfill your charitable goals and help continue our work is through an outright bequest. Your attorney can draft language making a gift through us of a specific asset, percentage of your estate, or the residue (what’s left after specific bequests are made to your family). Your estate qualifies for a charitable deduction for the gift.

Similarly, you can create a perpetual fund with MMFA that pays a fixed percentage or set amount to your favorite causes into perpetuity under your name and you simply name your fund in your will.

Another option is to create a tax-deductible split-interest gift, which will provide lifetime income to a family member or friend. Examples of these include gift annuities, charitable remainder trusts, etc. For additional information on planning options, please contact us. We look forward to helping you create your legacy!

Making a Legacy Gift to Charity

In considering your plans for the future, you may not only be thinking about how to help your family and save on estate taxes, but also how you might benefit one or more charitable organizations. A legacy gift permits you to leave a lasting impact and often provides valuable tax savings.

A charitable gift is one of the easiest gifts to make. You can create a bequest of any dollar amount, gift specific property, or designate a percentage of your estate in your will or perpetual fund. If you wish to make a gift of your IRA or 401(k) plan, this can usually be done by filling out a beneficiary designation form provided by your plan administrator.

FREE! Wills Planning Guide

Using the Guide to Planning Your Will & Trust, you can organize what you own and state who you intend to benefit. Once your guide is completed, we encourage you to visit with your advisor to finalize your plan. Please call or email us for your FREE copy.

Giving Legacy a Voice

Every year the vast majority of Americans who pass away do so without having prepared a valid last will and testament.

Approximately 65% of Americans do not have a will.

This statistic is especially astounding since state and federal laws provide some significant incentives for the preparation of a will. These incentives are designed to make it easy for very personal wishes to be known and followed – wishes that deal with child custody, property distribution, and a legacy of values. Not to mention the fact that, in many cases, a carefully planned will serves to actually minimize costs related to settling an estate.