A bequest to the Houston Jewish Community Foundation in your will is perhaps the easiest way to ensure the continuity of your charitable giving. A specific dollar gift, a percentage of your estate, or specific asset(s) can be designated as a general bequest to either the Houston Jewish Community Foundation or specifically designated to one of the Jewish Federation of Greater Houston’s various programs or endeavors.

Bequests are deducted from the amount of an estate, which can reduce or eliminate estate taxes. A charitable bequest allows you to retain use and control of your assets during your lifetime. A bequest may also be used to establish an endowment fund.

A bequest can easily be made by naming the Houston Jewish Community Foundation as beneficiary of your will. An outright bequest may be unrestricted, may add to an existing fund of the Foundation, or may establish a designated or restricted fund. If a donor already has a will in place, a simple codicil can be written.

Examples of Bequest Wording
To the Houston Jewish Community Foundation for its general purposes:
Will be contributed as a one-time gift to the General Endowment Fund of the Foundation, which funds emergencies, innovative programs and pilot projects.
I bequeath to Houston Jewish Community Foundation, 5603 S. Brasewood Blvd., Houston, TX 77096 the sum of ___________ dollars ($__________) for its general purposes.

To establish an endowment fund:
I bequeath to Houston Jewish Community Foundation, 5603 S. Brasewood Blvd., Houston, TX 77096 the sum of ___________ dollars ($__________) as an endowment gift, and solely the income therefrom shall be distributed on an annual basis in equal portions to the ________________ (example: Annual Campaign of the Jewish Federation of Greater Houston),  to the _________________ (example: Jewish Community Center of Houston), and to _________.

A bequest to an established fund at the Foundation:
 I bequeath to Houston Jewish Community Foundation, 5603 S. Brasewood Blvd., Houston, TX 77096 the sum of ___________ dollars ($__________) for the benefit of the _______________ MEMORIAL ENDOWMENT FUND of the Houston Jewish Community Foundation with distributions to be made each year in accordance with Paragraph ____ of the document establishing that fund.

If qualified retirement plan assets, IRA assets, or similar property will be in your estate, it is wise to include the following paragraph with the charitable bequest:

The Executor shall first use any property, which if received by my estate would constitute income in respect of a decedent for federal income tax purposes, in satisfying this bequest to the Houston Jewish Community Foundation.

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An endowed gift to the Houston Jewish Community Foundation has the power to endure. Your endowment fund will continue to make an annual gift to your favorite Jewish causes, preserving your memory and sustaining our community for generations to come.

Your annual gift alone cannot secure the future of the Houston Jewish Community Foundation. Your endowment fund can.

An endowment is a permanent restricted fund dedicated to endowing your annual gift to your favorite organizations. An endowment fund is not intended to substitute for any part of your annual gift—it is, instead, a lasting legacy for the future.

Endowments can be created through a variety of vehicles, some of which do not necessitate funding during your lifetime, yet still provide your estate with considerable tax benefits.

To calculate the amount needed to create your endowment, simply multiply your current annual gift by twenty. You can also endow a portion of your gift by establishing a fund with a lesser amount and building the fund through subsequent contributions.

Frequently Used Vehicles to Fund an Endowment

• a simple bequest in a will or trust
• an IRA or pension plan
• a life insurance policy
• a charitable remainder trust
• an outright gift
• a philanthropic fund or supporting foundation

A life insurance policy can be a cost-effective way to support charitable causes, especially for younger donors. Last-to-die policies offer affordable premiums with large charitable benefits and are available to all adult age groups.

When you purchase a new policy naming the Houston Jewish Community Foundation as owner and beneficiary, you will receive a tax receipt for the full value of the annual premium payments. The death benefit is then used to create a permanent endowment.

You may also transfer an existing policy and name the Foundation as owner and beneficiary. At the time of transfer, you are entitled to a current deduction equal to the net cash value of the policy, and all future premium payments would be a current tax deduction.

At-A-Glance

• Make a significantly larger contribution than otherwise possible because of the relatively low cost of an insurance policy
• Allow you to create a legacy without using existing assets, which may be needed by your family
• Guarantee that a specific gift amount will be distributed to the community in the future, regardless of fluctuations in the value of assets
• Premiums are tax deductible contributions

Leverage the value of property while securing the future of the Jewish Community. Your charitable future may be in your possession right now.

A donation of real estate allows you to achieve your charitable goals and provides you with the maximum benefits allowed by law. The retained right of use of the property can be for the lifetimes of the contributor and a surviving beneficiary, and it does not need to be the primary residence (it can be a second or vacation home).

Gifts of real estate allow you to bypass capital gains taxes, preserving 100% of your real estate’s current value. In addition, you receive a charitable income tax deduction equal to the fair marketing value of the land to offset other tax liabilities.

Types of real estate you can give:

• A house or condominium
• An apartment building
• Undeveloped land
• A shopping center
• A vacation home
• A commercial or industrial building
• An undivided interest in real estate

Supporting foundations, also known as supporting organizations, are special entities that are similar to private foundations, but have the investment and tax advantages of public charities.

They are separate, not-for-profit corporations that support the mission of the Jewish Federation of Greater Houston. The Federation handles all bookkeeping and record maintenance for these foundations, however, the assets of the supporting foundation may be manages by outside investment experts of your choice and don’t have to be commingled with Foundation assets, as is the case with donor advised funds.

Unlike private foundations, which have strict limitations on tax deductions, supporting foundation contributions are subject to public charity deduction limitations.

Donors may donate closely held stock and may deduct up to 50% of adjusted gross income for gifts of cash and up to 30% of adjusted gross income for appreciated property. In addition, gifts of appreciated securities are deductible at their full fair market value. Also, unlike private foundations, there is no excise tax on net investment income. Supporting foundations are also not subject to the restrictions on investments and minimum distribution requirements of private foundations.

Family members can be appointed to the Board of Trustees of the supporting foundation, and can be involved in recommending and approving charitable distributions. A supporting foundation is an excellent method if involving loved ones in a charitable endeavor.

At-A-Glance

• the supporting organization is classified as a public charity, meaning donors receive the most favorable tax treatment for contributions
• a private foundation is subject to numerous IRS code restrictions and prohibitions which do not apply to supporting organizations
• a private foundation pays up to 2% income tax on its investment income; a supporting organization pays no income tax
• a private foundation is required to distribute at least 5% of its assets each year, whereas no specified percentage distributions are required of a supporting foundation
• the donor chooses the name of the supporting foundation, and can, if desired, achieve the same name recognition in the community he or she would receive with a private foundation by including the family name in the name of the foundation
• the donor will have the opportunity to include younger generations in their philanthropic traditions

The Houston Jewish Community Foundation is here to help you accomplish the mission and goals of your foundation. We are here to join your team and take care of the tedious office work for you, so you have more time to focus on what’s most important—philanthropy.

We treat each client as an individual and look forward to putting together a solution that will save you time and increase your efficiency.

Our standard services include:

• Review of grant requests and verification of each organization’s tax-exempt status with preparation of grant checks and cover letters
• Management of your assets, either with another fund advisor or in conjunction with placing assets within the Foundation
• Quarterly reports on income, gains, losses, and investment performance. This report may be used by your CPA or professional tax advisor to prepare the Form 990 PF.
• Full administrative and record-keeping services that will distribute your assets to you based upon your distribution policy and record you incoming additions and outgoing grants.
• 24/7 access to your fund balances via our “Foundation Central” website, which has SSL encryption
• Professional and experienced leadership team to proved excellence in customer service and financial accounting.
• At your request, we will coordinate Board meetings, distribute agendas, grant summaries, and prepare meeting minutes.

Fore more information about our services for private foundations, please contact Roberta Herman at 713-729-7000 ext. 327 or rherman@houstonjewish.org.

Disclaimer:
This information is intended as an educational tool. The information presented is to provide general information only and should not be construed as legal or accounting advice. Because tax and financial consequences involved with any gifting program depend on personal financial circumstances, individuals should consult with their own financial, legal and accounting advisors to review any charitable estate planning options.

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