Tax Fraud or ‘Planned Giving’ – You Decide
Planned Giving and the Cult of Death at the Temple of the MET
It started simply enough. I had heard of an investment system at the Metropolitan Museum of Art in New York City that seemed at first blush to be a reasonable deal. My initial inquiries provided me with some unique information but the more I learned the more I became concerned and then alarmed.
The materials often warned me that the Metropolitan Museum of Art and its ‘Planned Giving’ office were not providing me with legal or financial advice, however, there seemed no other way to describe it.
“A rose by any other name…”
But what I smelled coming from the Metropolitan Museum of Art and its ‘Planned Giving’ office was no rose.
What is the Metropolitan Museum of Art?
According to their website :
“The Metropolitan Museum of Art was founded in 1870 by a group of American citizens – businessmen and financiers as well as leading arists {sic} and thinkers of the day – who wanted to create a museum to bring art and art education to the American people.”
In 1999 the annual operating budget of the MET was reportedly $130 million dollars, for urrently the annual operating budget of the Metropolitan Museum of Art in New York is reportedly about $220 million dollars. Most of the budget is drawn from the “Metropolitan Museum of Art Endowment Fund”.
According to ‘Business Week’ :
“Metropolitan Museum of Art, Endowment is an endowment fund with $1.7 billion in assets under management. The fund engages in the following alternative investment strategies: buyouts/corporate finance, distressed debt/turnarounds, energy/oil & gas, hedge funds, international private equity, real estate, timber/farmland, and venture capital. Metropolitan Museum of Art, Endowment is headquartered in New York.”
As of February of 2011 members of the ‘Metropolitan Museum of Art’s Business Committee’ included (among others) :
Jewelle W. Bickford
Senior Strategist
Genspring Family Offices
Leon D. Black
Founding Partner
Apollo Management, L.P.
Richard L. Chilton, Jr.
President and Chief Executive Officer
Chilton Investment Company, Inc.
Rena DeSisto
Senior Vice President, Marketing and Communications
Bank of America
James E. Fitzgerald, Jr.
Executive Vice President, Northeast Division
Wachovia
Patrick Gaston
Executive in Residence
Clinton Bush Haiti Fund
James P. Gorman (Co-Chair, Business Committee)
President and Chief Executive Officer
Morgan Stanley
Rajat Gupta
Senior Partner Emeritus
McKinsey & Company, Inc.
Dennis M. Nally
Chairman, Senior Partner
PricewaterhouseCoopers LLP
Jeffrey M. Peek (Co-Chair, Business Committee)
Vice Chairman, Investment Banking
Barclays Capital, Inc.
Ruth Porat
Executive Vice President & Chief Financial Officer
Morgan Stanley
Grant A. Porter
Vice Chairman
Barclays Capital
James D. Price
Co-Head, Wealth Management Advisor Group US
UBS Financial Services, Inc.
Felipe Propper De Callejon
First Vice President
Smith Barney
William R. Rhodes
Senior Advisor
Citi
E. John Rosenwald, Jr.
Vice Chairman Emeritus
J. P. Morgan
David Tepper
Senior Partner
Appaloosa Management L.P.
Enzo Viscusi
Senior Advisor
ENI SpA
The Email from the Metropolitan Museum of Art
Dear Mr. Brock,
Thank you for your inquiry about supporting the Museum through planned giving. I would be happy to send you some information and wondered if you would like for me to include an illustration of how a life income gift, such as a charitable gift annuity, would work for you specifically? If so, please send me your date of birth at your convenience and I will get the example to you. Thank you again for your interest in the Museum.
Sincerely,
Natalie G. Taylor
Development Officer for
Planned Giving and Major Gifts
The Metropolitan Museum of Art
212.650.2387
Planned Giving and the Denial of Giving Legal or Financial Advice from the Metropolitan Museum of Art in New York
The Met provides for people to donate many different things to the museum. It also provides information about how these gifts can be used to lower or even, in some cases, eliminate them altogether.
Even though the Met claims not to offer legal advice I draw your attention to the legal phrases that they freely provide with their literature.
Bequests
You may arrange for the Museum to receive:
1. a specific dollar amount
2. specified assets, such as securities, real estate or tangible personal property
3. all or a percentage of the remainder of your estate after all other obligations (a residuary bequest)
4. You may make a bequest to the Metropolitan by preparing a new will or adding a codicil to your present will.
5. An outright bequest to the Metropolitan is fully tax-deductible for estate-tax purposes.
We've suggested language you may find useful in writing your will. Please see How to Make a Bequest: Useful Language.
Suggested language for making an unrestricted bequest:
"I give, devise and bequeath [the sum of ____ dollars], [all or ____ percent of the rest, remainder and residue of my estate of every kind and description (including lapsed legacies and devises)] to The Metropolitan Museum of Art, 1000 Fifth Avenue, New York, New York, for its general corporate purposes."
Suggested language for a specific purpose:
"I give, devise and bequeath [the sum of ____ dollars], [all or ____ percent of the rest, remainder and residue of my estate of every kind and description (including lapsed legacies and devises)] to The Metropolitan Museum of Art, 1000 Fifth Avenue, New York, New York, to create an endowment from which only the income is to be used for the following purpose: [state the purpose]."
Important Note: If you do specify a use for your bequest, the following language will ensure that your gift will always remain productive: "If at any time in the judgment of the Trustees of The Metropolitan Museum of Art the designated use of this bequest is no longer practicable or appropriate, then the Trustees shall use the bequest to further the general purposes of the Museum, giving consideration, where possible, to my special interest as described above."
Charitable Gift Annuities
An agreement between you and the Metropolitan that provides you with regular fixed payments annually (an annuity) for life in exchange for transferring assets to the Museum.
Gifts can be made with cash or marketable securities. The minimum gift is $10,000.
The fixed payment amount you receive will be determined by how much you contribute and your age at the time the gift is made.
Income for life may be paid to one or two annuitants. The minimum age at which an annuitant can receive payments is 65.
A portion of the payment is tax-free.
A charitable deduction is available for a portion of your contribution on your income tax return in the year you make the gift.
It is possible to defer receiving payments for one or more years. This will result in higher annuity payments, higher tax deduction (available in the year you make the gift), allowing you to enjoy increased retirement income.
Example 1
Mrs. Butler, who is 75 years old, establishes a $10,000 gift annuity for the eventual benefit of The Metropolitan Museum of Art. At her age, she will receive payments fixed for life at 6.4% ($640 per year) paid in quarterly installments of $160, some portion of which will be tax-free, and can claim an immediate charitable deduction of about $4,096 on her federal income tax.
Example 2
Ms. Wise, who is 55 years old, establishes a $10,000 gift annuity that defers payments for ten years. She can claim an immediate charitable deduction of about $2,039 on her federal income tax. When she turns 65, she will begin to receive payments fixed for life at 8.4% ($840 per year), some portion of which will be tax-free.
Ms. Wise can add significantly to her retirement income by establishing a new deferred-payment gift annuity each year for a number of years, creating a growing stream of income for her. She will be able to claim a charitable deduction on her income tax each year a new annuity is established.
Example 3
Mr. Young, who is 66 years old, has already retired. He is comfortable with his income at the moment but is concerned that he will outlive his resources. Therefore, he establishes a $100,000 gift annuity with payments deferred for six years. He can claim an immediate federal income tax charitable deduction of about $39,065 on his income tax. When he turns 72, he will begin to receive payments fixed for life at 7.7% ($7,700 per year), some portion of which will be tax-free.
Charitable Remainder Trusts
An agreement between you and a trustee that can provide fixed or variable income to meet your specific financial needs, at the termination of which the remaining assets are passed to the Museum.
The donated assets (typically cash, securities, and/or real property) are irrevocably transferred to a Trustee.
There are two variations:
A charitable remainder annuity trust—pays income as a fixed dollar amount that remains constant for the term of the trust.
A charitable remainder unitrust—pays income that varies from year to year.
At the termination of the trust, the remaining assets pass to the Metropolitan for its general purposes or for the use you specify.
A charitable deduction for a portion of your contribution is available on your income tax return in the year you make the gift.
Example
Mr. Kim is 72 years old and, while he would like to make a significant gift to the Metropolitan Museum, he is concerned about providing for his 71-year-old wife. He decides he can do both by creating a charitable remainder annuity trust from which she will receive the income during her lifetime. He takes $750,000 of appreciated securities and establishes a trust to pay 6% ($45,000) a year to his wife for her lifetime. Mr. Kim knows that if he sold the stock, the capital gains tax on the appreciation would consume a good portion of the proceeds. By establishing the trust, Mrs. Kim will enjoy income from the full $750,000 as well as claim a federal income tax charitable deduction. His greatest pleasure comes from knowing that the Metropolitan will receive the principal remaining when the trust ends—a much larger gift than he ever thought possible.
The Metropolitan Pooled Income Fund
An agreement between you and the Metropolitan that operates somewhat like a mutual fund, accepting gifts from many donors, managing them as a common fund, and providing variable annual income.
You can make gifts with cash or marketable (but not tax-exempt) securities. The minimum gift is $10,000.
The income may be paid to one or two beneficiaries and will vary depending on the earnings of the fund.
You will receive an immediate income tax charitable deduction for some portion of your gift.
Upon the death of the beneficiary, the remaining principal passes to the Metropolitan for the purpose the donor has stipulated or for the Museum's general purposes.
Example
Mr. and Mrs. Deitch, who are 57 and 64 years old, have $10,000 worth of stock that they bought in 1974 for $6,000. Although it has appreciated, the annual income from the stock is quite low. If they sell the stock, however, they will have to pay capital gains tax. Instead, they use the stock to make a gift to the Metropolitan Museum Pooled Income Fund and receive the following income and tax benefits: payments to both spouses and then to the survivor, for life, at about 4.8% for the first year (future income will vary with fund earnings), based on the full $10,000; and an immediate charitable deduction of about $3,005 on their federal income tax.
Charitable Lead Trusts
An agreement between you and a trustee that provides income to the Metropolitan for a period of years, at the end of which the trust property typically passes to an heir.
Income-producing assets that are expected to gain in value such as stock or income-producing real estate are irrevocably transferred to a trust. A minimum gift of $100,000 is recommended.
The Museum receives income from the trust for a specified number of years, after which the property in the trust is transferred to the heirs without the imposition of any additional taxes.
An immediate charitable deduction on your gift tax return is available for the present value of the total income stream the Museum will receive during the trust term.
This gift can reduce or effectively eliminate the gift and/or estate tax that would normally be payable on the transfer of these assets to your heirs.
Example
Mr. and Mrs. Wheeling, who wish to make a significant gift to the Museum, have a son to whom they would like to transfer a substantial block of stock. He is young and they do not wish to burden him with the management of these assets at this time. They have good reason to expect that the value of the stock will appreciate in the coming years, and would like to remove it from their estates so as to avoid estate tax in the future. Since they do not depend on the income from these assets, they decide that a charitable lead trust may be the way to fulfill both of these objectives.
With this plan, the Wheelings are able to accomplish the following:
•The Museum can plan for the use of a stream of income for a number of years.
•When the trust terminates, the assets in the trust will pass, with no additional tax, to their son.
•The trust property has been removed from—and therefore is not taxable in—their estate.
Retirement Assets, Life Insurance, Real Estate
Read information about using these assets as a gift to the Museum.
Retirement Account Assets
Retirement account assets, if left to anyone other than a spouse, may be subject to very high taxation. However, by designating the Metropolitan Museum as recipient of any benefits remaining in your retirement plan, you may effectively reduce the taxes on those assets.
Real Estate
The gift of your home is a unique and meaningful way to support the Metropolitan Museum.
You can enjoy the satisfaction of making such a gift during your lifetime—without affecting your current lifestyle—by a special arrangement called a retained life estate.
Real estate can also be a valuable asset when used to fund either a charitable remainder trust or a charitable lead trust.
Life Insurance
You may wish to make the Museum the beneficiary of a policy.
With gifts involving any of these assets, there are many variables to consider. Please call the Planned Giving Program directly to discuss your particular situation.
Planned Giving Glossary
Provided here are definitions of some financial words and phrases that are used when talking about Planned Giving.
Many financial words and phrases appear in the Metropolitan Museum's information about Planned Giving. Below are some simple definitions to help you read the pages.
Annuitant
One who receives annual fixed payments from an annuity
Annuity
A fixed sum payable annually
Appreciated securities
Stocks and/or bonds that have increased in value since they were acquired
Beneficiary
The person named to receive the income from, or remaining assets of, a trust
Bequest
A gift through one's will
Capital gains tax
The tax imposed upon profits realized from the sale of financial assets that have increased in value since they were acquired
Codicil
An addition to a will that either modifies it or revokes part of it
Gift tax
A tax imposed on someone who gives money or property to another person without compensation
Irrevocable gift
A gift that cannot be annulled, undone, or changed
Mutual fund
An investment company that invests the money of its shareholders in a diverse group of securities of other corporations
Present value
The value, in today's dollars, of assets to be received at some future time
Principal
The initial sum invested or borrowed, or the remainder of that sum after payments have been made
Real property
Immovable property; land, together with all the property on it that cannot be moved, together with any attached rights; often referred to as "real estate"
Retained life estate
The right to use property for life (usually a residence or a farm) after contributing the remainder interest to a charitable institution
Retirement accounts
Qualified plans like IRAs and 401(k) accounts that permit individuals to accumulate savings tax-free for retirement
Tangible personal property
Includes movable objects (e.g. china, books, cars, clothes, art, etc.) but does not include land, buildings, or other forms of real estate (real property—see above), or stocks, bonds, copyrights, cash, or other "intangible" personal property
Trust property
Property held in trust by one person (trustee) for the benefit of another (beneficiary)
Variable income
Payments received on a regular basis that are subject to change, not fixed
Planned Giving at the Metropolitan Museum of Art and the Cult of Death
The unofficial mascot of the Metropolitan Museum of Art is pottery statue of a hippo covered with metal and lacquer. It has been widely purported to be over 4,000 years old.
They call it ‘William’.
There is a group you can join if you donate cash, stocks, bonds, real estate or life insurance and other things to the Metropolitan Museum of Art.
It is called ‘The William Society’.
In a document entitled ‘Planning Your Gift’ the Metropolitan Museum of Art included such phrases as :
“How gifts can be made advantageously under existing tax laws”
-pg. 1 ‘Planning Your Gift’
“How these laws can help you to give more than you thought possible”
-pg. 1 ‘Planning Your Gift’
In that same booklet – ‘Planning Your Gift’ – the museum states that there is no minimum gift amounts, dues or fees associated with membership in ‘The William Society’.
If you want to actually be a member of ‘The William Society’, however, you actually do have to contribute something, unless you are ‘appointed’ to ‘The William Society’. Therefore – the statement that there is no minimum gift amounts, dues or fees is, in my opinion, clearly untrue.
This is only the beginning of a description of a strange and bizarre arrangement at the Metropolitan Museum of Art that appears to be some sort of quasi-religion.
The persons who indoctrinate those who wish to join are the associates, directors and managers of the ‘Planned Giving’ department.
The priests and functionaries of the religion, are, of course, the artists and curators and the Board Members form a sort of bridge between the gods and humanity. The bridge is built with money. The ideals and ideas being offered point to a promise of everlasting life.
This bizarre mystical promise is heavily laced with information encouraging citizens to avoid paying their taxes.
Even though the quasi-religion of the Metropolitan Museum of Art in New York offers immortality to participants the rites of the religion center on the death of the believer, who must, after all, die in order to achieve the ultimate status in ‘The William Society’ of a member who will be able to “know they are helping to maintain the Metropolitan’s standard of excellence for future generations.” – pg. 2 ‘Planning Your Gift’.
Other strange language appears throughout the ‘Planning Your Gift’ booklet :
“You may find that including the Metropolitan Museum in your will allows you to make a more significant contribution to the Museum than is possible during your lifetime.” -pg. 3 ‘Planning Your Gift’
“Your will can be a creative vehicle through you can make thoughtful gifts to family and friends and also to those organizations that you supported during your lifetime.” -pg. 3 ‘Planning Your Gift’
“An outright bequest to the Metropolitan is not subject to federal or state estate or inheritance taxes and is, in fact, deductible in calculating the taxable estate. There is no limit on that deduction.” -pg. 3 ‘Planning Your Gift’
“The one or two beneficiaries you name will receive payments for life, after which the bequest will pass to the Museum.” -pg. 3 ‘Planning Your Gift’
“An opportunity to increase your income from low-yeild, highly appreciated securities while reducing or, in some cases, avoiding tax on the appreciation.” -pg. 6 ‘Planning Your Gift’
“Reduced estate taxes.” -pg. 6 ‘Planning Your Gift’
“Any capital gains tax that is generated will be spread over your life expectancy if you are an annuitant, rather than being paid in the year you make the gift. -pg. 8 ‘Planning Your Gift’
“Payment rates that are higher in many cases than current interest rates.” -pg. 9 ‘Planning Your Gift’
“Generate significant tax benefits.”
-pg. 10 ‘Planning Your Gift’
“The deduction will be calculated in a manner similar to that for a gift created during your lifetime.”
-pg. 13 ‘Planning Your Gift’
The William Society and the Cult of Death at the Metropolitan Museum of Art in New York
From the Metropolitan Museum of Art’s web site :
“One of the most popular ancient Egyptian figures in the collection of the Metropolitan Museum—and sometimes referred to as the Museum's unofficial mascot—"William" was originally intended to provide protection and power in the afterlife. As the symbol of The William Society, this beloved hippopotamus embodies the enduring qualities of The Metropolitan Museum of Art.”
Additionally from the Metropolitan Museum of Art’s web site for educating children :
“"William" is a bright blue hippopotamus just under 8 inches high located in the Metropolitan Museum of Art's Egyptian galleries. He is made of faience, a ceramic material that is fired at a high temperature, and is decorated with lotus blossoms, which represent the hippo's creative forces in nature.
An Englishman, Captain H. M. Raleigh, and his family owned a picture of the hippopotamus, which they named William. In 1931 the captain wrote an article for the magazine Punch about his picture of William. The name caught on, and since that time the little blue hippo has been known as William to almost everyone.”
Actually the hippopotamus is a huge, deadly animal capable of killing a person with little effort.
The Ancient Egyptians fearfully worshipped the hippopotamus for its physical strength and its supposed spiritual powers.
Fishermen often found themselves in conflict with these massive beasts. The hippos flipped boats that entered their territory or crossed their paths and caused many deaths. Hippos were hated because they destroyed crops and could bring on starvation.
The hippopotamus became a central figure in Egyptian art and religion.
A few Ancient Egyptian gods were represented by the hippopotamus.
One was was Tawaret, a goddess of fertility and childbirth. Normally shown as a pregnant hippopotamus standing on hind legs. Sometimes depicted as half human, half hippo. Pregnant Egyptians would often wear amulets around their necks as protection from harm or evil forces.
The one god commonly associated with the hippopotamus in the way that ‘William’ of ‘The William Society’ is depicted, however, is the Ancient Egyptian god known as ‘Seth’.
These faience hippopotami, like ‘William’, were often decorated with lotus flowers, reeds, and other plants found living near or in the Nile and are usually a beautiful turquoise or green color.
‘William’ is a depiction of ‘Seth’.
The male hippo was considered an animal of ‘Seth’ and therefore an evil animal. This little blue hippo which a cash-strapped captain from Victorian England used to drum up some money through an article in ‘Punch’ is a depiction of the god whose modern equivalent is ‘Satan’.
‘Seth’ is known as the ancient Egyptian god of chaos. He was considered the embodiment of hostility and even of outright and absolute evil.
Also the god of war he was the ruler and maker of deserts, storms, and the menace of foreign lands.
As the desert god he protected caravans because he could cause sandstorms with which to destroy them.
In the myths of Osiris the story is that Seth killed his good brother and scattered the remains all over Egypt.
That little hippo is not a cute little object. It is not an item that should be boasted of. It is not war booty. It is loot.
The Museum curators should know this but the commercial arm of the Metropolitan Museum of Art have latched onto it and exposed a world of children and adults to a symbol of death as if it were a toy or plaything.
Consider ‘The William Society’ which contends that it can extend the influence of the dead onward many generations into the future.
The reality is that once the dead are gone if they gave money to the Metropolitan Museum of Art they obviously have no further control over it. It belongs to the Metropolitan Museum of Art.
The idea and ideal offered to the persons being enticed into giving is that they will able to ‘live on’ in their gifts. This is beyond ludicrous.
Combined with the fact that many funds like the one that is supporting the Metropolitan Museum of Art in New York are ‘under water’ (they are paying out more than they are taking in) and that shenanigans involving the changing of wills at the last minute or while ‘benefactors’ were incapacitated by drugs or pain – and you are looking at what could be an enormous fraud.
Certainly any fund paying out more than it is receiving and promising new contributors that they will receive outrageous returns (by being paid money from earlier donors) then you have a Ponzi scheme worthy of someone like Bernard Madoff.
Frame of Reference – the DSO and the MOMA
The Detroit Symphony Orchestra and the Museum of Modern Art at 11 W 53rd Street in New York City have some things in common.
One of them is a detailed and involved process for what appears to be tax evasion.
They each have a system which allows patrons to donate money, stocks, bonds, personal property, real estate. They also provide detailed instructions on how to avoid paying taxes.
At this time the Detroit Symphony Orchestra alternately claims it is in financial straits because of an ongoing musician strike which has cancelled this year’s season and releasing news briefs that it is flush with cash from continuing donations to its funds.
Recently a fifty-four million dollar loan to the Detroit Symphony Orchestra was called by banks consolidating the debt they were handling for the Orchestra fund. A confused process led to the orchestra’s lenders (among the JP Morgan Chase) to paying off bondholders at the end of last year.
Further complicating the matter are contentious labor talks which have presented the comical appearance of tuba and bassoon players marching in picket lines wearing tuxedos and expensive fur coats toting around signs stating ‘DSO On Strike’ and ‘Keep the Quality, Keep the DSO Great’ and ‘33% Pay-Cut for DSO Management’.
The Museum of Modern Art in New York’s web site proudly states, “Yes! I would like to support MoMA's Annual Fund with my fully tax-deductible contribution.” as it encourages patrons to log on and avoid taxes in several different ways.
Patrons are directed to the ‘Planned Giving Director’ at the Museum of Modern Art. This individual is the point person for various methods of ‘donating’ cash, securities or property to the Museum of Modern Art. Some of the complex arrangements offered allow patrons to defer income, redirect income or even receive an ongoing revenue stream all while avoiding local, state and federal taxes.
The web site and printed material from the Museum of Modern Art concerning ‘Planned Giving’ states : “It is not intended to provide specific advice about the legal or tax .”. In spite of this warning the material goes on to provide specific information and even legal language to use when creating these ‘Planned Giving’ bequests.
A big problem with this system is that there have been reports that persons have been pressured on their death beds or their personal papers and financial matters have been changed during times when they were incapacitated and unable to stop these manipulations. The biggest problem with the system is that ‘non-profit’ organizations are able to use their friendly face to set up what appear to be Ponzi schemes where the earlier investors’ (most soon to die) funds are used to make the payments to the newcomers (most of whom it is planned will not last too long).
Bait and Hook
Please be aware that is has been generally established that most of these Foundations, Funds and ‘Planned Giving’ schemes have been ‘under water’ for the past few years.
The phrase ‘under water’, when used in reference to a mortgage indicates that the person holding the mortgage owes more in mortgage payments on the property that is mortgaged than the property is worth.
The phrase ‘under water’ when used in reference to the Foundations, Funds and ‘Planned Giving’ schemes being discussed her indicate that the fund is taking in less money than it is paying out. That is, of course, an unsustainable situation. It is also, if the Foundations, Funds or ‘Planned Giving’ schemes continue to state that they can provide ‘guaranteed’ income, a type of fraud.
The Director of ‘Planned Giving’ at the Museum of Modern Art in New York City is Emmett Watson.
Their address is :
The Museum of Modern Art
11 West 53 Street
New York, NY 10019
Phone: (212) 333-6527
Fax: (212) 333-1168
E-mail: planned_giving@moma.org
The Museum of Modern Art claims that is not providing legal or tax advice, yet, in some literature that I have the ‘Planned Giving’ organization gives detailed wording to be used in legal documents such as wills and provides outlines of arrangements that can continue to bear financial fruit for those persons seeking to reduce or eliminate their tax obligations.
In short – these documents sketch a rather intricate manner in which a person interested in doing such things could avoid paying taxes on taxable income. This is sometimes referred to as a ‘tax dodge’. Another phrase for it is a ‘tax haven’. Combined with the fact that most of the organizations are ‘under water’ – that is paying out more then they are taking in – we can clearly see a Ponzi scheme in shape and purpose.
Consider that organizations like the Detroit Symphony Orchestra and the Museum of Modern Art in New York are operating in every state in the union and that many of them have begun taking in ‘donations’ from other states in an effort to increase their fund base as well as providing a nice sidestep to regulation by individual states – and we can see that the amounts of tax revenue and business activities like the consolidation of bonds and other interest bearing tax free instruments that are being hidden in and by these tax shelters is likely in the hundreds of billions of dollars each taxable year nationwide.
Some states may be sacrificing billions of dollars in potential income to double-finance organizations like poorly performing (or not performing at all) symphonies like the Detroit Symphony Orchestra or confused organizations like the Museum of Modern Art or questionable social organizations like Planned Parenthood.
Do not be limited by the Arts when considering the apparent illegal behavior of these tax havens. They work closely with national banks who finance the arrangements and tend to the funds.
Clearly the laws were not written to allow the sort of fraud and greed that has gripped these desperate organizations who are fighting tooth and nail to avoid facing the same severe economic problems that industry, government and the general economy has had to face.
Consider the following types of institutions allowed to behave in this way in the United States :
A. Any charitable, religious, benevolent or educational organization, pecuniary profit not being its object or purpose, after being in active operation for at least 10 years
B. A nonprofit corporation organized and controlled by a hospital licensed by the State Department of Health Services as a general acute care hospital
C. An incorporated educational institution offering courses of instruction beyond high school
D. Every organization or person maintaining homes for the aged for pecuniary profit.
The result is that others in the community – who are paying taxes to support these ‘tax free’ organizations – are saddled again and taxed twice to provide these organizations with the funds and expertise that they immediately use to apparently defraud their local government, their state government and the federal governments of their rightful tax income.
The following is a list of items that the Museum of Modern Art encourages individuals who want to get in on the scheme to donate. This list was extracted from the Museum of Modern Art’s website.
Each of these items is supported by other literature distributed by the Museum of Modern Art, can be used to avoid or reduce taxes of many kinds. In some cases the proceeds of the investments can actually be enjoyed for decades without being encumbered by taxes.
Cash and Securities
The simplest method of donating to the Museum is with an outright gift of cash or securities.
Cash
A gift of cash is the most popular way of supporting MoMA. Gifts of cash are ordinarily tax deductible up to 50% of your adjusted gross income (AGI) in the year of your contribution (with a five-year carryover for the excess not utilized).
Securities
Next to cash, readily marketable appreciated securities are the assets most commonly donated to MoMA. When you donate appreciated securities, you generally do not incur any capital gains tax. You also may be eligible to receive a federal income-tax charitable deduction (up to 30% of your AGI with a five-year carryover) for the securities’ full fair market value if you have held them long term (i.e., for longer than 12 months). If the donated securities were held short term (i.e., 12 months or less), your deduction may not exceed your cost basis. Because a gift of appreciated securities generally avoids capital gains taxes, this type of gift may have a lower after-tax cost to you than an equivalent gift of cash.
In addition to stock, you may donate bonds and mutual fund shares to MoMA.
If you are considering making a gift of securities to MoMA, contact the Office of Planned Giving at (212) 333-6527 for information on the proper procedures, including Depository Trust Company instructions.
Bequests
Bequests (specific, residuary, and contingent gifts made by will) are the most popular type of planned gift and have been crucial (along with remainders from charitable trusts) to the extraordinary growth and success of The Museum of Modern Art since its founding. Whether you wish to provide general operating income for the Museum to use wherever it is most needed (which provides the most flexibility for MoMA) or to support a specific department or program at the Museum, your bequest expresses your lasting commitment to MoMA. A bequest to the Museum may also help you meet your financial and estate-planning goals since an estate-tax charitable deduction for the entire amount of the gift is allowed. While your will (or codicil) should be prepared by your attorney in consultation with your advisors, the Museum's Office of Planned Giving would be happy to discuss any of the various giving opportunities with you.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.
Charitable Remainder Trusts
Charitable remainder trusts allow you to make a gift to MoMA and at the same time retain a benefit from the assets you give. These separately managed trusts can be tailored to meet your financial goals with respect to the payout rate, type of income stream (variable or fixed), and payment schedule. To establish a remainder trust, you make an irrevocable contribution of cash, securities, or other property, which is placed in trust. The trust pays an income stream to one or more named beneficiaries (which can include you) for life and/or for a set term of years (not to exceed 20), and the Museum receives the right to principal as a remainder interest. The two most common types of charitable remainder trust are: (1) the annuity trust, which pays a fixed dollar amount each year based on a percentage (at least 5%) of the initial fair market value of the trust assets; and (2) the unitrust, which pays a variable income stream based on a percentage (again, at least 5%) of the fair market value of trust assets as revalued each year. A deferral feature is available for charitable remainder unitrusts. Because charitable remainder trusts (like an IRA or 401(k)) are tax-exempt, this deferral feature can make them a useful retirement planning tool if you are in a position to defer your receipt of an income stream. Charitable remainder trusts are typically funded with assets worth $100,000 or more. Establishing such a trust generally entitles you to claim an immediate income-tax charitable deduction. You should consult with your financial, tax, and legal advisors for more information on charitable remainder trusts as they pertain to your particular situation and needs.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.
Charitable Lead Trusts
A charitable lead trust is the reverse of a charitable remainder trust; the gift to MoMA is the income stream from the trust, not the remainder. Charitable lead trusts enable you to provide an income stream to the Museum immediately for a set term of years or for a term measured by one or more lifetimes after which the trust assets pass to you or your estate or to your heirs. Leaving the asset to heirs can significantly reduce the gift or estate tax that would otherwise apply. If you think a charitable lead trust could be a useful way to structure a gift to MoMA, you should review the alternatives for structuring the trust with your financial, tax, and legal advisors.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.
Retirement Plan Assets
Assets in qualified (tax-deferred) retirement plans may represent a large portion of your total assets and therefore may be an important factor in planning testamentary charitable gifts. Retirement assets generally considered suitable for charitable gifts include such plans as IRAs, Keoghs, SEPs, 401(k)s, 403(b)s, and ESOPs.
Left to family members or friends, these assets are subject to income tax and may also be subject to estate tax and generation skipping transfer tax. Because of this potential double layer of tax, retirement plan assets may be particularly attractive as an asset to leave to MoMA. In other words, if you designate the Museum as a beneficiary upon your death of all or a specified percentage of a retirement plan, the portion of the plan payable to the Museum will generally escape estate taxes, and MoMA, as a tax-exempt institution, will not be required to pay income tax on the distributions. As a general rule, if you intend to make both noncharitable and charitable gifts at death, it makes sense to consider using your tax-deferred retirement plan assets for charity and other assets for heirs. If you are thinking about donating retirement plan assets to the Museum, you should discuss the matter with your advisors beforehand.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.
Life Insurance Policies
Naming the Museum the beneficiary of an existing life insurance policy that is no longer needed to provide for dependents offers a simple way to support MoMA. Since you are the policy owner, the value of the policy will be included in your estate, but an offsetting estate-tax charitable deduction will generally be allowed. You may also be able to assign an existing whole life policy to MoMA, irrevocably making the Museum the owner and beneficiary, and claim an income-tax charitable deduction for the lesser of either your basis in the policy or its fair market value in that year. If the policy is not paid up and additional premium payments are due, you may donate cash or the equivalent to MoMA to pay the premiums each year and claim a full tax deduction for the gift. Lastly, you may be able to purchase a new policy naming MoMA as owner and beneficiary, pay the annual premiums (through MoMA), and claim the premium amount as a charitable contribution.
If you are considering donating a life insurance policy to MoMA, it is important that you consult your advisors about the possible state law restrictions on such a gift and about the amount of the charitable deduction you can expect to receive.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for further information.
Tangible Personal Property
Tangible personal property, such as books, artwork, jewelry, antiques, and the like, may be donated to MoMA during your lifetime or by bequest. The Museum must give special consideration to such gifts before it can accept them, and we advise you to contact the Office of Planned Giving if you are contemplating donating tangible personal property to the Museum. (See note on gifts of artwork below.)
As with gifts of appreciated securities held long term (longer than 12 months), a donor of tangible personal property held long term and accepted by the Museum is potentially entitled to claim an immediate income-tax charitable deduction and avoid capital gains taxes. The extent of the allowable income-tax deduction for such a gift, however, would depend on whether the Museum uses the property in a manner related to its tax-exempt mission.
If the use of the contributed property is related to MoMA's exempt purposes (e.g., gifts of modern or contemporary artwork accepted into the Museum’s collection), the donor is generally entitled to claim an income-tax charitable deduction for the full fair market value of the property (up to 30% of AGI with a five-year carryover). If the use of the contributed property is unrelated to MoMA's exempt purposes, or if the donor held the property for 12 months or less before making the donation, then the donor's income-tax charitable deduction is limited to the cost basis in the property.
Contact the Office of Planned Giving at planned_giving@moma.org or (212) 333-6527 for curatorial department contact information.
The Detroit Symphony Orchestra also offers a diversified list of items that they will accept as payment towards the ‘Planned Giving’ scheme that they are operating.
They can be contacted at :
DSO Development Office at (313) 576-5400.
Max M. Fisher Music Center
Detroit Symphony Orchestra
Development Department
3711 Woodward Ave.
Detroit, MI 48201
Following is a list of the items that the Detroit Symphony Orchestra is seeking. Please pay special attention to the statement that ‘Your planned gift will help the DSO continue to fulfill its mission for generations to come.’ The implication is that a person who dies after having donated cash, securities or other valuable property will live on in the work of the Detroit Symphony Orchestra. This may sound ludicrous at this time but later in the report more clearly illustrated examples will be provided thanks to the bizarre quasi-religion that the Museum of Modern Art has created.
Generations to Come
Whatever your goals and circumstances, Planned Giving can help you find ways to give that are right for you. The following might give you ideas about how to plan your gift but is no substitute for the personal advice you'll get from the Detroit Symphony Orchestra's professional planned giving staff and, of course, your own advisors. Your planned gift will help the DSO continue to fulfill its mission for generations to come.
Securities
Though gifts of cash are always welcome, there can be desirable tax advantages to giving securities. When you contribute securities that have increased in value, you can keep your cash for other uses and avoid the capital gains tax incurred when you sell appreciated assets. You also get a charitable tax deduction for the full market value of the asset, regardless of what you paid for it.
Real Estate
Gifts of real estate offer similar advantages. If you give property that you've owned for more than one year, you're entitled to a charitable tax deduction equal to the full value of the property. You also avoid paying a capital gains tax on the appreciation.
Bequests
Securities, real estate and other properties can also be donated by will, or bequest. You can also will life insurance or IRAs to the Detroit Symphony Orchestra and reduce your family's estate-tax burden after you're gone.
Legal and Tax Advice
A Few Words About Estate Taxes
One of the most overlooked areas of planning is the federal estate tax. Everything you own may be subject to this tax. To cut down on your estate tax liability, consider the charitable deduction, which allows you to deduct every dollar you give to charity through an outright bequest. In addition, property placed in a charitable trust generally will not be subject to the federal estate tax when the beneficiary dies.
Gifts That Provide Income To YouCharitable Remainder Trust
By transferring highly appreciated, low-yield property into a Charitable Remainder Trust you can bypass capital gains taxes, increase your income, and enjoy a charitable income tax deduction that could significantly reduce your current income taxes. After your lifetime, or a term of years, the principal remaining is your gift to the Detroit Symphony Orchestra.
For example, you might transfer into a trust stock that originally cost $25,000, but now has a fair market value of $100,000 and a current yield of 3%. If you select a 7% payout rate, you will increase the annual income from your investment from $3,000 to $7,000. You will also bypass the $75,000 gain and receive a substantial income tax deduction.
It is important to note that a trust pays a variable income based on a percentage of the fair market value of the trust assets, as revalued annually. You choose the payout rate based on your own needs. A low rate allow the trust assets to grow more rapidly, providing you with the opportunity to increase your future income.
Charitable Remainder Annuity Trust
A annuity trust pays a fixed income based on the percentage you choose, and the value of the assets when the trust is established.
For example, if you establish a 7% two-life annuity trust with assets of $100,000, you and your spouse would receive $7,000 each year for the rest of your lives.
Charitable Gift Annuity
Like the charitable remainder annuity, a charitable gift annuity pays you a fixed dollar amount for life, or for a term of years. The amount is determined at the time of the contribution and is based on your age and, if you have designated another beneficiary, on his/her age as well. For senior citizens, annuity rates may be 8% or 9%, or even higher. Part of the annuity payment is tax-free, and the initial charitable deduction offers substantial income tax savings.
Deferred Gift Annuity
With a deferred gift annuity, you can defer the receipt of income until a later date, such as retirement. This offers several benefits: your annual income will be higher when the payments begin, and the contribution secures a larger current income tax charitable deduction.
Gifts That Allow You To Keep Your Assets Retained Life Agreement
This agreement allows you to continue to live in property you own for life while receiving a substantial tax savings today. You would simply retain the use of your home and deed the remainder interest in the property to the Detroit Symphony Orchestra so that the DSO will own the property after you pass away. The deduction could save you substantially on your current income taxes, and is especially attractive if you plan to transfer property by will.
Charitable Lead Trust
A charitable lead trust is the reverse of the charitable remainder trust and functions as a temporary gift, or loan, to the Detroit Symphony Orchestra. That is, instead of paying income to you, the trust pays income to the DSO for a term of years, before the principal reverts back to you, a family member, or another beneficiary. A lead trust can greatly reduce estate taxes, allowing you to make a significant gift to the Detroit Symphony Orchestra and ultimately pass more to your heirs.
The Detroit Symphony Orchestra Planned Giving Team goes one step farther with clearly spelling out the “advantages” of giving.
•An immediate federal income tax deduction for all, or a portion, of the value of the gift.
•Elimination of capital gains tax at the time of the transfer if the asset is in the form of securities or real estate that have appreciated in value.
•Increased financial security for you or your heirs while providing meaningful support for the Detroit Symphony Orchestra.
•Income for life paid to you and/or another beneficiary, such as your spouse or another family member.
•Increased income if a gift is made to a life-income plan that produces a higher yield than the donated asset, which is often the case with securities.
The Cult of Planned Giving and the Promise of Everlasting Life
The Cult of Death at the Museum of Modern Art is particularly strong.
It has taken on the rarified air of a religion that promotes promise of everlasting life both by inference and sometimes by what appear to be direct statements of fact.
The process for joining this religion is to offer up cash, stocks, bonds, real property or other items to the Museum. The Museum acts as the Temple of the religion.
The ‘Planned Giving’ coordinators, managers and directors are the bureaucracy of the organization which allow the ‘chosen’ to be indoctrinated into the religion and to finally gain access to the Priests (the Museum Curators) and the Prophets (any living artist can fulfill this role).
One of the more benign groups that organizes itself around the ‘Religion of Planned Giving’ at the Museum of Modern Art in New York is ‘The Modern Circle’. It is a rather tame expression of what we are going to be shortly discussing a little more at length.
The Modern Circle
“The Modern Circle, chaired by Agnes Gund, recognizes members and friends who demonstrate their deep commitment to modern and contemporary art by making a planned gift or including the Museum in their estate plans. Through their foresight and generosity, these individuals play a key role in establishing a sound foundation for MoMA and ensuring its growth and success in the future. Members receive invitations to selected Museum events and programs. They are acknowledged, with their permission, in Museum publications.”
A group at the Detroit Symphony of Orchestra which also promotes the Cult of Planned Giving is ‘The Musical Legacy Society’.
The Musical Legacy Society
“The DSO introduced the Musical Legacy Society during the 1999-2000 season to honor and recognize individuals who provide for the DSO through their estate planning. Ways in which to become a member include making bequests in a will, gift of a life insurance policy; Charitable Remainder Trust; Charitable Lead Trust; remainder interest in a residence; and naming the DSO as a beneficiary on an IRA, CD, savings account or retirement plan.”
“Members of the Musical Legacy Society enjoy the satisfaction of knowing that they are supporting outstanding symphonic music for generations to come. Additional benefits include:
•Recognition in Performance, the DSO's magazine and concert program;
•Invitation for two to Musical Legacy Society events, a DSO open rehearsal and the annual Donor and Volunteer Appreciation Concert;
•A Musical Legacy Society lapel pin.
•Personalized ticketing assistance;
•Subscription to the DSO's bi-annual planned giving newsletter;
•Advanced notice of DSO special events. “
The Museum of Modern Art provides us with one clear example of the ‘Cult of Giving and the Promise of Everlasting Life’.
It is called ‘The William Society’.
I will try to explain it and the ramifications of its actions to you as best I can.
Proof of the Problem
The Detroit Symphony Orchestra has been collecting money and increasing the size of their ‘Planned Giving’ funds throughout the past year even though the orchestra has not played one note.
This is not due, as might be imagined, because of the deep commitment of citizens across the economically crippled area of Southeast Michigan – it is based, apparently, upon the promises made concerning guaranteed income and the surety that the donations will be tax free and the general acknowledgement that this sort of tax fraud and tax evasion and tax haven is ironclad.
Organizations like the Detroit Symphony Orchestra and the Museum of Modern Art in New York are quasi-governmental organizations already. They receive the right to exist from the government and they continue – with endowments, tax breaks and other financing and real estate arrangements as an appendage of local government.
During times of economic pressure – as in the present case – they are often the targets of efforts to ‘save’ them because they engender some sort of mysterious cultural power.
It seems they have taken advantage of this role they play in our society and have begun to metamorphose into parasites rather than harmless, beautiful and entertaining appendages.
The reorganization of the Detroit Symphony Orchestra’s finances did not appear to extend into any reorganization of the complicated and intricate dealings associated with the ‘Planned Giving’ funds.
The list of interested parties in the financial circus that the Detroit Symphony Orchestra has become includes such banks as JPMorgan Chase, Comerica and Bank of America
A Final Example – ‘Washington University in Saint Louis’
http://aisweb.wustl.edu/alumni/PlannedG.nsf/pages/SecuritiesTime
“Charitable trusts. For the philanthropically minded, a charitable remainder trust or a charitable lead trust can be an excellent way to obtain tax-free diversification of appreciated assets. There is no capital gains tax when the trustee sells low-basis, high-value assets and reinvests the proceeds for higher yield. A wide variety of choices is available to those designing a charitable trust, enough to meet both charitable and private financial objectives on a tax-efficient basis.
*The stepped-up basis is scheduled for partial repeal when the estate tax is repealed in 2010. Just $1.3 million of assets will then receive a stepped-up basis. Any excess will carry over the decedent’s basis. An additional $3 million basis step-up will be allowed on assets going to a surviving spouse.
Private annuities. A private annuity is a sale by one family member to another in exchange for the buyer’s unsecured promise to make specific periodic payments to the seller for life. There is no gift tax due on a properly structured sale, and the assets will be removed from the seller’s estate. A portion of each annuity payment is a return of capital (part capital gain and part nontaxable return of basis), and the balance is taxed as ordinary income. However, annuity payments by the buyer are not deductible, and so are made with after-tax dollars.
Family limited partnerships. A fairly new approach to managing family wealth is the family limited partnership. This technique provides for consolidation of assets for convenient management, segregation of assets for protection against claims of creditors, and the potential for gift tax valuation discounts. Typically, parents act as general partners, making gifts of small limited partnership interests to children over a period of years. Properly structured, such gifts generally qualify for the $11,000 annual gift tax exclusion.
A Legacy of Death
Lately non-profit groups have been going out of state to raise money.
For example last year the Phoenix Industrial Development Agency in Arizona sold bonds for two private schools in Manhattan, the Nightingale-Bamford School and the Friends Seminary School.
Planned Parenthood of America is also making arrangements to float bonds to help it continue to be the nation’s number 1 provided of abortion services in the country.
Reportedly Stuart Schear, a spokesman for Planned Parenthood stated, “We are exploring our options for out-of-state financing in several states.”
This would allow them, for example, to raise funds for abortions in New Jersey from investors in Wisconsin and to finance abortion centers in Washington State with a little help from their friends in Hawaii or Georgia.
Not only is this sort of activity misleading it is exceedingly dangerous from a financial point of view. Deceptive practices such as this eat at the core of the financial system which is rotten as it is.
Proof of the Weight of Financial Gain and Tax Evasion
Even though the Detroit Symphony orchestra was on strike for 23 weeks the organization that handles the donations to the organization has realized more than $450,000 in new and increased gifts.
That is because the relationship between the financial organization that accepts charitable donations and the Detroit Symphony Orchestra itself do not have a one-to-one relationship. The charitable fund in this case and in the case of the Museum of Modern Art in New York are not only responsible for providing a pool of money for some uses at their respective charitable locations but they also need to provide an income and return on those persons contributing money to the fund.
During this year’s annual fund campaign alone the Detroit Symphony Orchestra reported that it had raised about five million dollars of the 11 million dollars it hoped to collect this year. That is a direct result not of the symphonic excellence of the symphony but because of the unique arrangements of the charitable fund and the ability it has to act as a tax shelter and to allow wealthy donors to enjoy their personal gains and reduce or eliminate state and federal taxes at the same time.
It is like a pooling of resources. The older investors in the scheme are paid off by monies collected from later investors and from gains on the investments and donations of earlier investors.
During last year there were only 1,600 individual, corporate and foundation donors paying into the fund. This year there are more than 3,000. This is likely due to the advertising campaigns that funds like the one that collects donations for the Detroit Symphony Orchestra have successfully carried out. It also helps that accountants and clients have become well versed in these shadow funds that can hide their income and provide an income at the same time while avoiding taxation at the local, state and federal levels.
In one week the fund took in over one million dollars.
If you consider the number of funds like this in the country that are operating at any one time the amount of money that is being hidden from taxation dwarfs even the current mammoth financial failures that are going on in New York and have been occurring for the past two years.
Planned Giving for Planned Parenthood
‘Planned Parenthood Federation of America is the nation's leading sexual and reproductive health care provider and advocate.’
So it is said.
Information from 2006-2007 seems to indicate the following points :
Planned Parenthood’s income break-down for 2006-2007 fiscal year
Planned Parenthood clinic income: $356.9 million
Planned Parenthood Government grants and contracts: $336.7 million
Total profit: $114.8 million
Total income: $1.02 billion
2006 Planned Parenthood service numbers
Number of abortions (medical and surgical): 289,750
Total number of abortions per week: 5,572
Adoption referrals: 2,410
Ratio of adoption referrals to abortions: 1 per 120
‘Planned Parenthood’ is also involved in actively encouraging ‘Planned Giving’.
As has already been established this process has the potential for tax fraud. Like the quasi-religion that has grown up at the Metropolitan Museum of Art in New York another quasi-religion has grown up at ‘Planned Parenthood’. Whereas at the Metropolitan Museum of Art in New York the worship is centered on donating money to the ‘Temple of the Arts’ in order to gain eternal life the worship at ‘Planned Parenthood’ seems to be focused on the sacrificing of babies in order to achieve everlasting life.
They may be contacted at :
Planned Parenthood Federation of America
Office of Gift Planning
434 West 33rd Street
New York, New York 10001
212-541-7800 or
Toll-Free 800-319-7564
gift.planning@ppfa.org
Following are some of the items ‘Planned Parenthood’ is seeking for donation :
“You can make a crucial difference in the ability of Planned Parenthood to provide reproductive health care in the United States and abroad. Remembering Planned Parenthood in your will, a trust, or through an annuity is one of the most meaningful gifts you can give future generations.”
The above paragraph is offensive to me. ‘…reproductive health care…’ Since when does reproduction include the termination of the item being reproduced?
‘…one of the most meaningful gifts you can give future generations.’ – I don’t know how to address the audacity and horror contained in a sentence like that coming from an organization that has already extinguished several generations of human beings from societies the world over.
As at the Museum of Metropolitan Art in New York and the Detroit Symphony Orchestra there is a special group with special privileges and honors that a person providing a ‘gift’ to Planned Parenthood can become a member of. It is called ‘The Legacy Society’.
The definition of “Legacy” - anything handed down from the past, as from an ancestor or predecessor.
In the case of ‘Planned Parenthood’ the legacy seems to ensure that it will stop at the next generation to receive it.
‘Planned Parenthood’ like the Museum of Modern Art and the Detroit Symphony Orchestra and the tens of thousands of other non-profits that are using ‘Planned Giving’ schemes claims it is not providing legal advice, however, ‘Planned Parenthood’, like the others previously mentioned, clearly uses phrases like ‘…your attorney may wish to include language similar to the following…’
Here is some information referencing ‘Planned Parenthood Planned Giving’ :
The most common planned gift is a bequest through your will or living trust. You can arrange a gift of a specific amount, a percentage, or even all or part of the residuum of your estate. If you would like to make such a gift to Planned Parenthood Federation of America (PPFA), your attorney may wish to include language similar to the following:
"I give, devise, and bequeath to Planned Parenthood Federation of America, Inc., now or formerly in the City of New York, 434 West 33rd Street, in the State of New York, (dollar amount, percentage, or __ percent of the rest, residue, and remainder of my estate), to be used for its general purposes."
Giving Retirement Funds, Insurance Policies, and Bank or Brokerage Accounts
If you are interested in creating a legacy for Planned Parenthood, but have no interest in writing a will or trust, you can name Planned Parenthood as beneficiary of your
retirement account
insurance policy
bank or brokerage account
Retirement Funds
You can create a legacy by naming Planned Parenthood as beneficiary or contingent beneficiary of an IRA, 401 (k), 403 (b), Keogh account, or other retirement plan. When a retirement account is left to a charity, the organization does not pay the income tax otherwise due if left to a friend or family member. For very high net worth individuals, assets in these accounts may be taxed twice if they are part of your estate, resulting in asset depletion. To make such a gift requires completing a change of beneficiary form. There will be no fees involved, and it does not require any work on the part of an accountant or attorney. If you name Planned Parenthood as beneficiary, you can change your mind at any time by updating the change of beneficiary form. If you need help obtaining a change of beneficiary form, please contact us.
If you are married, please note that changing beneficiaries may require the permission of your spouse. There also may be additional tax and financial planning issues, so when considering these assets in your plans, you should consult your legal or financial advisor.
Insurance Policies
Life insurance may be used to create a legacy by naming Planned Parenthood as beneficiary or contingent beneficiary of the policy. This requires that you complete a change of beneficiary form with the insurance company. You do not have to work with an attorney or accountant, and there are no fees to arrange such a gift. If you name Planned Parenthood as beneficiary, you can change your mind at any time by updating the change of beneficiary form. If you need help obtaining a change of beneficiary form, please contact us.
Bank and Investment Accounts
You may name Planned Parenthood as successor to your bank or investment account in most states. The arrangement is known as TOD/POD or Transfer-on-Death/Payable-on-Death. This requires that you complete a form directly with your financial institution. You do not have to work with an attorney or accountant, nor are any fees involved to arrange such a gift. TOD/POD gifts are completely revocable — you may change your mind at any time by filling out a new form.
Giving Through a Donor Advised Fund or a Private Foundation
You can make gifts to Planned Parenthood from an existing donor advised fund or private foundation. If your donor advised fund ends upon your passing, you can arrange to name Planned Parenthood as the ultimate beneficiary. If your donor advised fund continues beyond your lifetime, you can name successors to oversee your donor advised fund and instruct them to make grants or contributions to Planned Parenthood in your memory. A spouse, child, or other descendant or representative can serve as a successor.
A donor of a private foundation may decide managing their foundation no longer fits their plans or that of their heirs. We are delighted to accept assets from a private foundation and would welcome questions regarding this matter.
Our staff can assist you as you consider making a planned gift to Planned Parenthood. Please contact us for assistance.
Make a Gift from Your IRA Account
The "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010" has extended the IRA Charitable Rollover for 2010 and 2011. Originally passed in 2006 as part of the Pension Protection Act, the IRA Charitable Rollover allows you to make direct transfers totaling up to $100,000 per year to charity without having to count the transfer as income for federal income tax purposes.
If you are 70½ or older, you are required to make minimum withdrawals from your retirement plans each year according to a federal formula. If you do not need these withdrawals for personal use, this is a great way to make a gift to Planned Parenthood Federation of America (PPFA). While you are not entitled to an income tax charitable deduction for the gift, the IRA charitable rollover will count towards your minimum required distributions for the year and you will not have to pay federal income tax on the withdrawn amount.
The rules for making a gift from your IRA:
• You must be 70½ or older at the time of the transfer and can give up to $100,000 (aggregate total) each year.
• If you and your spouse have individual accounts, you can each give from your accounts; doubling your family's possible gifts up to $200,000.
• Your gift must be made directly from the custodian of your IRA to PPFA. If you have retirement assets in a 401(k) or 403(b) you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the fund from the IRA directly to PPFA.
• Your gift counts towards your required minimum distribution.
• You will not pay federal income taxes on the withdrawal for the gift, so you cannot claim an income tax charitable deduction.
• To allow taxpayers to benefit from the law for 2010, Congress extended the deadline for 2010 gifts to January 31, 2011. Your IRA plan provider must make the transfer to PPFA on or before January 31, 2011 (for a 2010 gift) or December 31, 2011 (for a 2011 gift).
Please instruct your IRA plan provider to make a direct transfer from your traditional IRA or Roth IRA to:
Planned Parenthood Federation of America
Attn.: Office of Gift Planning
434 West 33rd Street
New York, NY 10001
Tax I.D.: 13-1644147
Certain states may not exclude gift amounts withdrawn from an IRA for state income tax purposes. When planning your gift, please be sure to check with your plan provider or tax preparer on whether your state of residence will tax your intended charitable distribution.
As most companies will not add your name to the reference on the check, please contact us via letter, phone, or email with your name, gift amount, and company when you request the rollover so we can identify the check from your plan provider.
For more information, please contact us at 800-317-7564 or gift.planning@ppfa.org.
Please take a close look at the advertisement for these following items. It declares :
“Gifts that give you income for life:”
Charitable Gift Annuities
Examples Given
"As a businessman, I established a Charitable Gift Annuity with Planned Parenthood because it's a smart move. At my age, my annuity provides me with an 8.6 percent fixed payment rate. My rate will never change, and the payments are guaranteed for life.
"If you want to have more cash now, to spend as you desire, while supporting a great cause, a Charitable Gift Annuity is a win-win project." — R.T.
Are you interested in making a meaningful contribution to Planned Parenthood today, supporting future generations tomorrow, while receiving fixed income for life, an immediate charitable tax deduction, and reduced capital gains tax? Then a charitable gift annuity may meet your objectives.
A charitable gift annuity is a special giving arrangement in which, in return for a gift of $10,000 or more (or $20,000 for two annuitants), Planned Parenthood provides guaranteed, fixed payments to you and/or another person for the rest of your lives. The rate of your payments is based on your age when the gift is made and will not change. A portion of your annuity payments may be tax-free, depending on the specifics of the gift. A charitable gift annuity also entitles you to partial income tax charitable deduction and may provide capital gains and estate tax benefits. After your lifetime, the remainder of your gift will support the work of PPFA or a designated Planned Parenthood affiliate.
Example:
Donor
one person, age 77
Amount of Gift
$20,000
Annuity Rate
6.7%
Annual Annuity Payments
$1,340 per year for your lifetime
Income Tax Charitable Deduction
approximately $9,145
Our staff can prepare personalized, confidential gift examples for you. If you would like more information, please contact us.
Charitable Remainder Trusts
"Over 20 years ago while working and traveling in India, I saw firsthand the social, economic, and political problems that result from unintended pregnancies. I’m passionate about the work of Planned Parenthood because it helps empower women so they can make informed decisions and improve their children’s lives. I established a charitable remainder trust to provide for my loved ones and leave a legacy for Planned Parenthood so it can help future generations. Everyone wins!" — T.C.
If you are interested in making a significant gift to Planned Parenthood that will provide benefits to you during your lifetime and leave a legacy for the future of family planning, a charitable remainder trust may meet your objectives. Charitable remainder trusts can be customized to meet your personal and family needs, particularly if you want to provide for a friend or family member during or after your life.
To establish a trust in the Planned Parenthood Charitable Remainder Trust Program, you would make an irrevocable gift of $100,000 or more for a distinct trust fund in your name. You would qualify for an income tax charitable deduction. If you make your gift with appreciated securities, you avoid the capital gains tax on long-term appreciation. Trusts can be set up to provide a fixed payment amount each year or a fixed percentage, with variable payments each year.
Example of a Charitable Remainder Unitrust:
Donor
two people, ages 80 and 75
Amount of Gift
$100,000
Income Tax Charitable Deduction
approximately $53,2000
Payment Rate
5% of trust revalued annually
Income
$5,000 in the first year. For subsequent years, the income is variable, based on an annual valuation. Your income can increase or decrease based on market conditions and performance.
Example of a Charitable Remainder Annuity Trust:
Donors
two people, ages 80 and 75
Amount of Gift
$100,000
Income Tax Charitable Deduction
approximately $46,000
Payment Amount
at least $5,000 or a fixed percentage of the initial gift
Income
a fixed amount each year that does not change
Our staff can prepare personalized, confidential gift examples for you. If you would like more information, please contact us.
Pooled Income Fund
If you are interested in making a special gift to Planned Parenthood and earning some income during your lifetime, a gift to Planned Parenthood’s pooled income fund may meet your objectives.
"Planned Parenthood is my favorite organization. If anyone is going to save the world, they are!" — E. W.
To participate in the Planned Parenthood pooled income fund, you would make an irrevocable gift of $5,000 or more, in return for shares in the fund. Your gift and that of others is invested in the Pooled Income Fund for the duration of your life. You will receive the income earned by the fund in proportion to the number of shares you own. All donors qualify for an income tax charitable deduction. If you make your gift with appreciated securities, you avoid the capital gains tax. Your annual income will fluctuate based on the fund performance. The income is taxed as ordinary income to you. Most importantly, you have established a legacy for Planned Parenthood or one of our affiliates.
Example:
Donor
one person, age 80
Amount of Gift
$10,000
Income Tax Charitable Deduction
approximately $7,200
Payment Rate
variable, based on earnings
First Year's Income
$400 estimated, income can increase (or decrease) in future years.
Our staff can prepare personalized, confidential gift examples for you. If you would like more information, please contact us.
