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What is an Endowment Fund?
New Ulm Area Foundation has been in existence for over 30 years. It is safe, it is secure, and it is an “endowment fund”.
What is an endowment fund? The most common trait of an endowment fund is that only income generated by the capital investments is available to the organization. Thus, growth of the financial assets is assured, while its income is used toward fulfilling its mission, both necessary operations and granting.
When you make a gift to New Ulm Area Foundation, your donation is deposited and put to work with the advice of a local investment manager, and with regular reviews by our Board of Directors’ Finance Committee. This facilitates increased local oversight.
Unlike a donation to some charitable organizations which might provide a one-time benefit, your gift to New Ulm Area Foundation will provide consistent and on-going granting opportunities into perpetuity.
Your donation to New Ulm Area Foundation truly is “the gift that keeps on giving!”
More Reasons to Donate
- You want to give back to the community that has given you so much; a safe place where you grew up, a place to raise your family or a community that has supported your business.
- You are passionate about one or more of our focus areas; arts, education, economic development or historical preservation and want to see that your interests are always addressed in the community.
- You want to honor the memory of someone who has passed.
- You want to acknowledge a living person or event (e.g. birthday, anniversary, retirement, etc.) in a meaningful way.
Ways to Donate
Here are a few ways to donate to New Ulm Area Foundation:
Outright Donations
- Cash gifts
- Real Estate
- Securities
- Personal Property
- Grain
Deferred Gifts
- Bequests
- Life Insurance
- Trusts with charitable provisions
What is a Charitable Remainder Trust?
If you have an appreciated asset such as land, farm machinery, grain or stock, selling it through a charitable remainder trust (CRT) allows you to gain a lifetime income stream while avoiding capital gains tax upon the sale.
A CRT is an irrevocable trust that provides for two beneficiaries. An income beneficiary (usually the donor and their spouse) receives a set percentage of income from the trust for life or a term up to 20 years. A named charitable beneficiary (which could be one or more organizations and be changed at any time) receives the remaining principal of the trust after the income beneficiaries die.
If you sold a highly appreciated asset to create retirement income, you would pay capital gains tax (federal and state) on the difference between your tax basis in the asset and the sale price. By creating a CRT, transferring the asset to the trust and selling the asset through the trust, you will have:
- Converted an appreciated asset into lifetime income
- Reduced the current income taxes with a charitable income tax deduction (which can be carried forward for five years)
- Paid no capital gains tax when the asset was sold
- Reduced or eliminated estate taxes
- Gained protection from creditors for the gifted asset (with some limitations)
Meeting with a qualified estate planning attorney and/or financial planner is the first step to take if you are considering if a CRT fits into your charitable planning.
How to Donate
If you are considering a gift to New Ulm Area Foundation, we would be happy to work with you to help meet your philanthropic goals.
We can arrange for a gift planner that will help you work with your bank, attorney and finance people at no charge to make your donation exactly how you want it and the process as seamless as possible.
There may be important tax advantages associated with direct transfer of some assets, such as stock real estate, securities or grain to a registered nonprofit organization. If you want help with any of these donations, please feel free to call our Executive Director at 507-354-3337 or any of our Board members listed on the About Us page.