How to leverage your gift
Savvy donors often look for ways to use their giving as a means to unlock more gifts. It's a way to leverage their gifts in order to make an even greater impact on Michigan Tech. Here are three leveraging concepts you may want to consider as you plan your next gift.
Establish an endowment fund
Michigan Tech Fund endowments are protected funds set aside to provide a perpetual flow of income. Only the income, or a portion of it, is used to meet the purposes of the fund, whether scholarships, fellowships, department chairs, or another designated University program. By establishing such a fund, the donor creates a depository for further funds from others who may have similar interests.
The appeal of an endowment can be enhanced by naming it after a person of wide influence, perhaps a well-loved professor. As word about the new fund spreads, others who are also interested in the designated purpose will be inclined to support the endowment. Or, an endowed fund can be set up in a family name so other family members will have a reason to contribute to Michigan Tech. In short, a well-constructed endowment can significantly leverage one's initial gift.
Growth Illustration of an Endowed FundGive appreciated securities
The easiest way to leverage your gift to Michigan Tech is to maximize the tax benefits. Instead of selling shares of appreciated stock, paying capital gains tax on the appreciation, and making a gift of the remainder, a donor can give the shares directly to the Michigan Tech Fund. Since the Fund is a qualified charitable organization, it can sell the shares and keep the full amount—no tax due. The donors receive credit for the full amount of the gift and can apply it as a charitable income tax deduction on their annual tax form.
Convert assets to income for you and Michigan Tech
Another tax-wise giving option is a life income gift. This is an effective way to contribute assets to the Michigan Tech Fund while still keeping an income for yourself and others. The Fund offers a full range of life income gifts. The three main types are charitable gift annuities, charitable remainder trusts, and pooled income funds. Selecting the best option depends on the donor's age, assets, and income objectives. Donors have the following benefits of life income gifts:
- Immediate income tax savings
- No immediate capital gains tax ongifts of appreciated property
- Possible increase of current incomeby converting low-yielding assets
- Removal of assets from your taxable estate
- Future support of the MichiganTech program(s) of their choice
Many Michigan Tech alumni and friends have used a life income gift to further their charitable and financial goals. Two great examples are profiledin this annual report. Read about David and Joy McBride and Donald and Joyce Lehman.