Financial Contributions & Endowment

Introduction

Third Church's Endowment Fund was built by gifts, large and small, from our members who have gone before us. They have given for so many personal reasons - to make perpetual their personal participation in the congregation's work in this community; because they knew that our inspirational place of worship can never be replaced at future costs and so must be maintained with help from those who have built and loved it in the past; or because they know that our aspirations for outreach funds may always be just beyond reach and that an endowment gift's additions will therefore always be needed and put to the best possible use.

In the church's budget for 2002, the traditional 8% endowment withdrawal would fund 29% of the budget; however, Session approved an additional withdrawal to balance the budget which, if needed, will raise that figure to 33.5% of our annual budget for operation and maintenance. Are those funds releasing the present members from the obligation to better serve this Church? Not in the least. We simply have an extra group of "members" who are joining in today's work. Third Church would be a far lesser place without the gifts of these prior members who were called to serve in their time - and who continue to serve.

This brochure sets out many ways in which you might consider adding to this Endowment. There are tax benefits to consider, and increase-of-income benefits, and - oh, yes - the wonderful benefit of knowing that you have made an act of faith for the perpetual benefit of your church and your community.

Outright Gifts

Appreciated Securities

Stock or mutual fund shares that have gained in value can be transferred to the church as is, rather than sold. You will receive an income tax deduction based on the full fair market value, and will never have to pay tax on the capital gain.

Life Insurance Policies

You may find that you have a life insurance policy that once protected your family against loss of its breadwinner, but which is no longer needed for that purpose. If the policy is given to the church, you will receive an income tax deduction for its cash surrender value.

Real Estate

Realty that has become a burden can be given to the church. A tax deduction is allowed for its appraised value, and capital gain tax will be avoided. Because of environmental and other concerns, it is necessary to discuss the possibility with the Trustees' delegate, to secure advance acceptance, but appropriate parcels will be welcome gifts.

Cash

A number of gifts in the past have occurred when, and because, the donor had received an unexpected bequest or other financial windfall and wished to share the blessing as an Endowment gift. Others have sent a check in memory of dear friends or family. Still others have recognized that they should not give depreciated assets: sell first to obtain the tax loss, and then contribute the cash proceeds of sale.

Deferred Outright Gifts

Last Will and Testament

Every Third Church member should have a Will and keep it current. Without that, you have no assurance that New York law will distribute your property just as you would wish in all foreseeable contingencies, or that you will get exactly your choice of person to administer the estate, or that potential infant, aged or disabled beneficiaries will be protected efficiently, or that the plan will take advantage of available estate tax saving techniques. As you think through your wishes, please consider adding a bequest "to the Third Presbyterian Church, Rochester, New York, for addition to its endowment."

Life Insurance, Retirement Benefits

Life insurance policies, annuity contracts and retirement plans (pension, 401K, IRA's) all pay out future funds in accordance with beneficiary designations. You can name the church as beneficiary, either primary and certain, or as the contingent beneficiary in the event that your individual beneficiaries fail to survive to the time for distribution. Such gifts will be free of estate tax. Indeed, if you intend to make gifts at death to both individuals and the church, and the question is which gifts to make from cash or property of your estate, and which by IRA or other plan designation, the church gift should be by the designation. Individuals receiving plan payments must pay income tax, whereas estate assets pass to them free of that tax. Plan gifts to the church are free of income tax.

Residence, with Retained Use

Your residence at the time of death will usually be an asset that your children will not want to keep and will find inconvenient to deal with. It could therefore be an excellent choice for a gift to the church by your Will. Even better, however, would be to deed the "remainder" to the Church now, retaining the use for your life or lives. You will receive a valuable income tax deduction for the remainder value. You and the Church would make an agreement now to cover the questions of which party is responsible for what costs during lifetime and what should happen if the time comes to make other living arrangements.

Deferred Gifts with Important Benefits to the Donor

A number of gift options make payments for life to the donor or other beneficiary, with Third Church receiving the fund balance on termination. In each case: the gift gives an income tax deduction; funding with appreciated assets avoids or defers capital gains tax; and each can significantly increase a donor's current income.

Charitable Gift Annuity

The Presbyterian Church (U.S.A.) Foundation provides gift annuities for Third Church. In return for a gift, large or small, the Foundation gives its promise to pay a fixed dollar annuity to the named recipient(s) for life. The payout is set by the present age(s) of the payee(s) from tables for the year of gift. The 2002/3 tables yield the equivalent of 6.7% of the gift value for a donor age 65, 7.9% age 75, 10.4% age 85, etc. Each payment is only partly ordinary taxable income, the rest split between favored capital gain and nontaxable. An annuity payout should not be affected by market drops.

Charitable Remainder Trusts

A trust can be drafted to the donor's needs, especially for personalizing investment control. The annuity trust form pays a fixed annual amount (not less than 5% of the initial gift value). The annuity will normally be set at less than a Charitable Gift Annuity would pay on a similar gift, but the income tax deduction will be higher and the church's remainder should be larger. The unitrust form pays the named beneficiary a selected percentage (not less than 5%) of the trust value, revalued each year. If and as the asset values increase over time, the annual payout will increase, thus giving protection against inflation. These trusts are generally not for small gifts. At $30,000 and up one can be set up through the Foundation, but for full personalization it would likely take a $200,000 fund to make it economic.

Pooled Income Fund

For gifts of $2,000 and up, where potential for growth of income over time is desired, various pooled fund options of the Foundation are available. Many donors' gifts are merged for investment by the Foundation, which then pays to each donor his or her pro rata share of the actual fund income each year.

Restrictions and Conditions

Gifts made "for endowment" permanently prohibit the spending of the capital, but the income, as provided by law, may be used as the Session and Trustees see the needs from time to time. Gifts made with conditions or stated restrictions as to use can be problematic: they may be too inflexible or too costly to administer and therefore may have to be refused. Accordingly, any proposed restriction on use (unless very broad, e.g., "for building maintenance", "for the music fund", "for outreach") should be discussed in advance.

A Final Word

Third Church cannot give legal or tax advice, for which you should consult your own advisor. However, there are volunteer members of the church who are knowledgeable about the giving techniques described in this brochure. They will willingly help you with your questions or further details, or can discuss special situations such as real estate gifts or gifts with conditions or restrictions. Call John Wilkinson at 585-271-6537, ext. 105 or jwilkinson@thirdpresbyterian.org to arrange a call or meeting. Or, further detail on particular ideas can be mailed to you if you will complete the request at the bottom of this page and return it by mail or by placing it in the offering plate.

Lilian Alexander Circle By inviting those who include Third Church in their planned giving to join the Lilian Alexander Endowment Leadership Circle, we honor our past as we prepare for our future. Lilian Alexander served with distinction on the Third Church Session. She authored the overture, approved by the Presbyterian General Assembly in 1955, that paved the way for women to be ordained to Presbyterian ministry. Third Church seeks to recognize those who have made commitments to planned giving. If you have arranged to make a deferred gift that is expected to take effect sometime in the future, please consider telling us of it now, on the reverse side, in order that your act may serve as testimony and inspiration to others to do the same. Thank you so much.