Donations: Gift Types

Outright Gifts

An outright gift is just what its name implies, a gift transferred immediately from you to the NC A&T University Foundation. This category can include cash, securities, tangible personal property (gifts-in-kind) or real estate.

Gifts of Cash

There is no easier way to earn a charitable deduction and support the NC A&T University Foundation at the same time than by simply writing a check! A gift of cash (or, of course, by check) is the most popular type of charitable gift. The gift is considered made on the date it is hand-delivered or a check is mailed (postmark on envelope). A contribution on a credit card can be deducted when the charge is made even though the bill is not paid until the following year.

You can also make a gift through an automatic bank draft. Because of the availability of the income tax charitable contribution deduction, the net cost to you of a cash gift is lower than the face value of the gift.

If you itemize, your cash gift is fully deductible for federal income tax purposes up to 50% of your adjusted gross income. If your total gift should exceed this limitation, the excess may be carried forward for tax purposes for up to five additional years.

Matching Gifts

A number of businesses and corporations now have programs to match employee gifts of cash either in whole or in part. Ask your employer about it. If your employer or parent company has a matching gift program, your personal gift to the NC A&T University Foundation may be matched or in some cases doubled or more. In some cases, gifts from spouses and retired employees are also matched. We urge you to explore this possibility.

To find out about this program simply contact your Human Resources Department and ask them if they have a matching gifts program, and ask for the procedure and the associated forms your company uses for this purpose.

Giving Gifts of Appreciated Assets

Giving appreciated assets offers you two-fold tax savings. First, you avoid paying a capital gains tax on the increase of value of your asset. Secondly, you will receive a tax deduction for the full fair market value of the asset on the date of the gift. For income tax purposes the value of such gifts may be deducted up to 30% of the adjusted gross income with an additional five-year carry forward.

A contribution of long-term appreciated assets to the NC A&T University Foundation entitles you to an income tax charitable deduction equal to the fair market value of the securities at the time of the gift. You also avoid capital gains tax on any appreciation of those securities.

Gifts of appreciated assets are fully deductible up to 30 percent of your adjusted gross income for that year. Any excess of the 30 percent deduction can be carried forward up to five additional years.

 An example of an appreciated asset would be:

  • When making a gift of long-term appreciated assets,you save twice on income tax and capital gains tax, you get a charitable deduction for the full fair market value of the gift. You save the capital gains tax that would otherwise be payable upon the sale of an appreciated asset.

Donor in 28% tax bracket gives stock or property that costs - $20,000 and is now worth - $100,00

Donor obtains an income tax deduction for the property's current fair market value $100,000

Which produces income savings of (100,00 x 28) $28,000

Plus capital gains tax savings of ($80,000 20%) $16,000

Total tax savings - $44,000

Net cost of gift - $66,000

Gifts of Closely-Held Stock

If you contribute closely held stock to NC A&T University Foundation, you are allowed an income tax charitable contribution deduction for the fair market value of the stock; you also will avoid the potential capital gains tax on any appreciation in the value of the stock. At a later date, you or the corporation may offer to purchase the stock from NC A&T University Foundation for cash.

As long as the NC A&T University Foundation is not legally obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.

Closely-Held Stock Example

  • Consider the example of Mr. Drake and assume that the corporation's fair market value is $1 million (please note that valuation of closely-held stock is sometimes difficult and may require an appraisal) there are 1,000 outstanding shares worth $1,000 each and Mr. Drake wants to contribute $10,000 to charity.

o Option 1: Mr. Drake can sell some of his stock to his corporation for cash. But the proceeds of this redemption will probably be treated as a taxable dividend to him. Thus, in his 36 percent tax bracket, he would need to sell approximately $15,600 worth of stock to have $10,000 to make the gift.

o Option 2: Mr. Drake can contribute 10 shares of stock to the NC A&T University Foundation. This gift will provide Mr. Drake with a $10,000 income tax charitable contribution deduction and avoid capital gains tax on any appreciation. At a later time, th corporation can request to buy back the stock from the university.

If you are considering selling or liquidating a closely held corporation, you should contribute shares of the corporation to the NC A&T University Foundation before the negotiations are finalized. The University then participates as a shareholder in the sale or liquidation. You are entitled to an income ax charitable contribution deduction equal to the fair market value of the securities when donated (inevitably, an appraisal has or is about to take place, facilitating valuation of the securities). In addition, you avoid capital gains tax on appreciation.

In-Kind Support

Intangibles such as services and intellectual property can provide excellent giving opportunities. If you operate a business that can supply goods or services to the NC A&T University Foundation, the value of the goods or services will be considered an In-Kind Gift and gift credit will be given as any other type gift to the University.

Alumni have contributed graphic design services, printing, artwork, catering services, and much needed consulting services. An example of this type of support is the recent gift of furniture from a major Research Triangle Park corporation.

Corporate Support

Many of the corporations in the nation support educational causes. These organizations are an excellent source of funding for many projects and programs at the NC A&T University Foundation. If you have contacts within a corporation that is not supporting the NC A&T University Foundation or know people that do have contacts in such a corporation, we can use your help.

You can ask the corporate contact questions to determine their giving strategy and get a name of an individual we can work with to establish a relationship with the NC A&T University Foundation. Just pass the information onto us in the Foundation Office and we will follow up on the contact.