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Guide to Making Your Gift
The Northern Michigan University NMU Foundation is registered with the Internal Revenue Service (IRS) as a non-profit charitable organization established to solicit contributions for Northern Michigan University. Gifts to the university are tax deductible under current IRS regulations, subject to the limitations placed on charitable gifts. For residents of the State of Michigan, these gifts also qualify the donor for a state tax credit.
NMU Foundation staff can discuss the giving opportunities available to you. Our staff will work with you to structure your gifts so they have the greatest positive impact on the university. Each type of gift may have tax advantages or disadvantages associated with it. We do advise that you consult your personal legal and financial advisers regarding specifics of your own financial situation.
How can I make a gift to the university?
There are many ways in which alumni and friends can make gifts to Northern Michigan University. These include:
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Gifts of Cash and Pledges
The most common gift made to the University and the easiest to make is a gift of cash in the form of a personal check, a money order or a credit card charge. The university also offers a secure Web site for making gift transactions and an option to make automatic electronic fund transfers from your banking account to ours. Gifts may be pledged for payment over a period of years. For the accuracy of your records and those of the university, pledges should be made either in writing or by means of a pledge card.
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Gifts of Stocks and Bonds
Many donors make gifts in the form of appreciated securities in order to benefit from tax advantages. You can receive an income tax deduction equal to the fair market value of the securities, as well as reduce - or eliminate - capital gains taxes on the transfer to the university.
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Gifts of Personal Property
Valuable collections, such as works of art, rare books, paintings or antiques, can be subject to estate taxes. By donating such items during your lifetime, rather than at your death, you not only reduce your taxable estate but also reduce your taxable income in the year of the gift.
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Gifts of Real Estate
Real estate can be a valuable gift to Northern Michigan University.
A deed transfer is the most common way to make a gift of real estate. An outright gift of real estate provides the donor with a charitable income-tax deduction for the fair market value of the property, while also freeing the donor from real-estate taxes, as well as maintenance and insurance costs.
Another option is a bargain sale, which is part gift and part sale. The university purchases the property for an amount less than the appraised value. The difference between the fair market value and the purchase price is considered a gift for which the donor is entitled to an income tax deduction.
There are even methods by which you can contribute your current home now and still reside in it for life.
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Gifts of Life Insurance
You may make a gift of life insurance to the university by naming it as owner, primary or successor beneficiary, or irrevocable beneficiary, of a whole life policy. The gift may be a paid up policy, an existing policy with cash value, or a new policy.
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Gifts That Provide Income
You may wish to make a substantial gift to the university but feel you cannot afford to give up the annual income produced by the asset. We can outline several ways to help you make a gift, while retaining an income for your lifetime or the lifetime of others.
While the benefits vary, these arrangements share several attractive features:
- Income for life paid to you and/or another beneficiary, such as your spouse.
- Increased income (if the gift is made to a life income plan that produces a higher yield than the donated asset).
- An immediate federal income tax deduction for a portion of the gift's value.
- Elimination of capital gains tax at the time of transfer (if the asset is in the form of securities or real estate that have appreciated in value).
A charitable gift annuity allows a donor to make a gift and receive income for life. Upon the death of the donor's designated beneficiaries, the remaining funds become available to the university to support the named endowment.
Through a charitable remainder unitrust, a donor receives a fixed income for the trust's term. A charitable remainder trust provides a variable payment, and could be considered a possible hedge against inflation.
A charitable lead trust is essentially the reverse of a charitable remainder trust. Rather than receiving the trust's remainder value, the university receives the trust's income for a specified period. At the end of this period, the property either reverts to the donor or to a non-charity beneficiary designated by the donor. Established during a donor's lifetime or through a will, charitable lead trusts are best for donors who can forego the income generated by the property for the trust's period of existence.
Matched Gifts
Many companies encourage their employees to make charitable gifts and may match personal donations with an equal or greater contribution. Rules about the type of gifts that companies will match vary. Donors should check with their appropriate human resource department at their company to see if a gift qualifies for a corporate match.
Annual Tax Reporting
The NMU Foundation provides all donors with an annual gift giving report that summarizes for tax purposes all contributions to the university. This summary lists the amounts of cash donations and a description of property donations and the programs supported by these contributions.
Important Information About Paying by Check
When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. When we use information from your check to make an electronic funds transfer, funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution.
May We Be of Assistance?
If you have any questions or would like to talk to someone about a giving opportunity please contact the NMU Foundation at (906) 227-2627 or send us an e-mail at foundtn@nmu.edu.
