Planned Gifts for Scouting
In addition to gifts made during the donor's lifetime, the BSA
Foundation can accept a wide range of planned gifts.
Gift Transfer Instructions
Bequests are the simplest way to make future – and revocable –
gifts to the Foundation. The key to making effective bequests is
precise language accurately identifying the charitable recipient and
the donor’s intent. Donors may choose to make gifts in the form of: a)
an exact dollar amount, b) a percentage amount, or c) a portion of the
residual estate or trust. They may also name the Foundation contingent
beneficiary of an estate.
Either the Foundation staff or National Major Gift Counsel can
also provide sample bequest provisions to your professional advisors in
drafting suitable bequest language on a confidential basis, without
requiring the advisor to identify the donor.
National Foundation Sample Bequest Clauses
Local Council Sample Bequest Clauses
Almost half of all personal wealth in the U.S. comes from real
estate. This is particularly true for older donors whose homes have
greatly appreciated in value over the years. In these situations, a
life estate may enable a donor to give generously to Scouting and also
achieve significant income and estate tax benefits.
A life estate is basically a deed restriction. It gives the
donor the right to use a personal residence (or farm) for life, or a
specified term, with the remainder interest passing to the BSA
Foundation. The most common property used for life estates is the
donor’s primary residence, though second homes may also be used.
Creating a life estate gift generates an immediate income tax
charitable deduction for the net present value of the remainder
interest in the property. This type of gift also removes the real
estate from the donor’s estate, potentially reducing estate taxes. Some
donors will even use their income tax savings to purchase life
insurance, thereby replacing the value of the donated property for
Though a life estate irrevocably conveys the remainder
interest in the property to the Foundation (to be used as the donor
requests), these arrangements do offer some flexibility. For example,
the donor might decide to enter a retirement community. The donor could
then rent the property and receive the income. Or the donor and the
Foundation might agree to sell the property and divide the proceeds
during the donor’s lifetime, according to their respective interests.
Retirement Plan Beneficiary Designations
Retirement plans, including IRAs, 401(k) plans, 403(b) plans,
Keoghs, and SEP plans, can be effective assets to use for testamentary
Many people choose to name their heirs as beneficiaries on
retirement plan documents. However, for donors with charitable
intentions, this may not be the wisest course of action from a tax
planning perspective. Assets in retirement plans can be hit with both
income and estate taxes if left to anyone other than the surviving
spouse. These funds are considered “income in respect of a decedent,”
or IRD, so any individual beneficiary (again, except for a surviving
spouse) is required to pay income tax on the distributions.
Donors can avoid this “double taxation” by designating the
Foundation as the beneficiary of all or part of the plan's assets. As a
qualified public charity, the Foundation does not pay any tax on the
distribution. The donor may then leave other assets that are taxed more
favorably to family and non-charitable beneficiaries.
A sample IRA beneficiary designation and letter to an IRA plan
administrator is available from the Foundation.
Charitable Remainder Trusts
A charitable remainder trust (CRT) enables the donor to
irrevocably give cash or property to the trust while retaining an
income stream, either for life or for a specified time period. The
donor may also select someone else, such as a spouse, parent, or child
to receive the payments.
The CRT terminates either on the death of the named
beneficiary or at the end of the specified term. The appreciated
principal then passes to the Foundation to grow in a fund established
by the donor. Some of the benefits of a remainder trust:
Allows donor to convert non-productive assets into an
Generates immediate tax deduction for contribution to the
trust, and avoids capital gains tax on the sale of appreciated property
by the trust
Pays annual distribution to the donor or other
beneficiaries selected by the donor
Very flexible in structuring the amount and timing of
income payments to the income beneficiaries (either for life or a term
Donor can designate future use of gift proceeds through
the Foundation to the local council or Scouting program of his or her
There are two basic types of charitable remainder trusts:
annuity trusts (CRATs) and unitrusts (CRUTs). The primary differences
between these two types are the method used to determine the payments,
and the annual valuation requirement.
In an annuity trust, a specific, fixed annual income is paid
to the donor or other beneficiaries. The income beneficiaries receive a
constant annual payment, regardless of value fluctuations of the trust
assets or the actual return on the trust assets. In contrast, the
unitrust pays a specified percentage of the net fair market value of
the assets. The trust is revalued annually for income purposes, so the
annual income will typically fluctuate based on fund performance.
There are many variations on these trusts. You may want to
discuss these with one of the National Major Gift Counsel or the BSA
A charitable lead trust (CLT) is the “mirror image” of a
charitable remainder trust. It is a trust that generates income for
Scouting first, and then transfers trust assets either to the original
donor or to the donor’s family members. The donor transfers cash or
property irrevocably to a trust, creating an income stream to the BSA
Foundation for a certain number of years. At the end of that period,
the principal either reverts back to the donor or passes to
non-charitable beneficiaries, such as the donor’s children,
grandchildren, or great-grandchildren.
If persons other than the donor receive the remainder of the lead
- Donor receives a federal gift or estate tax deduction for
the present value of the payments given to the BSA Foundation.
- Taxable income and capital gains realized annually by the
trust are taxed to the trust.
- The principal ultimately passes to non-charitable
beneficiaries either outright or in a continuing trust.
- The present value of the assets passing to non-charitable
beneficiaries is a gift for gift tax purposes or is included in the
estate for estate tax purposes.
If the donor receives the remainder of the lead trust:
- Donor obtains a current income tax deduction equal to the
present value of the total payments to the Foundation.
- Taxable income and capital gains realized annually by the
trust are taxed to the donor
Lead trusts are ideal vehicles for making significant
charitable gifts and transferring assets with high growth potential to
the next generation. It may also be appropriate to fund a lead trust
with income-producing real estate interests, oil and gas interests, or
closely held stock and ultimately transferring these assets to future
BSA GIFT ANNUITY PROGRAM AND POOLED INCOME FUNDS
Some donors want to make a major gift to Scouting, but don’t
want the ongoing responsibility of an advised fund, or can’t afford the
minimums required for charitable trusts. The simplicity of a charitable
gift annuity or a pooled income fund gift may be just what they need to
meet their objectives.
The BSA Gift Annuity Program
allows donors to make a gift to Scouting and, in return, receive
lifetime income – part of which is tax free – and a current charitable
income tax deduction. The annuity rate is guaranteed by the general
assets of the Boy Scouts of America, established at the time the gift
annuity is created, and will not change for the duration of the gift
annuity. Some donors choose to create a gift annuity (and a stream of
income) for a spouse or other family member. When the gift annuity
ends, after the lifetime of the annuity recipients, the remainder goes
to the local council(s) chosen by the donor. Larger gift annuity
remainders could also be designated to the BSA Foundation to create a
named fund in perpetuity.
The minimum gift to establish a gift annuity is only $2,500.
The donor may use cash, stocks, bonds, or mutual shares to make the
gift. Annuity beneficiaries must be at least 50 years of age at the
time the gift annuity is established, and most donors want their
annuity payments to begin immediately. Many donors also choose a deferred
gift annuity – they get a tax deduction now, but delay the
annuity payments until a later date when the income is most needed
(e.g., at retirement).
The BSA Pooled Income Fund Program
is similar to the gift annuity program, but is more like a “charitable
mutual fund.” Donors contribute to the pooled fund and receive
“investment shares” in the larger pool. They receive lifetime income
and an income tax deduction in return for their gift. At the end of the
lifetime of the beneficiary (or beneficiaries), the “shares” are cashed
in with the proceeds going to the local council(s) of the donor’s
choice (or, again, to establish a new Fund at the Foundation).
The minimum gift to participate in the pooled income fund is
$5,000. Donors may add to their gift in $1,000 increments at any time –
each addition increases their annual income from the fund and generates
another tax deduction. Donors may use cash, stocks, bonds, or mutual
shares to make the gift. Pooled fund beneficiaries only need to be 40
years of age at the time of the initial gift.
There are two differences between the income stream from the
pooled fund and the income from a gift annuity. First, unlike the gift
annuity, pooled fund income will not be partially tax-free. Second, the
income stream from the pooled fund will vary from quarter to quarter,
based on the actual investment performance of the fund.
COMPARISON OF DONOR GOALS WITH PLANNED
Typical donor goals
Income to donor or others
Income tax deduction
Capital gains and estate taxes
Attractive funding assets
Estate tax reduction
Provide for favorite Scout councils or programs
(But will reduce estate tax for large estates that owe
Reduce income taxes
Provide for Scouting
Residential real estate
Retirement plan beneficiary designation
Provide for charity while treating heirs equitably
No (unless pursuant to Pension Protection Act of 2006,
and may avoid income tax compared to other gifts)
IRAs, other qualified plan assets
Charitable remainder trust (Unitrust or Annuity
Create income for self or others
Establish permanent charitable legacy
Variable (CRUT) or Fixed
Yes, based on value of assets contributed, minus present
value of income payments
Appreciated low-basis stock or real property
Appreciated real property (if CRUT is selected)
Charitable lead trust
Transferring assets to another generation (non-grantor
Income tax deduction (grantor trust)
Yes, income to charity or fund in BSAF
No (non-grantor trust)
Yes (grantor trust, but donor taxed on income stream)
Estate taxes are avoided, but gift tax may be due
Income-producing assets that are likely to greatly
appreciate in value, or will be passed to children (e.g. shares in
Gift annuities and pooled income fund gifts
Potentially increasing current income from existing
Simple, affordable way to provide an endowment gift to a
Yes, either predictable and part tax free (gift annuity)
or a variable income stream (pooled fund)
Yes, for both.
Appreciated stocks with low dividends, or cash that
could be invested for higher returns.