Ways to give
BLOCS connects businesses and individuals with Philadelphia-area families in need, in order to forge financial pathways toward scholarship assistance, thereby expanding educational opportunities for their children.
Corporations and individuals can help us fulfill our mission to provide families seeking private or faith-based education access to these schools as a safe alternative to public schools in a variety of ways.
While there are many giving options to choose from today, your age, income and overall legacy goals may dictate which gifts options are best for you. As always, consult a tax advisor to determine which of the following, or combination of the following best fit your and your family’s individual needs.
Outright Cash Giving
By making a cash gift by check, credit card or money order today, you enable BLOCS to meet our students’ most urgent needs and carry out our mission on a daily basis. You will have the opportunity to see your generosity in action and will also receive a federal income tax charitable deduction.
Tax Credit Program
Through the establishment of Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, donors can receive up to a 90% tax credit against their Pennsylvania state tax liability by making their gift through BLOCS.
An individual or company who wishes to take advantage of this tax credit program, may become a member of a BLOCS Scholarship LLC (“LLC”). These special purpose entities (or SPE’s) are the only financial vehicle available for individuals (or companies who do not have direct tax credit approval) to be able to realize tax credits in return for scholarship donations.
To join, an individual or company makes a 2-year commitment, (minimum of $5,000 per year), to fund the LLC. The LLC will then receive tax credits equal to 90% of the donation amount.
Gifts of Appreciated Securities & Mutual Funds
Making a gift of securities or mutual funds that have increased in value and have been held for more than one year offers you the chance to support BLOCS’ mission while realizing important benefits for yourself. A donation of appreciated securities or mutual funds can reduce or even eliminate federal capital gains taxes on the transfer. You may also be entitled to a federal income tax charitable deduction based on the fair market value of the securities at the time of the transfer.
Bequests of Wills and Estates
Donors can bequeath a portion or the entirety of their estate to BLOCS. Gifts made by bequest are revocable and can be accessed as assets or income at any point until the will is final. In as little as one sentence, you can complete your gift. This type of donation to BLOCS through your will or living trust helps ensure that we continue our mission of educational excellence for years to come. Sample language to be included in a will is as follows:
“I, [name], of [city, state, zip code] give, devise and bequeath to BLOCS __________ ($) [specific amount] [OR] ___________ percentage (%) of the rest, residue and remainder of my estate for the general purposes of BLOCS.”
To Support a Specific School or Purpose
“I, [name], of [city, state, zip code] give, devise and bequeath to BLOCS __________ ($) [specific amount] [OR] ___________ percentage (%) of the rest, residue and remainder of my estate for thebenefit of ______ (specific school or program).”
Beneficiary designations can provide increased estate planning flexibility. You can use beneficiary designations with:
Retirement Plans (IRAs, Pensions & Profit-Sharing Accounts)
When IRA assets are given through an estate, the value is included in the estate’s assets, but the full charitable deduction offsets the value, therefore no estate tax is due. If IRA assets are left to heirs, they can be subject not only to estate tax, but also income tax, thus reducing a significant portion of the IRA’s value.
IRA Required Minimum Distributions
Required minimum distributions, (or RMDs), are amounts that U.S. tax law requires one to withdraw annually from traditional IRAs and employer-sponsored retirement plans. While all RMD’s have been suspended for 2020 due to the passing of the Federal Coronavirus Aid Relief, and Economic Security (CARES) Act, typically retirees must take your first required minimum distribution for the year in which you turn age 72, (70 ½ if you reach 70 ½ before January 1 of that year). If you reach 70½ in the current calendar year, you must take your first RMD by April 1 of the year after you reach the age of 72.
If you are age 70 ½ or older, you may be eligible to take tax-free IRA distributions of up to $100,000 per year and have these distributions paid directly to certain charitable organizations. Special tax rules may apply. For further detailed information, you may obtain IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), from the IRS or refer to the IRS website at www.irs.gov. Your wealth management adviser can facilitate a Qualified Charitable Distribution from an IRA. Please note that you must keep records of your contribution, as the Tax Form 1099-R does not differentiate between charitable and non-charitable distributions.
Simply contact your retirement plan administrator, insurance company, bank or financial institution for a change-of-beneficiary form, decide what percentage you would like BLOCS to receive and return the completed form to your plan administrator.
Charitable Remainder Trusts
If you are looking for additional ways to receive reliable payments, consider a charitable remainder trust. These types of gifts may offer you tax benefits, including up-front capital gains tax elimination if you fund the trust with appreciated assets, and the option for income. There are two ways to receive payments and each has its own benefits:
- The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
- The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is determined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
Charitable Lead Trusts
Through a charitable lead trust donation, you can benefit from the tax savings that result from supporting BLOCS without giving up the assets you would like your family to receive.
There are two ways that charitable lead trusts make payments to BLOCS:
- A charitable lead annuity trust pays a fixed amount each year to BLOCS and is more attractive when interest rates are low.
- A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust’s assets go up in value, for example, the payments to BLOCS go up as well.