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Glossary of Terms
Useful Links
Glossary of Terms
Actuarial
Refers to the factors used to calculate the value of lifetime payments to individuals or organizations.
Appreciated Property
Securities, real estate, or any other property that has risen in value since the benefactor acquired it. Generally, appreciated property held by the donor for a year or more may be donated at full fair market value with no capital gains cost.
Annuity
A contractual arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift annuity is a gift that secures fixed lifetime payments to the benefactor or another designated individual.
Adjusted Gross Income ("AGI")
The sum of an individual’s taxable income for the year is the total at the bottom of the first page of Form 1040. Individuals may deduct charitable cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities and appreciated property up to 30% of AGI.
Appraisal
An assessment of the value of a piece of property. Benefactors contributing real or tangible personal property (art, books, collectibles, etc.) must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.
Basis
The benefactor’s purchase price for an asset, possibly adjusted to reflect subsequent costs or depreciation. If Mrs. Smith bought stock for $100 per share and sold it for $175, her cost basis in the stock is $100 per share.
Beneficiary
The recipient of a bequest from a will or a distribution from a trust.
Bequest
A transfer of property or cash to an individual or organization under a will.
Capital Gains Tax
A federal tax on the appreciation in an asset between its purchase and sale prices.
Endowment Fund
The permanently held capital of a non-profit, income and/or principal from which is used to support ongoing projects.
Estate Tax
A federal tax on the value of the property held by an individual at his or her death (paid by individual's estate, not the heirs or recipients of bequests). In contrast, state inheritance tax is applied to the value of bequests passing to beneficiaries; it is also paid by the estate before distributions are made.
Executor
The person named in a will to administer the estate (known in some states as the "personal representative").
Fair Market Value
The price that an asset would bring on the open market.
Grantor
The individual transferring property into a trust.
Income Interest
In a trust, the right to receive payments from the trust for lifetime or a specified period of years.
K-1 (also 1099-R)
The IRS forms that are sent to life-income gift participants detailing how payments they received from their gifts during the year will be taxed.
Life Income Gift
A planned gift that makes payments to the benefactor and/or other beneficiaries for life or a term of years and distributes the remainder to charity.
Personal Property
Securities, artwork, business interests and items of tangible property as opposed to "real property," which refers to land and the structures built on it.
Remainder Interest
In a trust, the portion of the principal left after the income interest has been paid to the beneficiary(ies). A charitable remainder trust pays income to the benefactor or other individuals and then passes its remainder to charity.
Remainderman
A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.
Testator
The individual making the will.
Trust
A transfer of property by the grantor to the care of an individual or organization, for the benefit of the grantor or others.
Trustee
An individual or organization carrying out the wishes of the person who established the trust (the "grantor"), paying income to the beneficiaries and preserving the principal for ultimate distribution.
Useful Links
Thrivent Financial for Lutherans
www.thrivent.com
The ELCA Foundation
www.elca.org/Foundation
National Committee on Planned Giving
www.ncpg.org
The Partnership for Philanthropic Planning
www.pppnet.org
National Center for Family Philanthropy
www.ncfp.org
Council on Foundations
www.cof.org
BBB Wise Giving Alliance
www.give.org
Charity Navigator
www.charitynavigator.org
Charity Watch
www.charitywatch.org
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