TYPES OF GIFTS

What Are Annual Funds?

Annual funds are current-use financial resources used to support priority programs not covered through membership dues.

In recent years monies contributed to the Fund have been used to promote diversity in our profession, to sponsor scholarships, to provide leadership training, and to celebrate achievement in teaching and scholarship.  Specifically, gifts to the Fund have been used to support unemployed teachers, to provide scholarships to students of color who are preparing to enter our profession, to support a presentation at our annual convention by distinguished speakers and researchers living outside of the United States, to celebrate the lifetime achievements of outstanding members of our profession and to underwrite awards to affiliate organizations who have implemented innovative programs to support a more diverse membership.

What Are Endowed Funds?

Endowed funds are gifts large enough to generate yearly interest income. The principal remains intact through investment and only the interest is used. Endowed funds are attractive because they guarantee that financial resources will be available for years to come. Generally, endowed funds are named in recognition of the donor or donors.

The NCTE Fund accepts gifts in a variety of forms so that prospective donors may choose the types of gifts that they perceive to be the most efficient, personally satisfying, and financially advantageous for both themselves and the Fund. The types of gifts available can be categorized as current gifts and deferred gifts.

Current Gifts

Current gifts are contributions that can be put to use immediately upon their receipt from the donor.

Cash Gifts - A gift of cash is the most commonly used means of giving. Most cash gifts are made through NCTE's annual giving campaign.

Gifts of Securities - Gifts of common stocks, bonds, mutual funds, or other appreciated securities may be made. Depending on the circumstances, the securities will either be managed or liquidated to achieve the donor's goals. A popular benefit of such a gift beyond the charitable income tax deduction is that, in most cases, capital gains tax on the appreciation of the securities can be avoided.

Gifts of Property - Gifts of real estate and many other properties of value may be given as well. These gifts can often receive the same tax treatment as gifts of securities: no capital gains tax plus deductibility at fair market value.

Matching Gifts - Many companies match the gifts their employees make. If your employer has a matching gift program, your own gift to a specific area of support may be doubled or even tripled. If your company has a matching gift program, the Human Resources Department at your company will be able to provide you with additional details and a matching gift form.

Gifts intended for use by NCTE may be made to the NCTE Fund and designated by the donor for the National Council of Teachers of English,  a particular program already in existence, or a newly created fund designed for a particular purpose within NCTE.  

Deferred Gifts

Deferred gifts are contributions that cannot be used until some future date. Deferred gifts are the result of careful planning that integrates the donor's charitable gift into his or her overall financial, tax, and estate planning objectives in order to maximize the benefits for both the donor and NCTE. Each of the deferred gifts described below is closely regulated by law and requires special arrangements and tax treatment.

Bequests (in a Will or Living Trust) - The most common form of planned giving, a bequest is made through a will or living trust. Bequests may be stated as a percentage of the estate, as the residual of the estate, or for a specific dollar amount. Since a will can be changed, no income tax benefits are associated with a bequest. However, the owner's estate is reduced by the amount of the bequest for estate tax purposes.

Charitable Remainder Annuity Trust (CRAT) - A CRAT may be funded through a gift of stock, cash, or other assets. This type of gift provides for a predictable, fixed life-long income for the donor and his or her beneficiaries. No additional contributions may be made to a CRAT; however, additional annuity trusts may be established. The donor may claim a tax deduction for the estimated proportion of the assets that will ultimately go to NCTE.

Charitable Remainder Unitrust (CRUT) - A CRUT is very similar to the CRAT outlined above. The trust provides yearly, fluctuating income to the donor or his/her beneficiaries for a specified number of years, or for life. Additional contributions may be made to the trust, and upon the death of the last beneficiary, NCTE receives the principal and uses it in accordance with the donor's wishes. The estimated remainder is tax deductible.

Pooled Income Funds - A donor's gifts of cash, securities, or other assets to the Fund's Pooled Income Funds are combined with the contributions from other donors and invested jointly in a diversified portfolio. The donor receives the income from the fund proportionate to the value of his or her contribution and an income tax deduction based on the estimated principle that will be left to NCTE.

Charitable Gift Annuity - A Charitable Gift Annuity is a contract between the NCTE Fund and the donor whereby the NCTE Fund agrees to pay a fixed annuity to a maximum of two beneficiaries (immediately or deferred) in exchange for the irrevocable transfer of assets by the donor to the Fund. A portion of the annuity payment may be income tax-free, and an income tax deduction may be allowed for the difference between the value of the gift and the present value of the annuity.

Deferred Gift Annuity - As with the Charitable Gift Annuity, a donor makes a gift now and receives an immediate income tax deduction. However, in this instance the donor begins receiving the annuity payments at a future pre-determined date. Due to the compounding of the gift's income, the amount of the annuity payments can be significantly greater than the annuity payments under the Charitable Gift Annuity.

Retained Life Estates - A donor may transfer the ownership of a personal residence or a farm, while retaining the right to live there for the remainder of his, or her, life. The donor will be entitled to a charitable income tax deduction for a portion of the appraised fair market value of the property at the time of the transfer. In addition, the donor escapes capital gains tax on the property's appreciation and the estate will be entitled to a charitable tax deduction.

Retirement Accounts - A donor may name the NCTE Fund the beneficiary of the account with the value being fully deductible for estate tax purposes. 

Life Insurance - The NCTE Fund can be named the beneficiary of a life insurance policy to create a gift of much greater value than the actual money paid by the donor. A donor may contribute a "paid up" policy to the Fund and receive an income tax deduction equal to the policy's cash value. Or, a donor can name the Fund  as the beneficiary of the policy resulting in estate tax savings. Or, a donor can name the NCTE Fund owner and beneficiary of a new policy and receive an income tax deduction for the premiums paid.

Charitable Lead Trusts - With a Charitable Lead Trust, the NCTE Fund receives income from the donor's assets for a specified period of time, after which the asset is transferred back to the donor or to the donor's heirs. A lead trust can reduce gift and estate taxes or provide a charitable deduction for the donor.