With gift planning, you can achieve your financial and personal goals while helping support the young men of Texas Alpha. A planned gift costs you nothing today, can reduce taxes for you and your heirs, and ensures the Fund is here for generations of brothers. Below are the most common ways to plan a gift. Each one explains how it works, who it fits, and what to do next.
Give Through a Will or Bequest
You can make a bequest by including language in your will or living trust that leaves a portion of your estate to a nonprofit like the Texas Alpha Endowment Fund.
What is a bequest?
A bequest is a gift from your estate. It is a transfer of cash, securities, or other property made through your estate plans, and it can be made to a charity like the Texas Alpha Endowment Fund.
How does a bequest work?
A bequest can be made for a specific amount, for a percentage of your estate, or for all or a portion of what is left after you have made bequests to your family. To make a gift from your estate, you must sign a new will or living trust instrument, add a codicil to your present will, or make an amendment to your present trust instrument.
- You retain control and use of your assets during your lifetime.
- You may modify your bequest if your circumstances change.
- Gifts from your estate may be exempt from federal estate taxes.
- A bequest costs nothing now, yet gives you the satisfaction of knowing you have provided for the Fund's future.
What are the common types of bequests?
- Specific
- A gift of a specific amount or a specific item or asset from the estate to the Texas Alpha Endowment Fund.
- Residual
- A gift to the Texas Alpha Endowment Fund made from the residue of the estate after all other wishes are fulfilled, or a percentage of the estate.
- Contingent
- A gift to the Texas Alpha Endowment Fund only in the event that the designated beneficiaries (usually children or family members) are unable to accept the estate gift.
- Perpetual
- A series of gifts to the Texas Alpha Endowment Fund over a period of time.
Information for your attorney
Legal Name: Texas Alpha Endowment Fund, Inc.
Tax ID (EIN): 74-2560499
Address: P.O. Box 28061, Austin, TX 78755
Status: a 501(c)(3) nonprofit corporation organized in Texas
Please see your legal and/or tax advisor for more information and to determine if a charitable bequest to or for the Texas Alpha Endowment Fund is right for you.
Donating Retirement Assets
A retirement plan can be a tax-efficient and simple way to include a nonprofit like the Texas Alpha Endowment Fund in your estate plan.
Most people do not use all of their retirement assets during their lifetime, and those unused assets can be used to make a gift to the Texas Alpha Endowment Fund. Because nonprofits do not pay income taxes on the donations they receive, distributions to nonprofits avoid being taxed as income. Heirs who inherit the same retirement assets would usually owe income tax on them, so retirement accounts are often the most tax-efficient asset to leave to charity.
How do I give through a retirement plan?
- Ask your plan administrator to provide you with the appropriate beneficiary designation forms. Many providers offer them online.
- Name the Texas Alpha Endowment Fund as a full, partial, or contingent beneficiary on your plan's beneficiary designation form. Use our legal name and EIN, 74-2560499.
- Return the form to your plan administrator and keep a copy with your estate documents.
- Tell us about your gift so we can thank you and record your intentions.
This works for 401(k), 403(b), IRA, and most other qualified retirement plans. You can change the designation at any time.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift of retirement assets to the Texas Alpha Endowment Fund is right for you.
Donate an IRA and Save on Taxes
The IRA charitable rollover, often referred to as a qualified charitable distribution (QCD), allows you to make a tax-free gift from your individual retirement account (IRA) to a qualified charitable organization such as the Texas Alpha Endowment Fund without having to pay income taxes on the money. You can make annual gifts to the Fund from your IRA this year and into the future.
How it works
- You are age 70½ or older at the time of the gift.
- You transfer your gift directly from your IRA to the Texas Alpha Endowment Fund.
- You transfer the funds outright to one or more qualified charities. Except for a limited one-time election, the law does not permit direct transfers to charitable trusts, donor-advised funds, charitable gift annuities, or supporting organizations.
- You can give any amount each year up to the annual QCD limit set by the IRS. The limit is indexed for inflation each year and is above $100,000.
Why consider this gift?
- Your gift will be put to use today, allowing you to see the difference it makes for the Texas Alpha Endowment Fund.
- You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your tax deductions.
- If you are required to take minimum distributions, you can make a gift to us up to the allowable amount and also satisfy all or part of your RMD obligation.
- Since the gift does not count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.
Five steps to complete your gift
- Choose the IRA from which you wish to make the gift.
- Decide the amount of your gift.
- Contact us at info@texasalphaendowment.org for a sample letter you can use to request a direct charitable distribution from your IRA.
- Submit the required form to your IRA administrator. Our advisor Donna Chimera at Morgan Stanley, (512) 370-0451, can help your custodian complete the transfer.
- Share the good news of your gift with us so we can watch for the transfer and send your acknowledgment.
Frequently asked questions
I have already named the Texas Alpha Endowment Fund as the beneficiary of my IRA. What are the benefits if I make a gift now instead of after my lifetime?
By making a gift this year, you can see your philanthropic dollars at work. You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have already made by transferring that amount from your IRA, as long as it is within the annual limit.
I am turning age 70½ in a few months. Can I make this gift now?
No. The law requires you to reach age 70½ by the date you make the gift.
Can my gift be used as my required minimum distribution under the law?
Yes. If you are required to take minimum distributions, you can make a gift to us up to the allowable amount and also satisfy all or part of your RMD obligation.
Do I need to give my entire IRA to be eligible for the tax benefits?
No. You can give any amount per year under this provision as long as it is under the maximum amount allowed by law. Contact us for the most up-to-date information on giving from your IRA.
I have several retirement accounts. Some are pensions and some are IRAs. Does it matter which retirement account I use?
Yes. Direct gifts to a qualified charity can only be made from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k), or 403(b) plan into an IRA and then make the transfer from the IRA directly to the Texas Alpha Endowment Fund. To determine if a rollover to an IRA is available for your plan, speak with your plan administrator.
When do I need to make my gift?
We must receive your gift by December 31 for your donation to qualify this year. If you have check-writing features on your IRA, please be aware that your check must clear your account by December 31 to count toward your required minimum distribution for the calendar year.
How do I make my gift?
Contact us for a sample letter you can use to request a direct charitable distribution from your IRA, or contact your IRA administrator directly.
My spouse and I would like to give more than the annual limit. How can we do that?
If you have a spouse (as defined by the IRS) who is 70½ or older, they can also give up to the annual limit from their own IRA. Each spouse has a separate limit.
Can I use the transfer to fund life-income gifts like charitable remainder trusts or charitable gift annuities?
Generally no. A qualified charitable distribution must go outright to the charity. Current law does allow a one-time election to fund a charitable gift annuity or charitable remainder trust from an IRA, subject to a separate lifetime limit and special rules. You can also designate some or all of your retirement plan assets to fund a charitable gift annuity or charitable remainder trust after your lifetime. A charitable trust or gift annuity provides lifetime income to your family or other loved ones, and when the arrangement ends, the balance supports the Texas Alpha Endowment Fund. Ask your advisor which option fits your situation.
For those 59½ years old or older
If you are at least 59½ years old, you can take a distribution and then make a gift from your IRA without penalty. If you itemize your deductions, you can take a charitable deduction for the amount of your gift.
At any age
No matter your age, you can designate the Texas Alpha Endowment Fund as the beneficiary of all or a percentage of your IRA, and it will pass to us tax-free after your lifetime. It is simple. Contact your IRA administrator for a change-of-beneficiary form or download a form from your provider's website.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift from your IRA to the Texas Alpha Endowment Fund is right for you.
Donate With a Bank Account
Donors can use bank accounts to help continue the great work that the Texas Alpha Endowment Fund is doing. Donating with a bank account is safe and easy. Individuals who donate using a bank account can receive the same tax benefits as other gifting options.
How do I give through a bank account?
There are several ways to donate with a bank account to the Texas Alpha Endowment Fund. Here are three common options:
- Give directly from your account. You can make a one-time or monthly donation directly from your bank account through our online giving form using electronic check (ACH). Direct transfer from a bank account is a preferred payment method because lower transaction fees allow more of the donation to go to the Fund.
- Name the Fund as a "payable on death" beneficiary. You can add the Texas Alpha Endowment Fund as the payable on death (POD) beneficiary of a checking, savings, money market, or certificate of deposit account as part of your legacy. Ask your bank for its beneficiary form.
- Close an unused account and give the balance. You can close a bank account that you no longer use at any point during your lifetime and donate the funds to the Texas Alpha Endowment Fund.
What is the difference between "payable on death" and a beneficiary named in a will?
Payable on death (POD) is typically used to avoid probate on a bank account, such as checking, savings, money market, or CD. The account passes directly to the named beneficiary when you die. If a beneficiary is instead named in a will, the transfer typically goes through probate.
Transfer on death (TOD) is similar to a POD designation. It lets you pass stocks, brokerage accounts, or bonds to a beneficiary without them having to pass through probate.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift from a bank account to the Texas Alpha Endowment Fund is right for you.
Donate Savings Bonds
You can leave U.S. savings bonds and other government bonds to the Texas Alpha Endowment Fund as part of your legacy.
There are two types of bonds that you can leave to the Texas Alpha Endowment Fund:
- Treasury bonds
- Government savings bonds, such as Series EE and Series I bonds
How do I donate a savings bond?
Savings bonds generally cannot be re-registered to a charity during your lifetime. The two most common approaches are to redeem the bonds and donate the cash proceeds, or to leave the bonds to the Texas Alpha Endowment Fund in your will or trust. Leaving bonds to a tax-exempt charity through your estate may reduce the income tax that would otherwise be due on the bonds' accrued interest.
As the rules governing different types of bonds vary, please consult your financial planning or accounting expert before you decide.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift of bonds to the Texas Alpha Endowment Fund is right for you.
Donating Mutual Funds
If you have a mutual fund and are looking to donate the proceeds to a nonprofit like the Texas Alpha Endowment Fund, you may qualify to receive a charitable deduction.
What is a mutual fund?
A mutual fund is an investment vehicle that pools money from multiple investors. The money is invested in securities and managed by a professional advisor.
How do I give a charitable gift through a mutual fund?
- Give shares now. Appreciated mutual fund shares held for more than one year can be transferred directly to our Morgan Stanley account, just like stock. You may deduct the full fair market value and avoid capital gains tax. See the transfer instructions under Donate Appreciated Stock.
- Make us part of your legacy. Name the Texas Alpha Endowment Fund as the transfer on death or "payable on death" beneficiary of a mutual fund account.
- Close the account. Close your mutual fund account and donate the funds to the Texas Alpha Endowment Fund.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift of mutual fund shares to the Texas Alpha Endowment Fund is right for you.
Giving Through a Charitable Gift Annuity
A gift for life
Make a gift to support the Texas Alpha Endowment Fund through a charitable gift annuity, and you can earn income for life. With a charitable gift annuity, you agree to make a gift to the Fund and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life. The balance is used to support our work.
This type of donation can provide you with regular payments for life and allow the Texas Alpha Endowment Fund to further its mission. You can also qualify for a variety of tax benefits, including a federal income tax charitable deduction if you itemize.
How does a charitable gift annuity (CGA) work?
A charitable gift annuity provides a way for you, as a donor, to make an irrevocable gift to support the mission of the Texas Alpha Endowment Fund while at the same time providing a source of fixed income for life to you, or to another recipient of your choosing.
- When you sign an annuity agreement with the Texas Alpha Endowment Fund, you make a lump sum donation and take a partial tax deduction.
- Once the lump sum is invested, you or a person of your choosing receive payments on a fixed schedule for life, per the terms of the agreement.
- After the recipient's lifetime, the Fund receives the balance of the invested funds.
Is a charitable gift annuity right for me?
A charitable gift annuity might be right for you if you:
- want to receive fixed payments for life that will not fluctuate.
- have assets that would be advantageous to give away during your lifetime, such as cash or funds earning low interest rates, or appreciated securities.
- want to reduce your current income taxes with an income tax charitable deduction.
An example of how it works
Frank, 75, and Charlotte, 73, want to make a contribution to the Texas Alpha Endowment Fund, but they also want to ensure that they have dependable income during their retirement years. They fund a $25,000 charitable gift annuity with appreciated stock that they originally purchased for $10,000.
Based on their ages, they receive a payment rate of 5.1%, which means they receive $1,275 each year for the remainder of their lives. They are also eligible for a federal income tax charitable deduction of $10,217* when they itemize. Finally, they know that after their lifetimes, the remaining amount will be used to support Texas Alpha.
Please always confer with your legal and/or tax advisor for more information and to determine if a charitable gift annuity for the Texas Alpha Endowment Fund is right for you.
Giving Through a Charitable Remainder Trust
Solutions for large donations
If you have built a sizable estate and are also looking for ways to receive reliable payments, consider a charitable remainder trust. This type of trust provides you or other named individuals income each year for life, or for a period not exceeding 20 years, from assets you give to the trust you create. At the end of the trust term, the balance in the trust goes to the Texas Alpha Endowment Fund.
How does a charitable remainder trust work?
Charitable remainder trusts allow you to irrevocably transfer assets to a trust. You and/or your beneficiaries receive payments from the trust for life, or for another time period of your choice. The remainder of the trust then goes to a nonprofit like the Texas Alpha Endowment Fund. You receive a partial income tax deduction in the year you fund the trust, and appreciated assets placed in the trust can be sold without immediate capital gains tax.
What types of charitable remainder trusts (CRT) are there?
- Charitable remainder annuity trust (CRAT)
- Pays a fixed dollar amount to income beneficiaries for life or a term of years, regardless of market conditions. The CRAT cannot accept additional gifts after it has been established.
- Charitable remainder unitrust (CRUT)
- Pays the income beneficiaries a fixed percentage rate for life or a term of years. The annual income amount is based on the current value of the trust's assets, so the payout will increase or decrease based on changes in the trust's value. A CRUT can accept additional gifts.
An example of how a charitable remainder trust works
Frank, 75, wants to make a gift to the Texas Alpha Endowment Fund but would also like more income in the future. Frank creates a charitable remainder unitrust with annual lifetime payments to him equal to 5% of the fair market value of the trust assets as revalued annually. He funds the trust with assets valued at $500,000.
Frank receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. He is eligible for a federal income tax charitable deduction of $301,905* in the year he creates and funds the trust. This deduction saves Frank $96,610 in his 32% tax bracket.
Please always confer with your legal and/or tax advisor for more information and to determine if a charitable remainder trust for the Texas Alpha Endowment Fund is right for you.
Charitable Gift of a Life Insurance Policy
You can donate a paid-up policy, or even a policy on which you are still paying premiums, to a nonprofit like the Texas Alpha Endowment Fund.
Can a life insurance beneficiary be a charity?
Yes. You can name a nonprofit such as the Texas Alpha Endowment Fund as a beneficiary of your life insurance policy. You can also name more than one beneficiary and divide the amount among multiple individuals or nonprofits.
Can I donate my life insurance policy to charity?
If you have a life insurance policy that you no longer need because of a change in your life circumstances, you can give a paid-up policy to the Texas Alpha Endowment Fund, or even a policy on which you are still paying premiums.
How do I donate a life insurance policy?
There are two simple ways to set up a gift of life insurance:
- Transfer ownership. You can irrevocably designate the Texas Alpha Endowment Fund as the owner and beneficiary of your life insurance policy. By doing so, you may be entitled to a charitable income tax deduction, and any premiums you continue to pay may also be deductible.
- Name the Fund as beneficiary. You can name the Texas Alpha Endowment Fund as the irrevocable beneficiary but retain ownership of the policy itself. Call or write to your insurance company to request a form to make this change of beneficiary.
Please see your legal and/or tax advisor for more information and to determine if a charitable gift of life insurance to the Texas Alpha Endowment Fund is right for you.
Gifts From Private and Family Foundations
If you direct grants from a private foundation, a family foundation, or a corporate foundation, the Texas Alpha Endowment Fund, Inc. is an eligible 501(c)(3) public charity.
Your foundation's administrator will need our legal name, tax identification number, and mailing address. Grants may be sent by check to our mailing address or by wire transfer. Contact our Treasurer for wire instructions or for any documentation your foundation requires, such as our IRS determination letter.
