Ways to give to our Endowment Fund
TEFFLA’s Endowment Fund is designed to ensure the long-term financial stability of our mission. The fund preserves principal contributions and uses the future investment income to meet the needs of our educators and students for generations to come. As a 501(c)(3) nonprofit, all contributions to the endowment are tax-deductible to the extent allowed by law. Donors can choose from several giving options — each with unique benefits and potential tax advantages.
Cash Gifts
A cash gift is the most straightforward way to support the endowment. Historically most of our donations have been in the way of cash giving. Donors can contribute by check, credit card, or online payment at teffla.org.
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Immediate charitable tax deduction for the donor.
Simple and direct — funds are available right away for investment in the endowment.
Easy for donors to make annual or recurring gifts.
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Sarah, a long-time supporter, donates $5,000 in cash each year to the endowment. Her contributions are invested, helping grow the principal while generating annual income to fund future grants.
Gifts of Appreciated Securities
Donating stocks, bonds, or mutual funds that have increased in value can be one of the most tax-efficient ways to give. These assets are held outside of an IRA or qualified account, where the individual is responsible for long-term capital gains. In addition, supporters of TEFFLA who work for large publicly traded companies and may have a disproportionate position of the employer stock as it is likely part of their compensation package (3M, Medtronic, General Mills, Target).
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Donor avoids capital gains tax on the appreciation.
Deduction for the full fair market value if the asset was held more than one year.
Simple transfer process through a brokerage firm.
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Case Study 1
Michael purchased stock years ago for $10,000 that is now worth $40,000. By donating the stock directly to the endowment, he avoids paying tax on the $30,000 gain and receives a $40,000 charitable deduction. If Michael likes the stock, he can donate the appreciated stock and purchase it back with cash, eliminating his tax liability while maintaining the stock.
Case Study 2
Jill has worked for Target Corp for 21 years, 10% of her compensation package is paid to her in Target stock. Over the 21 years, Jill has accumulated a significant position in Target stock. By donating shares of that stock, Jill can both avoid the capital gain on the stock and keep her portfolio more balanced.
Planned Gifts (Legacy or Estate Giving)
Planned giving allows donors to include TEFFLA in their estate plans. These plans are flexible and easy to establish. The gift can occur at the death of the first spouse, the surviving spouse, or both.
Benefits
✺ Often results in larger gifts than those made during a lifetime.
✺ May reduce tax liability of the estate.
✺ Allows donors to create a permanent legacy aligned with their values.
✺ Studies show after a donor incorporates a charity into their estate plan, annual giving increases.
Below are the most common ways supporters can incorporate TEFFLA into their estate.
Bequests (giving via will or trust at death)
The donor simply updates their will or trust document to read “I devise and bequeath $______ or ______% of my gross estate as determined for federal tax purposes to The Education Foundation of Forest Lake Area, EIN 27-0535097, for its endowment.”
The downside to this method is it requires the donor to contact their attorney, have the estate documents altered, then sign the amended will/trust. A cost will likely be incurred by the donor.
When the donor passes away, the executor of the estate will make the indicated donation to TEFFLA.
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Linda and Robert, both retired teachers, included a 10% bequest of their estate in their will to the endowment fund. When Linda and Robert pass, 10% of their estate will be donated to TEFFLA’s endowment to support future Rangers.
Beneficiary Designation
Beneficiary changes are easy, and no cost is incurred to the donor. Simply contact the financial institution holding the account and ask to update beneficiaries.
Common account types with beneficiary designations are IRA’s, 401K, 403B, taxable investment accounts, CD’s, and annuities. Donors could also designate TEFFLA as a “Payable on Death” designee on checking, saving, or money market accounts.
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Susan, a retired former school board member, is passionate about FL Area Schools and wants to leave a legacy. She is unable to make large cash contributions but instead contacts her financial advisor and updates the primary beneficiary designations on her IRA to 20% to TEFFLA and 80% to her 2 children.
Life Insurance
TEFFLA donors can leverage life insurance in a couple different ways to leave a lasting gift.
✺ First, they can update their beneficiary designations on existing life policies, as outlined above, to leave some or all of the policy’s death benefit to the organization. This gift will be deductible from their estate when he/she passes.
✺ Second, TEFFLA supporters can purchase life insurance contracts, owned by TEFFLA, and fund the premiums monthly or annually. The premiums would be gifts to TEFFLA, and therefore tax deductible. When the donor passes, the death benefit would be paid to TEFFLA.
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Jim, a retiree who has a passion for TEFFLA, is living on pension income and social security, with supplemental income coming from his IRA. Jim purchases a $30,000 life insurance policy, owned by TEFFLA, that costs $240 a month. Jim makes automatic monthly donations to TEFFLA of $240. Those premiums are deductible to Jim and TEFFLA makes the appropriate premium payments. 15 years later Jim passes away, the death benefit has grown to $44,000 and will make a significant impact on TEFFLA’s endowment fund.
Donor-Advised Funds
A Donor-Advised Fund (DAF) is a charitable investment account that allows individuals to make a charitable contribution, receive an immediate tax deduction, and then recommend grants to charities over time. Many large brokerage firms have Donor Advised Funds as part of their offering. A percentage of TEFFLA supporters already have these accounts opened and funded.
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Immediate tax deduction when contributing to the DAF.
Flexibility to recommend gifts when desired.
Easy for donors already using platforms like Fidelity Charitable or Schwab Charitable.
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The Patel Family holds a Donor-Advised Fund and recommends an annual $10,000 grant to the organization’s endowment, creating a reliable annual revenue stream.
Qualified Charitable Distributions (QCDs) from IRAs
For donors receiving Required Minimum Distributions (RMD’s), gifts can be made directly from an Individual Retirement Account (IRA) to the nonprofit.
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Satisfies the Required Minimum Distribution (RMD).
Amount donated is excluded from taxable income, perhaps helping reduce tax on social security income and Medicare part B premiums.
Up to $108,000 per year can be donated tax-free.
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Carol, age 73, donates $15,000 directly from her IRA to the endowment. The gift supports TEFFLA, and she avoids additional taxable income.
Real Estate Gifts
Donors can contribute real property — such as homes, land, or commercial buildings.
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Donor avoids capital gains tax on appreciated property.
Receives a deduction for the property’s fair market value (if held more than one year).
Property can be sold and reinvested into the endowment.
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The Johnson Family owned a small rental property that no longer fit their needs. They donated it to the organization’s endowment. After selling the property for $250,000, the proceeds were invested to generate sustainable income.
Matching Gifts and Pooled Giving
Donors or board members can inspire others by offering matching challenges or participating in group giving initiatives.
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Encourages collective generosity.
Increases the visibility and urgency of giving campaigns.
Builds community ownership of the endowment’s success.
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A board member pledged to match every dollar donated to the endowment up to $50,000. The campaign motivated new donors, resulting in $100,000 total raised, doubling the fund’s impact.