Giving Wisely

Thank you for your interest in supporting Fairfield University.

Your generosity will help us further our mission of academic excellence now and far into the future. We encourage you to plan your gift thoughtfully. Now is the time, and this website is the place, to consider how your gift can benefit you as well as Fairfield.

Your gift can take multiple forms and can help you address a variety of personal financial goals. Do you want to make a significant gift during your lifetime, or would a gift as part of your estate work better? Do you have a particular asset that you are thinking of donating? Do you want to increase your retirement income, or is your primary goal estate preservation? Are you carrying excess life insurance or a large balance in your retirement plan?

We are ready to work with you and your advisors to craft the gift plan that satisfies you best. You may contact us now or use the following guide to help you weigh your options first.

Give now, or give later?
What assets to give?
How can a gift pay me back?
What are my choices in income gifts?
My goal is to keep my estate intact, not increase my income ...

Give now, or give later?

A significant lifetime gift will allow Fairfield to meet its immediate objectives. In turn, it will give you maximum tax benefits, which is especially attractive if you are in high earnings years. It can also be the simplest gift to arrange.

You may, however, prefer to leave your assets and cash flow alone until your death, and instead make your gift through your estate. Even though we would not use this gift immediately, it will be critically important for long-term financial strength and will help ensure that we can meet the opportunities and challenges the future will present us.

You use a will or revocable trust to make a gift from your estate. You may also use life insurance or the balance remaining in your retirement plan. These gifts help you keep your lifetime financial planning flexible, although they provide only limited income tax benefits. You will need professional assistance to set up most estate-plan gifts.

What assets to give?

• Cash. It is the easiest transaction to make. You are limited only by your cash flow and your inclination to draw from your cash reserves.
• Appreciated securities. Get the same tax deduction as with cash, but use stocks or bonds that cost you less than they are currently worth. Your deduction is based on market value, but you incur no capital gains liability on the transfer to us. It's one of the best tax incentives left. We can work with you to make this a simple gift.
• Real estate. Gifts of land, vacation homes, or income-producing properties can bring great benefits to us. We do have to review each gift proposal carefully, however, because sometimes it's not practical for us to accept. You can give real estate outright, transfer it in a part sale/part gift arrangement, use it to fund a life-income gift, or give your residence while reserving the right to continue living there.
• A retirement account. The balance remaining in your retirement account after your death is subject to double taxation if it passes to your heirs: it's taxed both as income and as an estate asset. It's a better plan to designate the remainder of your account to Fairfield, and then use other assets for family gifts. New regulations simplify the procedure to name a charity as beneficiary; we're ready to assist you.
• Appreciated assets. You may have books, artwork, or other property that you no longer wish to keep. These assets could bring real benefit to us. There are particular IRS requirements to meet before you can deduct a gift of appreciated assets. We will review each gift proposal carefully to make sure that we can put the asset to good use.
• Business interests. A partnership, a business, shares of closely held stock, or a limited partnership share may all hold value for us. We'll work with you and your advisors to make the transfer simple.

How can a gift pay me back?

There is a family of gifts that transfers assets to Fairfield and then returns income to you. You can use them to convert low-yielding securities to a higher income stream at a greatly reduced capital gains cost. You can receive fixed or variable income, take payments for your lifetime or for a term of years, and direct the income to other beneficiaries. In essence, you make a contribution yet retain benefits from what you gave away.

Your charitable deduction is based on the full market value of the assets you gave, minus the current value of the income interest. The higher the income payout, the lower the deduction.

These flexible, creative gifts address a variety of your planning objectives. For our part, the return of income permits a more substantial gift to Fairfield than you might be able to afford in an outright format. Even though we cannot use these gifts until the death of the last income beneficiary, they provide us with long-term financial strength that will sustain us in the future.

What are my choices in income gifts?

• A charitable gift annuity is the simplest. In return for your gift, we contract to pay a fixed income for life to you and/or another beneficiary. The income rates and the charitable deduction tend to be higher with a gift annuity than with other life-income gifts. There is also an attractive reduction in the taxation of annuity payments. This gift plan is most appropriate if you are risk-averse in your investing and if long-term fixed income is an appropriate strategy for you.
• A deferred gift annuity delays the start of income payments to the beneficiaries. In return for this delay, the deferred annuity increases both the income rate and the charitable deduction above those of an annuity starting income payments immediately. If you are currently in high-earnings years and are looking for tax deductions and new sources of retirement income, a deferred annuity with income set to start when you turn 65 may fit your needs very well.
• Gift annuities are contracts between Fairfield and you, with payments made as an obligation of the University. One other gift returning fixed income, the charitable remainder annuity trust, is an individually managed trust instead of a contract. The annuity trust offers you more flexibility, although its management costs often produce a lower effective income rate than a gift annuity and require a larger initial gift.
• The annuity trust does have several advantages. It can pay income to multiple beneficiaries, while the gift annuity is limited to two individuals. It can pay income for a term of years (up to 20) while a gift annuity can only pay for life. Under certain circumstances an annuity trust can pay all tax-free income, especially if it was funded with tax-free securities.
• The most flexible life-income gift also pays you variable income. The charitable remainder unitrust pays beneficiaries a fixed percentage of the value of the principal, which is revalued annually. Income in excess of the unitrust amount is reinvested, so that the unitrust's income rate can be applied against an increasing principal over time. The unitrust can pay multiple beneficiaries, and can pay income for lifetime or a term of years. Like the annuity trust, the unitrust is individually managed, and requires a larger gift to make the management feasible.
• A special feature of the unitrust is its ability to grow its principal over time, then reinvest for income, with no capital gains cost. This feature allows you to build up a fund for later needs, such as tuition for children and grandchildren.

My goal is to keep my estate intact, not increase my income...

Consider a charitable lead trust. It works in reverse from the life-income gifts. Your gift is placed in a trust that pays income to Fairfield for a specific term, usually ten or more years, then returns the principal to you or your heirs.

The lead trust is a very effective tool to remove a portion of your estate from tax liability:

• If the assets are to pass to your heirs, any growth in the principal after the trust is put in force is exempt from estate tax.
• Further, the amount subject to tax is reduced by the value of Fairfield's income interest.

If you have a growing family business or a rapidly appreciating portfolio, and children whom you'd like to benefit, a lead trust may be just what you're looking for.

For further information about your planned giving options, please contact:

Victor D'Ascenzo
Development Office
Fairfield University
1073 North Benson Road
Fairfield, CT 06824
(203) 254-4000 ext. 2024