Donations are mission-critical to funding our science and research.
HudsonAlpha is passionately exploring and growing the knowledge and possibilities of genomics to create meaningful solutions that improve the quality of human, plant and animal life around the world. Here is how you can be a part of the Institute’s mission:
A gift of cash is the most popular way of supporting HudsonAlpha. Gifts of cash are ordinarily tax deductible up to 50% of your adjusted gross income (AGI) in the year of your contribution (with a five-year carryover for the excess not utilized).
Next to cash, readily marketable appreciated securities are the assets most commonly donated to HudsonAlpha. When you donate appreciated securities, you generally do not incur any capital gains tax. You also may be eligible to receive a federal income-tax charitable deduction (up to 30% of your AGI with a five-year carryover) for the securities’ full fair market value if you have held them long term (i.e., for longer than 12 months). If the donated securities were held short term (i.e., 12 months or less), your deduction may not exceed your cost basis. Because a gift of appreciated securities generally avoids capital gains taxes, this type of gift may have a lower after-tax cost to you than an equivalent gift of cash. In addition to stock, you may donate bonds and mutual fund shares to HudsonAlpha. If you are considering making a gift of securities, please contact the Advancement Office for information on the proper procedures, including Depository Trust Company instructions.
Bequests (specific, residuary and contingent gifts made by will) are the most popular type of planned gift and can be crucial (along with remainders from charitable trusts) to the growth and success of HudsonAlpha. Whether you wish to provide general operating income for use wherever it is most needed (which provides the most flexibility) or to support a specific scientist, laboratory or program, your bequest expresses your lasting commitment to HudsonAlpha. A bequest may also help you meet your financial and estate-planning goals since an estate-tax charitable deduction for the entire amount of the gift is allowed. While your will (or codicil) should be prepared by your attorney in consultation with your advisors, HudsonAlpha’s Advancement Office would be happy to discuss any of the various giving opportunities with you.
Retain full control and use of your property during your lifetime and reduce your taxable estate by including HudsonAlpha in your will or living trust. Click here for appropriate language or ask your attorney to help you make amendments to your will or trust. Click here for appropriate language or ask our attorney to help you make amendments to your will or trust.
Charitable Remainder and Lead Trusts
Charitable remainder trusts allow you to make a gift to HudsonAlpha and at the same time retain a benefit from the assets you give. These separately managed trusts can be tailored to meet your financial goals with respect to the payout rate, type of income stream (variable or fixed) and payment schedule. To establish a remainder trust, you make an irrevocable contribution of cash, securities, or other property, which is placed in trust. The trust pays an income stream to one or more named beneficiaries (which can include you) for life and/or for a set term of years (not to exceed 20), and HudsonAlpha receives the right to principal as a remainder interest. The two most common types of charitable remainder trust are: (1) the annuity trust, which pays a fixed dollar amount each year based on a percentage (at least 5%) of the initial fair market value of the trust assets; and (2) the unitrust, which pays a variable income stream based on a percentage (again, at least 5%) of the fair market value of trust assets as revalued each year. A deferral feature is available for charitable remainder unitrusts. Because charitable remainder trusts (like an IRA or 401(k)) are tax-exempt, this deferral feature can make them a useful retirement planning tool if you are in a position to defer your receipt of an income stream. Charitable remainder trusts are typically funded with assets worth $100,000 or more. Establishing such a trust generally entitles you to claim an immediate income-tax charitable deduction. You should consult with your financial, tax and legal advisors for more information on charitable remainder trusts as they pertain to your particular situation and needs.
A charitable lead trust is the reverse of a charitable remainder trust; the gift to HudsonAlpha is the income stream from the trust, not the remainder. Charitable lead trusts enable you to provide an income stream to HudsonAlpha immediately for a set term of years or for a term measured by one or more lifetimes after which the trust assets pass to you or your estate or to your heirs. Leaving the asset to heirs can significantly reduce the gift or estate tax that would otherwise apply. If you think a charitable lead trust could be a useful way to structure a gift to HudsonAlpha, you should review the alternatives for structuring the trust with your financial, tax and legal advisors.
Factors to consider when setting up a charitable remainder trust:
- A CRT is a separate legal entity administered by a trustee.
- Setting up a CRT is relatively easy, but you should be advised by an attorney with expertise in the area of charitable trusts and estate planning.
- In any given year, unitrust payments increase when the value of the trust increases if the value of the trust increases. Likewise, payments decrease when the value of the trust decreases.
A charitable remainder trust is for you if:
- You want to make a major gift to HudsonAlpha while retaining or increasing your income from the assets you contribute.
- You hold appreciated securities and want to avoid the capital gains cost of a sale.
- You desire maximum flexibility in the operation of your gift, and:
- You want income paid to your beneficiary for a term of years instead of their lifetime.
- You want income to go to one or more beneficiaries
- You want the option of choosing the trustees of your gift plan.
- You would like your gift to benefit multiple charities.
Select a unitrust if:
- You want the income from your gift to be able to grow over time.
- You are interested in donating real estate, a second residence, or business.
- You would like the option to add to the trust over time.
Select an annuity trust if:
- You would like to receive a fixed income.
Retirement Plan Assets
Assets in qualified (tax-deferred) retirement plans may represent a large portion of your total assets and therefore may be an important factor in planning testamentary charitable gifts. Retirement assets generally considered suitable for charitable gifts include such plans as IRAs, Keoghs, SEPs, 401Ks, 403Bs, and ESOPs.
Left to family members or friends, these assets are subject to income tax and may also be subject to estate tax and generation skipping transfer tax. Because of this potential double layer of tax, retirement plan assets may be particularly attractive as an asset to leave to HudsonAlpha. In other words, if you designate HudsonAlpha as a beneficiary upon your death of all or a specified percentage of a retirement plan, the portion of the plan payable to HudsonAlpha will generally escape estate taxes, and HudsonAlpha, as a tax-exempt institution, will not be required to pay income tax on the distributions. As a general rule, if you intend to make both non-charitable and charitable gifts at death, it makes sense to consider using your tax-deferred retirement plan assets for charity and other assets for heirs. If you are thinking about donating retirement plan assets to HudsonAlpha, you should discuss the matter with your advisors beforehand.
Life Insurance Policies
Naming HudsonAlpha the beneficiary of an existing life insurance policy that is no longer needed to provide for dependents offers a simple way to support HudsonAlpha. Since you are the policy owner, the value of the policy will be included in your estate, but an offsetting estate-tax charitable deduction will generally be allowed. You may also be able to assign an existing whole life policy to HudsonAlpha, irrevocably making HudsonAlpha the owner and beneficiary, and claim an income-tax charitable deduction for the lesser of either your basis in the policy or its fair market value in that year. If the policy is not paid up and additional premium payments are due, you may donate cash or the equivalent to HudsonAlpha to pay the premiums each year and claim a full tax deduction for the gift. Lastly, you may be able to purchase a new policy naming HudsonAlpha as owner and beneficiary, pay the annual premiums (through HudsonAlpha), and claim the premium amount as a charitable contribution.If you are considering donating a life insurance policy to HudsonAlpha, it is important that you consult your advisors about the applicable state laws.
Tangible Personal Property
Tangible personal property, such as books, artwork, jewelry, antiques and the like, may be donated to HudsonAlpha during your lifetime or by bequest. HudsonAlpha must give special consideration to such gifts before it can accept them, and we advise you to contact the Advancement Office if you are contemplating donating tangible personal property to HudsonAlpha.
As with gifts of appreciated securities held long term (longer than 12 months), a donor of tangible personal property held long term and accepted by HudsonAlpha is potentially entitled to claim an immediate income-tax charitable deduction and avoid capital gains taxes. The extent of the allowable income-tax deduction for such a gift, however, would depend on whether HudsonAlpha uses the property in a manner related to its tax-exempt mission.
If the use of the contributed property is related to HudsonAlpha’s exempt purposes, the donor is generally entitled to claim an income-tax charitable deduction for the full fair market value of the property (up to 30% of AGI with a five-year carryover). If the use of the contributed property is unrelated to HudsonAlpha’s exempt purposes, or if the donor held the property for 12 months or less before making the donation, then the donor’s income-tax charitable deduction is limited to the cost basis in the property.
This document is designed to give you general information about various ways of giving to HudsonAlpha, including some of the potential financial benefits. It is not intended to provide specific advice about the legal or tax implications of charitable giving. Before making a gift to HudsonAlpha, you should consult with your financial, tax, and legal advisors for a thorough analysis of your individual situation and the tax consequences and to decide which of these ways of giving might work best for you.
The HudsonAlpha Foundation, a 501(c)(3) nonprofit organization, is the supporting entity for the HudsonAlpha Institute for Biotechnology. Tax-deductible contributions to the foundation are for the sole purpose of advancing the mission of the HudsonAlpha Institute for Biotechnology.
Tax identification #27-2320591