With so many ways to give, it’s not always easy to decide how best to achieve your philanthropic goals.
While cash is the most common way to give to charity, other assets, such as stock and life insurance, offer additional financial benefits while at the same time maximizing your philanthropic impact.
Specifically, gifting life insurance provides an easy way for you to make a significant legacy gift to the nonprofit community, with tax benefits that you can enjoy during your lifetime.
Case Study: Life Insurance
We recently worked with a North County donor who was updating his estate plans. He wanted to set up a donor-advised fund benefiting several of San Diego’s arts organizations using a life insurance policy.
As is the case with many retirees with grown children, the donor and his spouse no longer needed a life insurance policy as a financial safety net. After consulting his wealth advisor and our team of charitable experts, he realized he could leverage his giving by donating that policy to The San Diego Foundation.
The donor made The San Diego Foundation the owner and beneficiary of the life insurance policy and, each year, will make a gift equal to the annual premium payment to The Foundation. The Foundation, in turn, pays the premium directly to the insurance company. The donor is then able to receive a charitable tax deduction equivalent to the annual premium payment.
Once the policy matures, the funds will go to the arts organizations designated in his donor-advised fund. He now has the satisfaction of knowing that his gift will benefit the arts in San Diego for decades to come.
Here are the most common methods for gifting life insurance:
- Name The San Diego Foundation as the primary beneficiary
- Name The San Diego Foundation as your successor beneficiary
- Donate an existing paid-up policy to The San Diego Foundation
- Purchase a new policy and name The San Diego Foundation the owner
What’s Right for You
We understand that as time passes, your charitable goals and personal needs evolve, which is why many donors consider life insurance an effective giving strategy to maximize their impact in the long-term.
Whether you want to explore the benefits of gifting life insurance or learn more about donating other assets, our team of charitable experts has decades worth of experience working with donors and wealth advisors to identify the best strategies that meet your needs.
About Julia Grant
As Director of Development, Julia works to increase the impact of charitable giving at The San Diego Foundation. Through donor-advised funds, planned giving, and other philanthropic vehicles she helps donors achieve their charitable goals. She is responsible for cultivating relationships with philanthropists new to The San Diego Foundation and strengthening donor and fund advisor relationships with a goal of establishing new funds and building enduring assets.