Glossary of Planned Giving Terms

[Frequently Asked Questions]

Actuarial

As used in planned giving, refers to the factors used to calculate the value of lifetime payments to individuals or organizations.

Appreciated Property

Securities, artwork, real estate, or any other property that has risen in value since the benefactor acquired it. Generally, appreciated property held by the donor for a year or more may be donated at full fair market value with no capital gains cost.

Annuity

A contractual arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift annuity is a gift that secures fixed lifetime payments to the benefactor and/or another individual.

Adjusted Gross Income ("AGI")

The sum of an individual’s taxable income for the year — the total at the bottom of the first page of the 1040. Individuals may deduct charitable cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities and appreciated property up to 30% of AGI.

Appraisal

An assessment of the value of a piece of property. Benefactors contributing real or tangible personal property (art, books, collectibles, etc.) to us must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.

Basis

The benefactor’s purchase price for an asset, possibly adjusted to reflect subsequent costs or depreciation. If Mrs. Quinn bought stock for $100 per share and sold it for $175, her cost basis in the stock is $100 per share.

Beneficiary

The recipient of a bequest from a will or a distribution from a trust.

Bequest

A transfer of property to an individual or organization under a will.

Capital Gains Tax

A federal tax on the appreciation in an asset between its purchase and sale prices.

Cost Basis

See Basis, above.

Endowment Fund

The permanently held capital of a non-profit used to support ongoing projects and meet institutional opportunities.

Estate Tax

A federal tax on the value of the property held by an individual at his death (it’s paid by the estate, not the recipients of the bequests). In contrast, state inheritance tax is applied to the value of bequests passing to beneficiaries; it is also paid by the estate before the distributions are made.

Executor

The person named in a will to administer the estate (known in some states as the "personal representative").

Fair Market Value

The price that an asset would bring on the open market.

Grantor

The individual transferring property into a trust.

Income Interest

In a trust, the right to receive payments from the trust for lifetime or a term of years.

K-1 (also 1099-R)

The IRS forms that we send our life-income gift participants detailing how payments they received from their gifts during the year will be taxed.

Life Income Gift

A planned gift that makes payments to the benefactor and/or other beneficiaries for lifetime, then distributes the remainder to us.

Personal Property

Securities, artwork, business interests and items of tangible property — as opposed to "real property," used in planned giving to refer to land and the structures built on it.

Personal Representative

See Executor, above

Remainder

In a trust, the portion of the principal left after the income interest has been paid to the beneficiary(ies). A charitable remainder trust pays income to the benefactor or other individuals and then passes its remainder to us.

Remainderman

A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.

Testator

The individual making the will.

Trust

A transfer of property by the grantor to the care of an individual or organization, for the benefit of the grantor or others.

Trustee

An individual or organization carrying out the wishes of the person who established the trust, paying income to the beneficiaries and preserving the principal for ultimate distribution.