Planned Giving

Gifts by will are one of Penn’s most important sources of individual support. Bequests provide scholarships, professorships and fund capital projects. A bequest can be made in the form of a specific gift of cash or property, or a percentage of the remainder of an estate. The latter allows more flexibility in planning.

Unrestricted Gift (a gift that can be used where need or opportunity is greatest)

I give to The Trustees of the University of Pennsylvania, a non-profit 501(c)(3) corporation, located in Philadelphia, Pennsylvania, organized and existing under the laws of the Commonwealth of Pennsylvania, the sum of $_______ [or ______% of the rest, residue and remainder of my estate] to be used for its general purpose.

A charitable bequest can also be designated for a specific purpose. It is best to have both the designation and the language approved by the University to avoid any potential difficulties in the execution of the will, and to ensure the University meets your gift intention.

The simplest life income gift arrangement, the Charitable Gift Annuity is a contract between Penn and the donor, providing for payments to one or two beneficiaries at a fixed rate. In exchange for a gift of $10,000 or more, Penn will provide an attractive annuity rate and guaranteed payments for life. The donor may contribute cash or appreciated assets, such as real estate or securities to establish a gift annuity. The donor is eligible for a charitable income tax deduction in the year that the gift is made. A Charitable Gift Annuity also allows for potential tax advantages, such as a reduction in estate and capital gains taxes.

Penn’s Deferred Charitable Gift Annuity is a contract between the University and a donor, providing for the payment of a fixed income to one or two annuitants. These payments are determined to begin at a future date chosen by the donor. A longer delay between the creation of the deferred gift annuity and the commencement of payments result in a higher annuity rate and a larger income tax charitable deduction. Some donors view this as an attractive supplement to their retirement plan. Additional flexibility may be created by the donor specifying a range of start dates, one of which may be “triggered” by the donor in the future.

The Penn Impact Annuity provides a way for your gift to have an immediate impact. Like a Charitable Gift Annuity, this unique giving vehicle provides guaranteed payments to you or a loved one. In exchange for a gift of $25,000 or more, Penn will provide guaranteed lifetime annuity payments at an attractive rate. The donor designates one of the University’s priorities to receive the first three years of payments. Thereafter, you enjoy the advantage of the annuity payments. The Penn Impact Annuity also allows for a greater immediate charitable income tax deduction, given that the first three years of gift payments are included in the current charitable deduction. On termination of the annuity, the balance again supports Penn.

A Charitable Remainder Trust allows a donor to transfer assets into a separately managed trust that will provide beneficiaries named by the donor with payments for life or for a period of years. The donor decides the payout rate of the trust in consultation with the trustees he or she selects. The minimum payout is 5%. The trustees have the responsibility to manage the assets of the trust, provide tax statements to the IRS and the beneficiaries, and issue beneficiary payments on a periodic basis. Penn currently serves as trustee of many charitable trusts and provides these services to donors and beneficiaries of those trusts.

The two types of Charitable Remainder Trusts:

Charitable Remainder Unitrust
This trust pays the donor or other named beneficiaries a fixed percentage of the principal in the trust as it is valued annually. Unitrust payments are taxed to the donor based upon the type of income earned by the trust. Additional gifts can be made to a unitrust at any time.

Charitable Remainder Annuity Trust
This trust makes annual payments fixed at a specific percentage of the value of the trust when it is established. Additions to an annuity trust are not permitted.

The Charitable Lead Trust can be an attractive gift vehicle when a donor’s goal is to make a generous gift to the University and achieve certain income or estate tax planning objectives. An advantage of the Charitable Lead Trust is that the gift to Penn is made “up front” so the donor can see their philanthropy in action. A Charitable Lead Trust holds income-producing assets for a term of years, or for the lifetime of an individual, during which time annual payments are designated to Penn—either a fixed annuity payment, or a “unitrust” payment that varies annually based on the trust’s performance. At the end of the term, the trust assets are paid back to the donor, or to the donor’s children or grandchildren.

The Penn Donor Advised Fund (Penn DAF) is an efficient and satisfying way to support the University and other charities and can be an attractive alternative to a private foundation, being both more cost-effective and tax-advantageous. The Penn DAF provides a convenient way to make a gift now, and lock in a charitable tax deduction when the gift is made, while deferring the decision of where to designate support until a later date.

A donor can establish a Penn DAF account with a gift of $50,000. Various assets can be used to fund your Penn DAF account. Cash and publicly-traded securities can easily be transferred into the account. Other assets, such as real estate or other financial instruments, may also (upon review and approval) be used to fund an account. At least 50% of the gift must be designated over time to University programs, with the remaining balance available to other charitable organizations. The donor has the option to make additional contributions of $10,000 or more whenever they wish. In return for their gift, the donor is eligible for a tax deduction for the full value in the year the gift is made, subject to IRS guidelines.

Once the Penn DAF is established, the donor may recommend charitable grants to Penn and to other charities. At least 5% of the DAF must be distributed annually. Unlimited grant recommendations can be made each quarter with a minimum distribution amount of $500 per grant. Upon termination of the DAF, the donor has the option to appoint family members to continue the fund for one additional generation.

The Protecting Americans from Tax Hikes Act of 2015, has extended the IRA Charitable Rollover permanently. The extension allows individuals age 70½ and older to donate up to $100,000 from their IRAs to The University of Pennsylvania tax-free. Donors do not receive an income tax charitable deduction. This provision allows donors to transfer money from their IRAs directly to Penn, without having to recognize the transfer as taxable income. Donors should consult their tax advisors about their specific situations.