In this issue, we discuss different ways to give support to the Scottish Rite charities.

Some of our members have expressed interest in rolling over their IRA accounts or other qualified retirement plans tax- free to the Scottish Rite Foundation, Southern Jurisdiction, U.S.A., Inc. (the "SRF") or to a local Scottish Rite Foundation. Under current law, if the donor wanted to give his or her IRA to the SRF or the local foundation now, the IRS would tax the donor as if a taxable withdrawal of the money had been made, followed by a donation to charity. So the donor would be taxed on the withdrawal from the retirement plan; and he or she would get a charitable deduction for the gift to the SRF. Sometimes, the deduction is not enough to eliminate the tax, and sometimes, depending on the donor's age and the plan, the withdrawal could result in a penalty. The Charity Aid, Recovery and Empowerment Act of 2003 (the "CARE Act") would change this result, if passed by Congress. Under the CARE Act, the donor would be able to donate the IRA funds now, and not be taxed as if he or she were making a withdrawal. The donor would not, however, get any charitable deduction. For many donors, the charitable deduction is a secondary consideration-they just don't want to pay a large tax bill now. On February 5, a first step to passage occurred: the Senate Finance Committee approved the CARE Act. Now we are just waiting for action by the House of Representatives. We'll keep you apprised of developments on this legislation.

You can support the charities of the SRF through outright gifts or deferred gifts. Outright gifts, such as gifts of cash, securities or property, provide an immediate benefit and are a simple way to support the important programs of the SRF. Such gifts may be made for general operating support, for a current special use, or for capital purposes. When you make a cash donation by check, you can receive a federal income tax deduction of up to half your adjusted gross income tax that year. And if you work for a company with a matching gifts program, you may double your contribution at no extra cost to yourself.

A gift of appreciated securities is an attractive option for many donors because the donor's income tax deduction is based on the full fair market value of the asset with no capital gains tax obligation. If you have securities that you bought a long time ago, and they have increased significantly in value, you can gift them to the SRF and avoid a capital gains tax. Similarly, donations of real estate entitle you to a tax deduction for the fair market value of the asset, as determined by an appraisal. (Artwork and other items have special rules.)

Deferred gifts are another way to support the SRF. For example, through a bequest in your will, you can support the long-term financial stability of the SRF. Will bequests can be restricted or for specific purposes such as a scholarship fund. Since there are 47 Scottish Rite Foundations, please make sure you get the correct name, tax identification number, and address. If you decide to leave a bequest to the SRF or another charity, you should send the SRF or the charity notice of your intentions with contact information for the person you have selected to be your executor or personal representative.

Another deferred gift, the charitable remainder trust ("CRT"), allows you to make a gift now but to enjoy the income produced by the donated property until your death. Through an irrevocable CRT, you or your designees receive a certain amount of income annually for a specified period, often one's lifetime, and upon your and the designees' deaths, the charity receives the remaining trust assets. The CRT can provide for a fixed annual amount that is at least five percent of the trust's initial fair market value or for an annual income that is at least five percent of the value of the assets as determined each year. A charitable lead trust, a variation of a CRT, lets you place some of your income producing assets in a trust, assign the income to the SRF for a specific time period, and then have the assets returned to you or to a named beneficiary at the end of the specified time.

Life insurance is another deferred gift option. A donor can buy a life insurance policy on the donor's life or on someone else's life (with that person's consent) and make the SRF the owner and beneficiary of the policy. Upon the death of the insured person, the proceeds are paid to the charity. At death, the donor can take a charitable tax deduction for the full amount of the premiums paid. A donor also may irrevocably assign an existing insurance policy to the SRF, and deduct the cash value at the time of the assignment as a charitable gift. If the donor continues to pay the premiums, they are also deductible.

Finally, there are the Pooled Income Fund and the Charitable Gift Annuity, two additional deferred gifts. If you donate to the Pooled Income Fund ("PIF"), you get a deduction for the fair market value of the money or appreciated stock contributed, and each year you get your proportionate share of the income generated by the PIF. The income you get each year varies based on the performance of the PIF in the market. With a charitable gift annuity ("CGA"), on the other hand, you get a fixed annuity amount each year. A CGA is a contract between the SRF and the donor, whereby in exchange for a payment of cash or appreciated stock, the SRF agrees to pay the donor a fixed annuity for life. The rate is set at the time of the gift and does not vary each year. For older donors, the gift annuity is an attractive option because of the high annuity rates that can be achieved. The minimum amount for a CGA or PIF is $5,000.

If you would like any assistance in planning gifts to the SRF or your local foundation, or if you would like a free analysis of a contribution to a CRT, CGA or the PIF, please call Earl E. Ihle, Jr., the Director of Development, toll free, at 1-866-748-3227 (1-866- RITECARE) or Barbara G. Golden, the Director of Planned Giving, at her toll-free line, 1-866-448-3773 (1-866- GIVESRF). We also recommend you consult with your tax or legal advisor about the financial implications of your charitable giving. Please remember that all gifts will be recognized under our Donor Recognition Program (see the September 2002 issue of the Scottish Rite Journal).

No matter how you choose to give a gift, we appreciate each contribution, and each contribution helps to ensure the SRF's ability to support our RiteCare Childhood Language Program now and in the future.

To learn more about the Scottish Rite Pooled Income Fund, click here. For a chart illustrating Scottish Rite Foundation, S.J., USA, Charitable Gift Annuity Rates–Single Life, please click here. Note: The rates shown here are subject to change and not available in all states.

Scottish Rite Foundations, Southern Jurisdiction Pledge Form

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Scottish Rite Foundations, Southern Jurisdiction Pledge Agreement

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Barbara Golden is the Director of Planned Giving for the Development Office of the Supreme Council. Barbara is an attorney with experience in tax, corporate, and commercial real estate law. She managed a non-profit legal services organization for several years and has extensive experience in fundraising, grant writing, and program operations.

Ill. Thomas M. Boles, 33°, G.C. (left in photo) has worked extensively in fund-raising for children's programs throughout our Fraternity. For more information on planned giving, call Bro. Tom at 562–691–4227 (Fax 562–691–5327) or the Scottish Rite Foundation, Southern Jurisdiction, U.S.A., at 202–232–3579, ext. 143. Ill. Earl E. Ihle, Jr., 33°, is our development team's Director of Major Gifts. He has been a member of the Fraternity for 25 years and served in 1978 as Master of Lafayette Lodge, No. 111, Baltimore, Maryland. He is also a member of Boumi Shrine Temple in Baltimore, the York Rite, and a dual member of the Scottish Rite Valleys of Baltimore and Washington, D.C. You can reach Bro. Ihle toll free at 1–800–486–3331, ext. 143.