Are there recurring administrative and management fees for life income gifts?
Yes. These fees can vary significantly depending on who serves as the fiduciary and manager of the arrangement; the fees can be especially significant for charitable remainder trusts managed by banks or other for-profit institutions. Under Davidson’s life income gift management arrangement with State Street Global Advisors, annual fees are about 0.65% per year, thanks to the economies of scale inherent in the size of Davidson’s overall life income gift portfolio.
My lawyer needs Davidson College's formal legal name for my gift documentation. What is it?
Davidson is incorporated, and the correct corporate name is "The Trustees of Davidson College." It is wise to add "a North Carolina not-for-profit corporation" to make it clear that your gift is to go to the College itself rather than to the individuals who make up Davidson's Board of Trustees.
Can I make a life income gift without paying a lawyer to draft a trust?
Yes. The simplest types of life income gifts are contributions to the Personal Income Fund and to charitable gift annuities; making a gift to one of these plans is no more complex than writing a personal check or sending shares of stock. Creating a charitable remainder trust will require the involvement of your own lawyer. Even if you don't need a lawyer's involvement, we strongly recommend that you always consult you own advisers before making a gift of this type as the gift is irrevocable. Can Davidson College serve as the executor of my estate? No. As a rule, state laws require that only individuals or certain types of institutions qualify as estate administrators. As Davidson is a nonprofit educational institution, it is impractical for Davidson to meet the many and varied state requirements for qualification. Can a planned gift qualify for matching by my employer? That depends on the terms of your employer's matching program. Most such programs will match outright gifts up to a certain annual level. Some will not match gifts to athletics. We know of no matching programs which will match gifts to create life income plans.
Are Davidson’s life income gift assets diversified for safety and stability?
Yes. All of our funds are diversified among a large number of different high-quality bonds and stocks in approximately the same proportion as in they are in Davidson’s own endowment. In addition to our online life income gift management information, we will be happy to provide details on our current asset mix and past performance, which are (of course) no guarantee of future returns for you or Davidson. Can I make a planned gift to which I can add later? Certainly. An outright gift to create a permanent fund at Davidson can be added to with other outright gifts, or with a life income gift or a will provision. A charitable remainder unitrust can be added to, though its sibling the annuity trust cannot. Technically, gifts to the Personal Income Fund and gift annuities cannot be added to, but since costs for making gifts to these plans are negligible, setting up a second plan is easy. What does Davidson do with donated property? That depends on what it is. When the gift is outright, in most cases it makes the most sense to sell the property and apply the proceeds to one of Davidson’s needs; this may be done immediately or later, depending on the market for the particular asset. Davidson employs professional advisers where appropriate in the decision-making process. Sometimes an asset can be used directly for a College purpose, in which case it is kept and put into service rather than being sold. The disposition of property in a charitable remainder trust is governed by the terms of the trust and certain Internal Revenue Service regulations, but in general such property is also sold as soon as feasible. Can I create a life income plan and continue to manage the investments myself? Yes, if you create a charitable remainder trust and serve as your own trustee. If Davidson or another entity serves as trustee, or if you fund a gift annuity or make a Personal Income Fund gift, you are prohibited by law from exercising investment control of the donated asset.
For further information, please contact James Gibert '79 or call 704-894-2469.
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