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Major Gifts
Major Gifts
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Carnegie Hall's gift planning program provides a wonderful opportunity for you to help secure the artistic and financial strength of the Hall for future generations of music lovers. By including Carnegie Hall in your estate plan, you may obtain significant income and estate tax advantages. You might increase your annual income as well. We will be pleased to work with you and your advisors to assist you in developing a plan that meets your philanthropic and financial objectives.
The Isaac Stern Society, formerly The Ovation Society, bears the name of the artist who is intrinsically linked to Carnegie Hall among music lovers everywhere. Isaac Stern led the efforts to save Carnegie Hall from demolition in 1960 and served as its president for more than 40 years. Reflecting Mr. Sterns visionary spirit, the Isaac Stern Society acknowledges the generous friends who recognize the importance of Carnegie Hall to future generations by including it in their long-range financial plans.
Members of the Isaac Stern Society are invited to an annual reception and to other special programs during the year. In addition, with their permission, members are listed in Carnegie Hall's annual report and in selected issues of Playbill.
Following are ways that you can provide for Carnegie Hall in your estate planning:
A bequest is a gift made in a will or living trust. Following are the different types of bequests:
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Specific bequest: a stated amount of cash, a percentage of your estate, or a specific asset, such as shares of stock.
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Residuary bequest: a gift of all or part of the property remaining in your estate after debts, taxes, administration expenses, and specific bequests to other beneficiaries have been made.
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Contingent bequest: a gift that take effect only if other beneficiaries you name do not survive you.
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Bequest through a charitable remainder trust: income is to be paid to one or two named beneficiaries, with the trust assets ultimately passing to Carnegie Hall.
To assist you and your attorney, following is suggested bequest language:
Unrestricted bequest:
An unrestricted bequest that can be used for the general purposes of Carnegie Hall is the most helpful because it allows use of the gift wherever the need is greatest.
I give and bequeath the sum of $________(or ___ % of the rest, residue and remainder of my estate) to the Carnegie Hall Society, Inc., New York, NY, for its general corporate purposes.
Restricted bequest:
A restricted bequest is one that is designated for a specific program or activity at Carnegie Hall.
I give and bequeath the sum of $_______(or ___ % of the rest, residue and remainder of my estate) to the Carnegie Hall Society, Inc., New York, NY, to be used for the following purpose: (identify program: for example, the Weill Music Institute). If the Board of Trustees of the Carnegie Hall Society, Inc., in its sole and absolute discretion, determines that circumstances are such that a literal compliance with the terms of this bequest is no longer practicable or appropriate, then the Carnegie Hall Society, Inc., may use this bequest for another purpose that as closely as possible carries out my original intention.
Your bequest may be to the Carnegie Hall Endowment Fund, for permanent investment. Following is suggested language for an unrestricted endowment bequest:
I give and bequeath the sum of $______(or __% of the rest, residue and remainder of my estate) to the Carnegie Hall Society, Inc., New York, NY, to be added to the Carnegie Hall Endowment Fund, with the income earned on this bequest to used for its general corporate purposes.
You may wish to consider a bequest of all or a portion of your retirement accounts, such as an IRA, a 401(k) or other tax-deferred account. These accounts are subject to income tax when funds are withdrawn and, if left to heirs other than your spouse, may subject to estate taxes as well. The combined taxes could exceed 70%.
If you are considering a bequest to Carnegie Hall, you may wish to use assets in your retirement accounts, and bequeath other assets to your heirs. When the assets in your retirement accounts are distributed to Carnegie Hall, no income or estate taxes would be payable.
You may wish to make a significant gift to Carnegie Hall, but you need the income produced by the assets to provide for your own or another person's financial needs. You can achieve both objectives through a life income gift. With a life income gift, you could increase your income, receive an income tax charitable deduction for a portion of your gift, eliminate capital gains taxes if you make your gift with appreciated securities, and also reduce estate taxes.
You can make a life income gift through a contribution to the Carnegie Hall Pooled Income Fund or by creating a Charitable Remainder Trust.
A. The Carnegie Hall Pooled Income Fund
The Carnegie Hall Pooled Income Fund is a form of charitable trust which accepts gifts from many donors and operates similar to a mutual fund. Contributions are pooled together and invested to generate income. Each participant in the Fund receives quarterly payments for life (and for the life of a second beneficiary, if you wish) after which the gift is removed from the Fund and is added to Carnegie Hall's endowment.
The minimum initial contribution is $10,000. Additional contributions of $5,000 or more may be made at any time.
Benefits of a gift to the Pooled Income Fund include:
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A charitable income tax deduction in the year that the gift is made. The amount of the deduction depends upon the number and ages of the income beneficiaries, the rate of return of the Fund, and the market value of the assets contributed to the Fund.
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Elimination of capital gains tax if you use appreciated securities.
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Reduction in estate tax.
B. Charitable Remainder Trust
A charitable remainder trust is established by irrevocably transferring assets to a trustee you select, subject to a written trust agreement. The trustee invests the assets and pays the income to you or another beneficiary you select, for life or for a term of twenty years or less. At the end of the trust term, the assets will pass to Carnegie Hall. The market value of the assets are deductible for federal estate tax purposes.
There are two types of charitable remainder trust:
1. Charitable Remainder Unitrust
a. The beneficiary is paid a fixed percentage, but not less than 5%, of the fair market value of the trust, revalued annually.
b. If the value of the trust increases, the income paid to the beneficiary increases. Conversely, if the value of the trust decreases, the amount paid to the beneficiary each year also decreases. The unitrust provides a hedge against inflation.
c. Additions can be made to a unitrust.
2. Charitable Remainder Annuity Trust
a. The beneficiary is paid a fixed dollar amount each year which is based on a percentage, but not less than 5%, of the fair market value of the trust at inception.
b. Additions cannot be made to an annuity trust.
c. The charitable income tax deduction is higher for an annuity trust than for a unitrust.
The charitable lead trust is the opposite of the charitable remainder trust. Income is paid to Carnegie Hall during the term of the trust, after which the assets are transferred back to you or to your heirs.
A. Non-Grantor Lead Trust
The most beneficial arrangement is where the trust instrument provides for income to be paid to Carnegie Hall for a period of years, after which the assets are distributed to those you designate, usually your children or grandchildren. While you may be liable for a gift tax when the trust is created, all appreciation on the assets passes to your heirs without incurring additional tax. During the trust term, income generated by the trust is not included in your taxable income.
B. Grantor Lead Trust
In this arrangement, the income is paid to Carnegie Hall for the life of the trust, and then the assets are distributed to you and/or your spouse. When you create the trust, you will receive an income tax charitable deduction based upon the present value of the stream of income that Carnegie Hall will receive during the trust term. Income generated by the trust is included in your taxable income.
In either case, the trust can be either a unitrust or an annuity trust, as with the remainder trusts.
A. Outright Gift
You may own real estate, residential, commercial or undeveloped land, which has appreciated in value. By making an outright gift of the property to Carnegie Hall, you may obtain the same tax benefits as with a gift of appreciated securities.
B. Gift of Personal Residence With Retained Life Estate
You can also make a gift of your personal residence, while retaining the right for you and your spouse to continue to use the home for your lifetimes. This special arrangement, called a retained life estate, involves transfer of ownership of your residence to Carnegie Hall, while you continue to live there.
You are responsible for maintenance, taxes and insurance, but you can obtain an income tax charitable deduction for the value of Carnegie Hall's future interest in the residence (based upon your age and the fair market value of the property).
Please note that all potential gifts of real estate must be discussed in advance with Carnegie Hall's Office of Gift Planning so that we may determine whether the Hall is able to accept the gift.
Life insurance gifts are another method of making a significant gift to Carnegie Hall.
If you own a life insurance policy that is no longer needed for the protection of your family, you may make a gift of the policy to Carnegie Hall. You will be entitled to a charitable income tax deduction for approximately the fair market value of the property. If you continue to pay the premiums on the policy, you receive an income tax deduction for the premium payments, as well.
You can retain ownership of the policy, but name Carnegie Hall as a beneficiary of the life insurance policy. You do not receive an income tax deduction, since you retain ownership, but your estate will receive an estate tax charitable deduction for the proceeds eventually paid to Carnegie Hall.
Life insurance is also a valuable planning device to replace part of all of the value of other assets given to Carnegie Hall, either outright or by funding a charitable remainder trust.
There are special rules for gifts of tangible personal property, such as musical instruments, antiques or works of art. If the property is related to Carnegie Hall's tax-exempt purposes, then you may receive the same tax benefits as with a gift of appreciated securities. However, there are situations where your tax deduction is limited to your cost basis in the property.
An item of tangible personal property can be contributed to a charitable remainder trust. When the trustee sells the property, there is no capital gains tax on the appreciation, and the property is removed from the donor's estate. In recent years, trusts have been funded with rare violins, generating significant income to the donor.
If you are considering a gift of tangible personal property, please contact Carnegie Hall's Office of Gift Planning.
Before making any decisions on a planned gift, we strongly recommend that you consult with your attorney or financial advisor. We will be pleased to meet with you and your advisors to discuss the various opportunities available at Carnegie Hall.
Carl K. Steffes
Director, Planned Gifts and Special Projects
Carnegie Hall
881 Seventh Avenue
New York, New York 10019
Telephone: 212-903-9809
Fax: 212-581-6539
Email: csteffes@carnegiehall.org
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