The “Legacy Gift” Program Fact Sheet

Terms:

Contractual

Selected Features:

Does not deplete cash reserves

Provides a 100% protection against the long-term capital gains tax due

Provides a 100% tax deduction equal to the value of the stock contributed

Enables a one-time gift to support a charity in perpetuity

Controls the amount given to a charity and thus requires the charity to be frugal in spending

Increases gift-giving potential through First Bridge Foundation’s connections

Description

The Legacy Gift program is fairly straightforward. Virtually everything is identical to the Standard Restricted Stock Donation Program, with one exception. With the “Legacy Gift” program, First Bridge Foundation and the donor enter into an agreement to set up a financially engineered program in which only the income from a blended bond portfolio is used by the chosen charity for its purposes. This assures that the donor’s gift will provide support to the charity on an ongoing basis. This also creates a disciplined way for the selected charity to avoid overaggressive spending, maintain its performance based growth formulas, and ensure that the donor’s gift goes fully for its intended purpose.

The drawbacks to this program are (a) the donor gives up the rights to their stock in return for the tax write-off, (b) the transactions can be somewhat complex, and (c)   not all stocks are eligible.

Comparison

The comparison below compares what happens when a Restricted Stock owner (a) does nothing and holds onto his or her stock, (b) makes a standard Restricted Stock donation, or finally, (c) makes a “Legacy Gift” Restricted Stock donation to First Bridge Foundation (PC).

Legacy Do Nothing Standard RS FBF RS
Ability to make a donation with “Illiquid” securities NA Yes Yes
Preserves cash for other purposes Yes Yes Yes
Alleviates long-term capital games tax No Yes Yes
Supports a charity “in perpetuity” No No Yes
Maximizes impact of one-time gift No No Yes
Ability to Leverage Donation No No Yes