Getting Started

Most of us think of life insurance as protection, especially for our loved ones. But it is also a powerful tool you can use to champion our work far into the future. Here's what you need to know.

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Life insurance is an asset you may not think of donating to the El Dorado Community Foundation until you hear how powerful, practical and simple it can be.

How It Works

When you own a life insurance policy with accumulated cash value, you're essentially sitting on a pile of money. When the original purpose for the protection no longer applies—such as to educate children now grown or to provide financial security for a spouse now deceased—your life insurance can be redirected to help support a worthwhile cause. One option is simply to name the El Dorado Community Foundation as the primary beneficiary. (Naming us as beneficiary while you retain ownership of the policy, however, does not qualify you for an income tax deduction.) Or, you can name us as the beneficiary and also assign us ownership of the policy as a current charitable gift. Doing so provides you tax benefits as outlined below.

How You Benefit

When you assign us ownership of a life insurance policy and also name us as the beneficiary, the following good things happen:

• You receive an income tax charitable deduction, available under most circumstances.
• You realize tax savings from use of the deduction, and these savings can be invested for future income.
• You reduce your future estate tax liability.*

Did you know?

If you are concerned that supporting our work will reduce your family's inheritance, a new life insurance policy equal to your charitable gift can replace the value of your loved ones' inheritance.

Donating a New Policy

Perhaps you don't own an existing policy but still realize how beneficial giving life insurance can be. If so, you can—in most states—purchase a new insurance policy and name a qualified charity like ours as the beneficiary and owner of the policy. Rather than paying premiums to the insurance company, you make tax-deductible cash gifts to cover the annual premiums. Even greater leverage is possible when two donors, usually spouses, purchase a two-life second-to-die policy. With two lifetimes before the payment of death benefits, a future gift to us will cost you even less.

*Currently, federal estate taxes are repealed for all deaths that occur in the calendar year 2010. In 2011, estate taxes are scheduled to be reinstated for estates worth more than $5 million at rates up to 35 percent.