Planned Giving - Define Your Legacy and Make a Difference!

Planned Giving

With thoughtful planning, anyone can provide for their financial goals and help Jacksonville University continue to be an extraordinary place to learn. Planning may allow you to:
  • Benefit family and friends while providing for the university that is important to you
  • Leave a personal legacy that reflects your values and beliefs
  • Take advantage of possible tax benefits
  • Receive the satisfaction of giving back in a meaningful way
Legacy gifts take many forms, and reasons to include JU in one's financial and estate plan are as unique as each individual, but they share a single purpose: to ensure that Jacksonville University will prosper in the future.

We appreciate the continued commitment of alumni and friends to JU students and thank them for all they do to make our good work possible. We would be honored to assist you, too. JU's success depends on your vision and generosity.
How to Make a Difference at JU
You want to make a difference at JU, but don't know where to begin? Identify your goals and review possible strategies to achieve them.
Plan Your Gift At Any Age
Simple Planning Tips to protect your family and support JU too!


Contact Us
Maria Pellegrino-Yokitis, JD
Director of Major Gifts and Planned Giving
Jacksonville University
2800 University Blvd. N.
Jacksonville, FL 32211
(904) 256-7928
Tax ID: 59-0624412


Missin Video
Plan Your Will
Request a Wills Guide
Sign up for eNewsletter
Heritage Society
Text Resize
Subsribe to RSS Feed

Tuesday July 28, 2015

Case of the Week

Lucky Lucy Lindstrom's "Personal Loan" Charity


Lucky Lucy Lindstrom finished college and headed west. She started as a financial analyst with a large company in Seattle. After just four years, she became a Registered Investment Advisor and began advising clients. Lucky Lucy also managed her own investments. With her keen insight into financial markets, Lucy soon began to move from traditional stocks and bonds into futures and commodities markets. Lucky Lucy was so successful in these markets that she now manages only her mega-dollar personal portfolio.

Somewhat late in life, Lucky Lucy discovered the wonderful world of philanthropy. She volunteered at her favorite charity and learned that giving someone in need a helping hand is even more gratifying than making another million in the futures market.

Lucy had invested $1,000,000 in stock in a Canadian oil "wildcatter" with the name Northern Long Shot, Inc. This company has been drilling new exploratory wells in the far north. Recently, the stock rose from the $1 per share that she paid to over $5 per share. Lucy was delighted with her gain and decided to give the $5,000,000 to a supporting organization (SO) with a favorite charity.

For the first two years the SO distributed grants for charitable purposes. However, in year three, Lucy made a major mistake in her personal commodities investing. She wants to borrow $3,000,000 from the SO to "tide her over" through this difficult time. Since she needs all her assets to cover her leveraged obligations, Lucy would like to have a no-interest loan for two years. After all, she thinks, "I gave $5,000,000 to the SO, so it surely would be okay to borrow $3,000,000 at no interest for two years."


Would this plan work? Can the SO give a no-interest loan to Lucy?


There is a very major problem with the no-interest loan. First, the SO is a public charity that must be operated for the benefit of the public. Public charities are subject to the intermediate sanctions rules of Sec. 4958. A public charity may not engage in an excess benefit transaction. An excess benefit transaction occurs when a public charity engages in any direct or indirect transaction with a "disqualified person" and the disqualified person receives a benefit from the charity for which he or she did not pay. Excess benefits occur in many ways, including below-market loans from a public charity to a disqualified person and the payment of unreasonable compensation from a charity to a disqualified person.

A major potential issue for Lucy is the restriction on excess benefits under Sec. 4958. If an SO (Type I, Type II or Type III) makes a grant, loan, payment of compensation, or other similar payment to a substantial contributor or related person, there is an automatic Sec. 4958 excess benefit for the entire payment. Lucy is subject to an initial tax of 25% of the amount of the payment under Sec. 4958(a)(1). An organization manager who participated in the making of the payment, knowing that the payment was made to a substantial contributor, is subject to a tax of 10%. Sec. 4958(a)(2). Second tier taxes of Sec. 4958 may also apply to the entire payments, not just the excess value.

With this huge potential penalty, Lucy decided to forego the $3,000,000 loan from the SO and use other methods to cover her investment needs. Fortunately, the markets turned in her favor and she soon was back in excellent financial condition.

Published July 24, 2015
Subsribe to RSS Feed

Previous Articles

Lucky Lucy Lindstrom's "Cousins' Scholarship" Plan

Lead to Remainder Double Charitable Trust

Lucky Lucy Lindstrom's Long Shot Unitrust

Lucky Lucy Lindstrom's Unitrust

Stock Unitrust Payouts to Donors