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.
Read More...
Plan Your Gift At Any Age
Simple Planning Tips to protect your family and support JU too!
Read More...

 

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
mpelleg@ju.edu
Tax ID: 59-0624412

 

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Wednesday September 28, 2016

Case of the Week

Lucky Lucy Lindstrom's "Northern Long Shot" Charity Diversifies

Case:

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 (RIA) 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. After this success, Northern Long Shot decided to "spin off" a smaller company with a portion of the successful wells. Lucy exchanged her $5 million in stock for 60% of the stock in Northern Long Shot, Inc. After the exchange, Lucy decided to give the Northern Long Shot stock to a private charitable foundation to help those in need.

Lucy discussed options with her attorney. She asked her attorney about the ability of her private foundation to receive the Northern Long Shot, Inc. stock. Her attorney noted that private foundations are subject to various rules on self-dealing, minimum distributions and excess business holdings, and also must not invest in a way to jeopardize the charitable interest.

Question:

Lucy said, "Wow! There are a lot of rules for private foundations. Why would my private foundation have to be careful with the type of investment? After all, I am an RIA who has been very successful with investments."

Solution:

Her attorney explained that the trustee of a private foundation generally has a lot of flexibility when investing a private foundation's assets. Investments are proper so long as they are permitted by the private foundation's organizational document(s) and state law and do not "jeopardize the carrying out of any of its exempt purposes." Sec. 4944. An investment jeopardizes a private foundation's exempt purposes if it is overly risky. This risk determination is made on an investment-by-investment basis. Possible jeopardizing investments, which are closely scrutinized, include trading securities on margin, trading in commodities futures, purchases of puts, calls, straddles and warrants, and selling short.

If a foundation makes a jeopardizing investment, the foundation is subject to an excise tax on the amount invested. In addition, a foundation manager who knowingly participates in a jeopardizing investment is subject to an excise tax on the amount of the investment. If the private foundation does not subsequently remove the investment from jeopardy, an additional excise tax on the amount invested is imposed on the foundation. Any foundation manager who knowingly participated in the investment is subject to an excise tax on the amount of the investment.

Fortunately, there is an exception for property transferred to Lucy's private foundation by gift. Since the Northern Long Shot stock was given to her private foundation, the jeopardizing investment rules do not apply. Reg. 53.4944-1(a)(2)(ii)(a).

Lucy thought about these rules. After giving the Northern Long Shot stock to her foundation, it sold the stock tax-free and her private foundation invested the proceeds in a diversified portfolio. Lucy now makes grants from her private foundation's income and growth. She realizes that the private foundation needs to follow prudent investor guidelines, and may not have the complete freedom she enjoys with her personal investment portfolio.

Published September 23, 2016
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Previous Articles

Lucky Lucy Lindstrom's "Northern Long Shot" Charity

Lucky Lucy Lindstrom's "Hurricane Grants" Charity

Lucky Lucy Lindstrom's "No Self-Dealing" Charity

Lucky Lucy Lindstrom's "Ultimate Control" Charity

Lucky Lucy Lindstrom's "Wheeler-Dealer Charity LLC"

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