Glossary of Planned Giving Terms

Actuarial
As used in planned giving, refers to the factors used to calculate the value of lifetime payments to individuals
or organizations.


Appreciated Property

Securities, artwork, real estate, or any other property that has risen in value since the donor acquired it. Generally,
appreciated property may be donated to us at full fair market value with no capital gains cost.


Annuity

A contractual arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift
annuity is a gift to us that secures a fixed lifetime income to the donor and/or another individual.


Adjusted Gross Income ( “AGI ”)

The sum of an individual’s taxable income for the year the total at the bottom of the first page of the 1040. Individuals may deduct charitable cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities and appreciated property up to 30% of AGI.

 

Appraisal

An assessment of the value of a piece of property. Donors contributing real or tangible personal property (art, books, collectibles, etc.) to us must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.

 

Basis
The donor’s purchase price for an asset. Mrs. Quinn bought stock for $100 per share and sold it for $175. Her
cost basis in the stock is $100 per share.

 

Beneficiary

The recipient of a bequest from a will or a distribution from a trust.

 

Bequest

A transfer of property to an individual or organization under a will.

 

Ca pital Gains Tax

A federal tax on the appreciation in an asset between its purchase and sale prices.

 

Cost Basis

See Basis.

 

Endowment Fund

The permanently held capital of a non-profit used to support ongoing projects and meet institutional opportunities.

 

Estate Tax

A federal tax on the value of the property held by an individual at his or her death (it’s paid by the estate,
not the recipients of the bequests). In contrast, state inheritance tax is applied to the value of bequests passing
to beneficiaries; it is also paid by the estate before the distributions are made.

 

Executor

The person named in a will to administer the estate.

 

Fair Market Value

The price that an object of property would bring on the open market.

 

Grantor

The individual transferring property into a trust.

 

Income Interest

In a trust, the right to receive income payments for lifetime or a term of years.

 

K-1 (also W-2)

The IRS forms that we send our life income gift participants noting the income paid them by their planned
gifts during the tax year.

 

Life Income Gift

A planned gift that pays income to the donor and/or other beneficiaries for lifetime, then distributes the remainder to us.

 

Personal Property

Securities, artwork, business interests and other items of property as opposed to real property, used in planned giving to refer to land and the structures built on it.

 

Remainder

In a trust, the portion of the principal left after the income interest has been paid to the beneficiary(ies).
A charitable remainder trust pays income to the donor or other individuals and then passes its remainder to us.
August 2009 – Office of Institutional Advancement, Gift Planning.

 

Remainderman

A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.

 

Testator

The individual making the will.

 

Trust

A transfer of property by the grantor to the care of an individual or organization, for the benefit of the grantor or others.

 

Trustee

An individual or organization carrying out the wishes of the person who established the trust, paying income to the beneficiaries and preserving the principal for ultimate distribuition.

 

 

For more information to help you plan wisely so that you can leave a legacy that benefits both you and the university, please contact:

Shirley Druggan, M.Ed.
Director of Gift Planning
The University of Texas Health Science Center at Houston
Office of Institutional Advancement
7000 Fannin Street, Suite 1200
Houston, Texas 77030
713-724-7134 preferred
713-500-3382 office
Shirley.Druggan@uth.tmc.edu