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The Challenge | The Solution | Why We Give | Planned Giving | Income Producing Gift Plans
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Income Producing Gift Plans

Several gift plans enable you to make a gift to the USM Foundation for Southern Miss Athletics while providing income for yourself or others. You also may increase your spendable income through tax benefits and diversification of assets. These plans, each offering distinct advantages, allow you to tailor your giving to meet your personal needs and achieve your financial goals.

All the plans offer current income tax deductions, and all provide the opportunity to avoid or reduce capital gain tax if appreciated property is used to make the gift. Each plan can be shaped to help you reduce or eliminate gift and estate taxes. With these plans, the remainder of your gift is available to Southern Miss only after the income period you select is completed. You designate how the University will ultimately use this remainder.

Although most of these gift plans are created during a benefactor's lifetime, all can be established through your will. Such testamentary gift plans serve to reduce estate taxes and may accomplish other personal and financial goals.

Careful planning with the University and your advisers is important in evaluating the effectiveness of these plans for your situation. We would be pleased to provide you details of the personal benefits and financial implications of either a lifetime or testamentary gift using any of the income-producing plans.

Unitrust
When you want a variable income:

The unitrust often is chosen because it is market sensitive. Your income from the trust varies annually; it is based on a yearly determination of the value of the assets you placed in the trust. Thus, the arrangement is responsive to market fluctuations, and your income can provide a hedge against inflation. If you have assets that are difficult to value, there may be other gift plans better suited to your situation.

Many benefactors choose the unitrust for gifts of real estate. If you use real estate to fund the trust, your payments will begin when the property is sold and the trust reinvests the proceeds of the sale in income-producing assets. Because you receive income only after the property is sold, you may elect to receive additional income later to make up for the payments that were not made to you before the property was sold.

You can make additional gifts to the trust at any time; these usually result in a higher annual income and additional deductions. The trust can be for one or more lifetimes, or can be for a specified term of up to twenty years. If certainty in the annual amount of income is your priority, then the next trust arrangement, the annuity trust, may be a better option.

Gift Annuity
Simplicity in execution, and income payments begin immediately, or in the future:

The charitable gift annuity is among the easiest and most popular methods of making a planned charitable gift. Here is how it works: you make a gift of cash or readily marketable securities to The USM Foundation for Southern Miss Athletics. The minimum gift is $10,000 for each annuity you establish. The University formally promises to pay you a fixed percentage of the value of your gift for the lives of up to two individuals. You may, but do not have to be, one of the annuitants.

The income is paid quarterly and begins immediately. You also receive an immediate income tax deduction, based on the remainder value of your gift. An additional advantage is that part of the annual income you receive will be tax-free return of principal. It is important to remember that the annuity rate and the value of the gift, and therefore the amount of your deduction, increase with the age of the annuitant(s). This makes the immediate charitable gift annuity even more attractive for older benefactors.

A variation of the gift annuity is the deferred payment gift annuity. It is designed to appeal to younger benefactors who desire the benefits of a current income tax deduction and want to supplement their future retirement income. You may make your gift for a deferred annuity in a single transfer, in a series of transfers, or in periodic transfers during especially high-income years. The income will be paid to you quarterly, commencing on a future date you specify, on or after your sixtieth birthday. The benefits of the deferred annuity are the same as for the immediate charitable gift annuity; however, deferring the income usually results in a greater deduction and even larger annuity payments.

Southern Miss will use your gift after the expiration of the lifetime income interest. As with all gifts, you may designate how the Athletic Department will ultimately use this remainder. You may make your gift unrestricted, or select that it be used for a particular purpose or specific sport of special interest to you. We will assist you in making a designation that reflects your interests.

Annuity Trust
When you want a set amount of income:

This trust provides an income that does not fluctuate with the market. You receive a fixed percentage of the initial value of the assets placed in the trust. This arrangement is ideal for benefactors who do not want their annual charitable trust income stream tied to market performance.

As with the unitrust, this trust can be for one or more lifetimes, or it can be for a specified term, up to twenty years. Of course, the initial annuity amount should be set at a prudent level so that the trust principal will remain sufficient to meet the income requirements. Your advisers will be able to provide you with guidance on a percentage appropriate to your needs and based on a reasonable market forecast.

Charitable Remainder Trusts
The charitable remainder trust is a legal agreement that specifies how the assets placed under the trust will be managed. The charitable remainder trust is an attractive method to achieve a variety of goals. The two types of charitable remainder trusts, the unitrust and the annuity trust, are often used by Southern Miss benefactors to attain their personal financial objectives while making a significant gift to the University. The type of remainder trust best suited to you depends on your individual needs.

Pooled Income Fund
Pool your gift with others:

The pooled income fund is somewhat similar to a mutual fund investment, because your gift to the University is "pooled" with others in the fund. You have access to professional management of your money without cost to you, and are able to diversify your investments. The investment philosophy is to obtain a competitive yield with moderate growth and relative stability of the annual income return.

You may choose to receive the lifetime income from your share of the fund, or you may select up to two other individuals as beneficiaries. The income is paid quarterly. After the death of the last life income beneficiary, the remainder of your gift becomes available to the USM Foundation for Southern Miss Athletics. Your current income tax deduction is for the remainder value of the gift.

Your investment can begin at $5,000, and you may add contributions in increments of $1,000 or more as often as desired. We trust that these gifts will be in addition to your current annual donations to the Eagle Club.

If receiving tax-free income is a priority, then you should consider one of the other trust vehicles or the charitable gift annuity because the pooled fund may not receive or invest in tax-exempt securities.