Upon the death of the last life-income beneficiary, the funds donated become the property of the American Red Cross, to be used for the charitable purposes for which the organization was founded. Many donors specify a favorite chapter as the ultimate charitable beneficiary. Each contribution, together with similar gifts from others who support the Red Cross, is placed in the fund and invested as part of the Red Cross Endowment Fund. No fee is charged by the Red Cross for management of the fund. Gifts to the fund are invested to earn income, which is divided proportionally among all contributors on the basis of the number of shares held.
Any individual beneficiaries receive monthly income payments for as long as they live.
Upon the death of the last individual beneficiary, the shares assigned are withdrawn from the fund and paid to the chapter or the national sector, according to the wishes of the donor, as specified in the gift agreement. Each donor may retain for beneficiaries the income from his or her gift. The income received may even increase if the income earned by the fund is greater than that which was received from the assets before the gift was made. This is often the case when the donation is in the form of securities. Gifts of appreciated securities are tax deductible on the base of the full fair market value at the time the gift is made.