In some cases, depending on the designation of owner and beneficiary, the payments into the annuity can be tax deductible. A donor can designate Rawhide, Inc. as the recipient of only the income from a tax-free municipal bond fund. The donor retains ownership of the basic investment and can discontinue the regular gifts if his situation changes. The donor pays no federal taxes on the monthly income from the fund and takes a tax deduction for the total amount received by the charitable organization each year. This arrangement is excellent for those who want to contribute on a regular basis, without giving up ownership of the income-producing investment.
Modest gifts can have a big impact if made in the form of life insurance.
There are ways life insurance might be used to benefit a charitable organization. For example, the donor might wish to take a new policy or change an existing policy and designate Rawhide, Inc. as the beneficiary. Another way would be to make a regular tax-deductible gift that would be used to pay the premiums for a policy on a key employee at Rawhide. Rawhide, Inc. would be the beneficiary of the policy. Bret Starr was caring and sensitive.